Original Research Report 2022-2023

State of Consumer Attitudes on Ecommerce, Fraud & CX 2022-2023

A retrospective look at how the pandemic changed consumer attitudes and behaviors, and what ecommerce businesses can expect moving into the post-pandemic era.

Without a doubt, the COVID-19 pandemic permanently transformed the ecommerce industry. Before 2020, online shopping was reserved mostly for the “tech-savvy” consumer. Today, it has become an essential part of most households in the modern world.

For ecommerce businesses, the last three years have resulted in a complete paradigm shift within the industry – leading companies of all sizes to wonder what’s next.

In this report, we’ll highlight how the industry has changed, bring you up to date on the latest consumer behavior data from our original research and provide insight into where the industry may be headed.

First and foremost … online shopping is here to stay.

Ecommerce Has Become Mainstream

Complete Disruption

Pandemic-related shutdowns created complete disruption in shopping habits. Brick-and-mortar stores had to become online retailers almost overnight – an easy transition for some early adopters and a real struggle for other businesses.

Consumers were forced online quite abruptly as well – separating the experienced ecommerce shoppers from the novices.

By the end of 2020, ecommerce shopping increased by nearly 60%.

Industry experts estimated that retail was reinvented in 2020, with five to seven years of online shopping growth happening in the last four months of that year.

Innovation Rising

Retailers and businesses of all sizes started to find their ecommerce footing, making way for technology and channel innovation.

Buy online, pick up in-store (BOPIS), curbside pickup and contactless payments were introduced as a way to provide a better customer experience.

As a result, consumers became more comfortable shopping online, even after brick-and-mortar stores started reopening.

45% of consumers were shopping online once or twice a week.

A New Normal

In 2022, online shopping became habitual and had significant peaks –especially in countries where consumers received paycheck protection loans and other financial incentives. 

Despite having full access to brick-and-mortar stores, consumers were still shopping online with great frequency.

Nearly 55% of consumers were shopping online once or twice a month.

When we take a closer look, we can see a number of ecommerce shopping trends that have shaped consumer behavior, starting with the rise and fall of ecommerce industries.

How Ecommerce Industries Have Shifted

As soon as the pandemic started, consumers were learning how to navigate shopping online and discovering stores and websites they never knew existed. This led to mixed results for a variety of industries.

Online industry winners and losers

In 2020, the travel and airline industry took an obvious hit. Aside from road trips, consumers weren’t going anywhere. Instead, while they were stuck at home already, consumers began making their homes a destination worth visiting. Suddenly, they had time for all the potential home improvement projects they had been putting off. The inspiration to renovate and redecorate made the home goods industry a big winner.

In 2021, when customers realized they would need to occupy themselves for a longer period of time than just a few months, the consumer electronics industry started to gain steam. We also saw novice ecommerce consumers leaning toward smaller-value apparel and accessories, where experienced online shoppers felt more comfortable buying big-ticket items like mattresses and sofas.

Those trends have continued – with a few changes. Today’s consumers no longer have the stimulus checks and forgiveness loans they used in the last few years for non-essential purchases. That, combined with general concern about the economy, has caused consumer financial belts to tighten.

Does that mean trouble for ecommerce businesses? Not necessarily.

“The businesses that will fare the best in this new era of ecommerce are the ones that were online long before the pandemic and the ‘pure players’ that only sell online.”

Rafael Lourenco
Rafael Lourenco
ClearSale Executive Vice President & Partner

A good example of this is the ticketing and event industry. Our ecommerce experts anticipate that this will become a top industry in the next year or two. Why?

The industry has almost completely transitioned online. Think about the last time you bought a ticket from a physical box office. Another factor is that consumers are now fully able to return to live venues where they can enjoy concerts, festivals and other events – which has become incredibly popular over the last year. Lastly, the cost of concert tickets has increased, which is boosting revenues in those industries.

Even ticketing businesses that weren’t “pure players” before will be set up to succeed.

