There is some dispute over who first came up with the saying, “You never get a second chance to make a first impression,” but our money is on an ecommerce professional.
Think about the work behind attracting a first-time customer to your digital storefronts. It’s complicated. It’s costly — and growing more expensive by the day. It takes patience, persistence and plenty of well-thought-out strategy.
But acquiring a new customer is not even half the battle. Next comes your one chance to make that first impression. One slip and that newly acquired customer could be gone — for good. Your website must dazzle. Your site search needs to be intuitive. Your descriptions crisp. Your photos engaging.
Then comes the heavy lifting: Moving your new customer through your site search, product pages, add-to-cart, checkout; delivering (literally) on fulfillment and being around to provide helpful support and easy refunds and returns, should it come to that.
Do it right and in the best case, you have a customer for life — a customer who feels like a VIP and a fan of your brand. Granted, as customer acquisition costs and consumer expectations soar, that’s never been more difficult. Or more important.
That’s where this blog post comes in. We’ll take a look at the growing importance of making a sterling first impression and explore some ways to make that happen.
The Day Zero conundrum. It’s the chicken-and-the-egg problem that comes when a customer that an online brand has never seen before shows up. On its own, the merchant has no history, no knowledge, no way to personalize the shopping experience for this new customer. It’s a retailer’s one chance to start the path to building customer lifetime value. CLTV is the gold standard in ecommerce. Growth at any cost is so pandemic era. Today, investors and shareholders demand profitable ecommerce growth and consumers demand a frictionless shopping experience that leads to it.
So what to do? Yes, deploy AI. But more specifically, deploy a commerce network model — a world in which one merchant can draw on the experience and data of thousands of other merchants.
Enter Signifyd’s Commerce Protection Platform :
- Tap into a global ecommerce network powered by transaction data from thousands of merchants worldwide.
- Use AI-driven fraud prevention to instantly sort fraudulent from legitimate orders and recognize bogus claims of lost or damaged items.
- Optimize refund and return policies with an intelligence engine that customizes responses based on risk assessment.
The result? A data-driven approach to cracking the Day Zero challenge — transforming first-time shoppers into long-term VIP customers while boosting conversion rates and reducing friction at every step.
Why a Day Zero VIP strategy is more important than ever
First, the why. Why provide a VIP ecommerce experience on Day Zero? With more dollars chasing digital ads aimed at attracting new customers, the cost of customer acquisition has been rising for years. Loyalty Lion, a loyalty program solution, found that over a recent five-year stretch, customer acquisition costs increased by 60%. That makes every new customer more precious than ever.
And as hard as it is to attract a new customer, keeping that customer and ensuring they come back over and over is harder still. That work starts on Day Zero — the millisecond before a first-time customer arrives on an ecommerce site.
In order to have a chance in the retention game you need to picture that consumer as a VIP and roll out the red carpet. You can’t afford any hiccups that will drive a consumer from your site or leave them with a bad taste and the determination to never buy from you again.
As online shopping has become a bigger part of consumers’ lives, their expectations have grown. Shoppers have told us many times over that experience matters.
- 48% of consumers surveyed by polling firm Talker on behalf of Signifyd said they wouldn’t tolerate more than one bad online experience before abandoning a retailer.
- 65% said they would stop buying from an ecommerce merchant after enduring a bad experience related to returning a product.
- 62% said a good returns experience would encourage them to make repeat purchases.
- 35% of consumers would abandon their cart or shop elsewhere if their order was wrongly declined for fraud.
How do you know a customer you haven’t ever seen?
So, why doesn’t every merchant treat every Day Zero shopper like a VIP? It’s hard. It’s especially hard to create a great experience while also protecting the business from those seeking to take advantage of the very policies retailers put in place to make online shopping easier. When a particular merchant doesn’t have any history with a customer, they just don’t know whether the customer’s particular shopping quirks reflect the way they roll or are warning signs of a scammer.
Does the new customer typically use a VPN? Are they likely to use discount codes? What payment method do they prefer? Do they tend to ship orders to friends, a second home, a hotel? Have they submitted fraudulent orders in the past? Do they travel a lot? Are they spearfishers who know what they want, hit a site and buy it within minutes? Do they often order far from home? Have they filed disputes regarding missing packages? Were the disputes justified? Do they have a history of returning items? Were the returns legitimate? Did they actually return the same item they originally purchased?
