Read “The State of Fraud 2023” report
Ecommerce sales of apparel and electronics led all ecommerce verticals in April, according to Signifyd pulse data, a practical trend this year as we continue to straddle inflated prices and economic uncertainty. No matter what’s going on in the economy, we need clothes, and who can live without a cell phone?
For the second consecutive month, apparel, accessories and footwear led all verticals with a healthy increase of 14% in April year over year, with luggage and footwear each up 33% and fashion rising 17%, according to Signifyd data.
Luggage sales were also big in March, so maybe this trend marks a return to summer travel. In electronics, sales were up 7% from a year ago, but the increase wasn’t driven by typical electronics, such as cell phones or laptops. For the second consecutive month, sales of musical instruments –which is in the electronics vertical – rose significantly, up 56% in April year over year, according to Signifyd.
In fact, sales in the consumer electronics subcategory, which includes smartphones and tablets, were down 7% in April from a year ago, perhaps due to consumers holding back while waiting for prices to flatten or for the iPhone 15 launch. Or maybe consumers just decided to buy some new luggage and take that old phone on a vacation instead.
Such are the 2023 retail trends as we approach the mid-year point.
- Ecommerce sales overall rose 2% in April from last year, matching buying patterns from March, which saw the same increase, Signifyd data shows. Overall, product volume is down 1% from last year, average order value is up 2%, and the number of transactions, which were flat in March, rose 9%, Signifyd data shows.
- The product volume in electronics rose 37% in April, year over year, coupled with an average order value up 11%, a trend throughout this economic period of uncertainty that indicates consumers paying less to purchase more items. This is helped in part when consumers purchase more low-ticket items and switching to generic from brand names.
- Sales of apparel, accessories and footwear will account for 20.54% of ecommerce sales in the U.S. this year, according to statista.com, which reports that sales in this vertical in the U.S. is set to reach over $207 billion in 2023.
- Consumer electronics has one of the lowest online shopping cart abandonment rates across verticals, at 50%, with fashion up around 88%, according to statista.com. Websites for cruise and ferry travel lead with a 98% abandonment rate. People can dream!
- More on electronics: Looking ahead in 2023, consumer electronic sales will get a boost from the sales of 48.6 million domestic tasks robots, according to an International Federation of Robotic report cited by Shopify. These sales are not just automated vacuum cleaners, but machines that replace domestic workers: A cleaning robot costs around $25,000; an average annual cost of a domestic employee is $27,000.
Discretionary retail spending is declining, while fraud remains prevalent
The trend of lower discretionary spending was evident in the sales of three other major verticals tracked by Signifyd. April sales were down from last year in home goods (-8%), sporting goods (-6%), and health and beauty (-6%). In addition, all three verticals recorded major attempts of various schemes by fraudsters and customers trying to scam the system.
Home goods had a significant decrease in consumer abuse in April, but that’s not saying much. In March, home goods exploded with a 3705% increase in customers angling to defraud merchants; in April, it was down to 232%, Signifyd data shows, but that’s still very high. Customer abuse is initiated by legitimate customers basically trying to get something for free. A customer might complain an item wasn’t received, when it was, or that the item was damaged, when it wasn’t. None of the other verticals recorded an increase in consumer abuse attempts. In fact, several showed a decline in abuse attempts from a year ago.
Geo-Spoofing Leads All Fraud Attacks in April
Signifyd data shows the fraud scheme of the month was geo-spoofing, which occurs when a fraudster tries to mask the IP address from which an order originates. Some people use this scheme to change their device’s location through a virtual private network (VPN) to access streaming services, such as a baseball game that is blacked out in the home location but accessible in another region.
In ecommerce fraud, a geo-spoofer hides the true location of the device not to watch a game, but rather to fool a merchant so that the merchant believes that the device is in the hands or home of a legitimate account holder. In April, geo-spoofers targeted home goods, which rose 122% in attempts from last year, and health and beauty items, (up 120%), but it was sporting goods that once again has the most geo-spoofing attempts, according to Signifyd data.
Geo-spoofing in sporting goods was up 170% in April, a significant decrease from March’s rise of 638%, but still off the charts. The sporting goods vertical overall had a disappointing showing in April, closing with a negative 6% in sales, year over year. Sporting goods also had a huge 69% increase in fulfillment time – which begs the question: Why would anybody, even a geo-spoofer, want to wait that long for a basketball?
Photo by Getty Images
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