We’ve seen even more trends emerge in the last few years.

Consumer spending is leveling out

While ecommerce shopping has become commonplace, how much shoppers spend online is leveling out or decreasing.

What a difference a year makes

  • 23% of consumers spent less than $50 per month in 2022, compared to 12% in 2021
  • 51% spent $50-$200 per month in 2022, compared to 38% in 2021
  • 16% spent $200-$400 per month in 2022, compared to 19% in 2021
  • 8% spent over $400 per month in 2022, compared to 50% in 2021

Local online shopping is still strong

Consumers are growing more comfortable online and slightly increasing their cross-border shopping — but when given a choice, ecommerce shoppers are loyal to local stores.

Online consumers are even more loyal to local businesses

Generational Shopping Habits Have Emerged

The generation gap is becoming even more apparent.

In 2021, we began to see some patterns emerge as more consumers became comfortable with ecommerce, but one thing is clear: Online retailers and businesses can no longer use a “one size fits all” approach. Today’s ecommerce landscape has to cater to four or five generations of consumers with distinctly different behaviors and attitudes.

In this year’s original research, we took a deeper look into generational habits and found some interesting trends.

Younger consumers shop online considerably more than their elders.

Our research showed that 54% of Gen Z and millennials shop online three or more times per month, and their purchases are most often apparel costing less than $200. This has likely helped boost the popularity of brands like Shein, a retailer with significant penetration across web and social media channels.

In contrast, 59% of Gen X and baby boomers said they shop online only once or twice per month, with the most popular industries being apparel and home goods.

We also found disparities when it comes to ecommerce channels and personalization.

Take a look at how each generation shops online and what online retailers can anticipate in consumer behavior for each generation.

“Ecommerce companies truly need to understand their consumers. Who are they? What are their expectations? They must think about how each generation makes purchases and what their motivators are for buying, and then design their websites accordingly.”

Sarah Elizabeth
Sarah Elizabeth
ClearSale Managing Director of Product Marketing

Next, let’s take a look at how consumer attitudes toward fraud and false declines are changing.

How Consumers Perceive Fraud & False Declines

At the same time as consumers have been adapting to shopping online, fraudsters have taken advantage of their naivete to test out and perfect their tactics and schemes. Between 2020 and 2021, the Federal Trade Commission received nearly 5 million fraud reports from consumers, equaling $3.5 billion in losses. And ecommerce payment fraud is expected to top $206 billion through 2025.

Fraud continues to evolve

These fraud schemes range from age-old tactics to innovative new models, including:

Account takeover (ATO) fraud

Fraudsters use a victim’s personal information to take over their accounts. This tactic accounted for every fifth login attempt and 13% of U.S. ecommerce fraud costs in 2021.

Triangulation fraud

Fraudsters use a victim’s personal information to take over their accounts. This tactic accounted for every fifth login attempt and 13% of U.S. ecommerce fraud costs in 2021.

Friendly fraud

A customer pays with a valid card, but then disputes the purchase for any number of reasons. Typically, friendly fraud is the result of an innocent mistake.

Policy abuse

A wide variety of schemes that involve fraudsters attempting to take advantage of online companies by abusing their business policies.

Fraud-as-a-service (FAAS)

One of the most recent trends, FAAS involves renting bot networks from fraud "service providers" to launch large-scale fraud campaigns against websites.

As has been the case every year, online fraud is increasing. Nearly half of consumers who participated in our research reported that they experienced more fraud in 2022 than the year before.

This is making consumers much more wary about where they shop online.

The second-to-last data point is important because it shows that customers appreciate being contacted to confirm an order – an approach that’s unique to ClearSale’s fraud prevention solution.

Unlike other fraud prevention solutions, we never auto-decline a suspicious order, because we know that approximately 58% of declined transactions are actually legitimate orders.

If you’re currently utilizing a strategy that heavily relies on fraud filters or auto-declines, you could be leaving revenue on the table.