As digital lives accelerate, online merchants must adapt quickly to serve consumers
Signifyd Head of Strategy and Chief of Staff Nicole Jass talks about how new ways of shopping online bring new challenges for those protecting ecommerce from fraud. Consumers are more interested in protecting their privacy. There is a growing trend toward social shopping, which encourages online behavior far different from shopping and browsing on a retailer’s website.
The truth is, nearly everything that makes it easier and more enjoyable to shop and buy and quickly receive items purchased online also makes it easier for bad actors to defraud a merchant or take advantage of the merchant’s business policies.
For merchants, then, the key to providing a VIP experience while protecting the business is to understand the identity and intent behind each online transaction starting on Day Zero. And the way to acquire that depth of understanding in the case of a new customer is through a network that supplies a vast amount of data to AI-driven models built to determine identity and intent.
How AI and data drive the Day Zero VIP customer experience
Signifyd’s Commerce Protection Platform, for instance, uses transaction, behavioral and historical data from a Commerce Network of thousands of online merchants across the globe to recognize patterns and instantly sort fraudulent from legitimate transactions. The platform’s precision allows Signifyd to provide merchants with a financial guarantee. If Signifyd approves a transaction that turns out to be fraudulent, it will reimburse the merchant for all the costs involved in the fraudulent order.
Signifyd can apply the same degree of intelligence to delivery disputes, return and refund requests and promotion use, scuttling efforts to abuse or defraud the system.
All of which sounds great in theory, but what does the first-time experience look like for a new customer in the real world? Where are the potential trouble spots for a merchant looking to treat that customer like a VIP? And how does applying the principle of understanding identity and intent in the day-to-day frenzy of an ecommerce business work?.
Real-world ecommerce challenges and solutions
Every touchpoint in a customer’s journey presents an opportunity to impress — or frustrate. Let’s break it down:
Account creation: Once a shopper arrives on the site and decides they want to buy, are they required to create an account? That might be good for the merchant — more identifying information to be sure the shopper is who they say they are; more data for marketing purposes and opportunities to nurture loyalty with a points or discount program. But it’s a pain for a new shopper who hasn’t decided whether this will be a long-term relationship worth the extra steps to create an account.
In fact, the Baymard Institute found that 26% of online shoppers abandoned their carts when they were asked to create an account to check out. Moreover, 43% of shoppers told software marketplace Capterra that they prefer guest checkout. And Signifyd’s own data shows that the percentage of online orders placed through guest checkout has increased from 38% in 2023 to 47% by the end of 2024.
Given consumers’ preference for guest checkout, offering the option seems like an easy choice. But the balance between great experience and protecting the business is a real thing. The percentage of orders identified as fraudulent placed through guest checkout has increased much faster than the rate from logged-in accounts.
With guest checkout the portion of high-risk orders increases dramatically
Since early 2023, fraud pressure on Signifyd’s network from logged-in accounts has increased by 124%, while fraud pressure from guest accounts is up 258%, a Signifyd analysis shows.
But because Signifyd has seen 98% of first-time shoppers elsewhere on its network, Signifyd customers can offer the VIP experience of guest checkout to customers making their first purchase on their sites.
Promotion and discount application: What better way to welcome a new customer than to offer them exclusive deals on early purchases? But how can you be sure your “first-time customer” is really a first-time customer and isn’t abusing a one-time code they are not entitled to? You know how. By using the same data and network intelligence that detects fraud, Signifyd customers can reliably identify promo abuse. Knowing who is entitled to particular promotions not only stops those who would take advantage, it means merchants can confidently give the Day Zero VIP treatment to those who deserve it.
Checkout: Once a shopper has made it to checkout, there is no doubt the new customer wants to buy. The question is: How does the customer want to pay? It could be credit card, debit card, any number of digital wallets. They might want to pay in installments using any number of buy now, pay later platforms. Some may prefer cryptocurrency or bank-to-bank payments.
Social shopping and headless checkout
And don’t forget those who do their shopping on TikTok, Instagram, Facebook and other social media platforms. Do you allow shoppers to checkout directly from the sites on which consumers are increasingly shopping?
While social remains a relatively small channel, it is growing rapidly and positioned to continue to do so. TikTok alone pulled in $1 billion a month in the last half of 2024, according to Business Insider and pushed Amazon into launching Haul to compete with the wildly popular social platform and now ecommerce marketplace.
The rise of mobile, the focus on social commerce by platforms like TikTok and the embrace of livestream shopping by marketplaces like Shein all point to a social commerce future.
The total cost of insulting a first-time customer
Signifyd General Manager EMEA Nikhita Hyett digs into how the role of a modern fraud fighter is revenue optimization. That focus leads to an abundance of good things and avoids a raft of bad things that destroy the Day Zero VIP experience.
The payment method a shopper favors can depend on the region they live in, the vertical they’re shopping in, the price point of the item they’re after. But knowing what a shopper’s favorites are is crucial. Research 451 reported in 2021 that merchants lost out on $20 billion in revenue for failing to provide consumers with their payment method of choice. The $20 billion was only the start when you consider how many of those aborted purchases involved Day Zero shoppers who never returned.
Whatever the payment method, it’s important to have a future-focused fraud protection solution. Yes, to avoid accepting a fraudulent order, but much more importantly to avoid incorrectly declining a good order from a Day Zero VIP. Remember, 48% of consumers polled said one bad experience would be enough for them to give up on a retailer. For those who did stick around, a Signifyd analysis found that their average order value after a false decline fell by 17%.
Signifyd eliminates those bad experiences that chase new customers away. Its Commerce Protection Platform increases order approval rates by an average of 5% to 9%. That increase in approved orders represents legitimate customers who otherwise would have been turned away, feeling nothing like a VIP.
Fulfillment: Serving Day Zero customers requires being ready to fill an order the way the new customer wants it filled. It might be that they’d like their package dropped on their doorstep. Maybe they want to pick up their online order in a physical store. Or maybe they prefer curbside.
Consumers have told us that all channels are important to them, meaning merchants need to create smooth experiences across the board. While the website still rules for online shoppers, according to Signifyd’s consumer survey, 42% and 34% respectively expect to be able to pick up in store or at the curbside.
Source: Talker survey 1,000 shoppers
That fulfillment flexibility creates a need for speed. Online orders need to be ready for in-store or curbside pick up within an hour or two or the service loses its appeal. A true omnichannel retailer doesn’t have time for lengthy manual fraud review cycles — and, honestly, customers don’t have the patience for them.
Lengthy fraud reviews cause problems for home delivery, too. In an era when Amazon is getting orders to customers in a matter of hours, retailers don’t have the luxury of conducting manual reviews that can stretch up to 24 hours.
AI-driven fraud protection solutions, like Signifyd’s, deliver ship-or-don’t-ship orders within milliseconds and automate the order flow from there, making sure Day Zero customers are getting the experience they deserve.
Refunds and returns: Returns are no longer a cost of doing business for online merchants. With the rise of ecommerce as a sales channel, returns now threaten to eat the business. In 2024, online return fraud cost merchants more than $46 billion, according to a Signifyd analysis based on data from the National Retail Federation and retail return statistics.
The challenge for merchants is that they can’t simply clamp down on returns across the board, given how important easy returns are to online shoppers. In fact, 65% of consumers said they’d stop buying from an online brand after having a bad return experience, according to a Talker survey conducted for Signifyd. And when asked what makes for a good returns experience, 48% of respondents selected fast refunds.
The solution? Personalized returns — or using AI and large data sets to assess the risk arriving with each return and refund request and automatically calibrating the response to that request. Signifyd’s Decision Center provides that sort of flexibility, meaning a Day Zero VIP could receive a fast refund, while a customer with a history of untrustworthy orders or returns could be required to wait for a refund until the returned item was inspected.
The road to providing a VIP ecommerce experience on Day Zero is a long one with its share of blind curves. But the payoff is immense. By leveraging AI-driven ecommerce insights, fraud protection solutions and a global commerce network, merchants can transform first-time buyers into lifelong customers while boosting conversion rates and maximizing CLTV.
Ecommerce leaders must adopt future-focused growth strategies to create seamless, data-driven shopping experiences that keep customers coming back. And with the right tools, achieving that vision is entirely possible.
Photo by Getty Images
Want to provide a VIP experience on Day Zero? We can help.