Why you should be concerned about false declines

False declines happen when a valid customer’s order is mistaken as fraudulent and the purchase is declined.

Our research shows that today’s consumer is twice as likely to experience a false decline than be a victim of online fraud.

When false declines happen, consumers don’t respond well. Our research shows that 41% of consumers will never return to your store after a false decline, and 32% say they will complain about their experience on social media.

“It’s insulting, it’s a hassle and it slows consumers down. Think about a mom with three young kids who has little to no time for herself, let alone the time to figure out why her purchase has been declined. She’s not going to ask her credit card company; she’s going to complain to her friends.”

Elma Ocampo
Elma Ocampo
ClearSale International Marketing Director

We can see a more detailed picture of consumer attitudes toward false declines when we break it down by generation.

How does each generation
respond to false declines?

What can you take away from this?

False declines will drive away customers of all generations, and they’ll ruin your brand’s reputation with younger customers.

Both fraud and false declines erode the customer experience, which has become a critical focus for every ecommerce business.

Navigating the Age of Customer Experience

How your customers perceive your brand is important, but the actual experience they have shopping on your online store may have a bigger impact on their loyalty. That’s where customer experience (CX) comes into play.

Ecommerce businesses need to deliver a CX that not only delights customers – it keeps them coming back. But when your customers’ demands vary widely, many businesses either give up or deliver an unsatisfactory CX across the board. 

Cater to your customer

Younger ecommerce customers expect personalization, while older online consumers consider personalization to be a nuisance. While navigating these two opposite CX expectations may confuse some ecommerce businesses, we’re also seeing how innovative online retailers are adding personalization to the shopping experience in a way that appears entirely organic.

“Mass merchants like Amazon are creating custom content and profiles to understand their customers’ tastes. Depending on their searches and demographics, users are shown highly curated recommendations pages with a selection of products that caters to their specific needs.”

Victor Islas
Victor Islas
ClearSale Regional Director, LATAM

In Latin America, apps like Rappi and Postmates utilize artificial intelligence (AI) to dynamically change product recommendations based on the time of day, the weekday and other customer behaviors.

Shore up your shipping and return policies

Consumers place a high priority on shipping – it’s almost as important as price. The same goes for returns. Ecommerce shoppers want to know they can return what they purchased, and their ability to do so can make or break a sale.

  • 80% of consumers said they would be willing to wait longer to receive their products if the shipping was inexpensive or free
  • 64% of consumers review a site’s return policy before placing an order
  • 75% of consumers say that a good return policy will bring them back to shop again.

But if they can’t easily find or understand a company’s shipping and return policies, customers will likely just move on. Not paying attention to how policies are communicated on a site could cost you valuable customers. As highlighted in the previous section, not paying attention to how policies could be misread or manipulated can also make online businesses more susceptible to fraud.

Offer a range of payment options

Contactless payments continue to be popular, making digital wallets a must for more savvy customers. We found that 82% of Gen Z shoppers and 78% of millennial shoppers prefer digital wallets as a payment option, and over half of the two generations combined would abandon their purchase if a digital wallet option wasn’t available.

Ecommerce businesses need to make sure that their brand is recognizable, and their user experience must be consistent across the board. That way, younger ecommerce shoppers can easily start a shopping experience on one channel and make the actual purchase on another.

“Don’t assume that a purchase decision will only be made on your website. Younger consumers are persuaded through blogs, reviews, influencers, etc. Create opportunities for these generations to do their research.”

Rafael Lourenco
Rafael Lourenco,
ClearSale Executive Vice President & Partner

How ClearSale Prevents Fraud, Chargebacks & False Declines

At ClearSale, we have developed a global lens and large database that allows us to help clients eliminate fraud threats and prevent chargebacks, while approving more orders, faster. Our knowledge of fraud patterns and trends stems from the longest history in the industry and an unmatched global experience fighting fraud.

We’ve worked with businesses around the world in some of the most high-risk regions and industries. Our massive transaction database is constantly learning as more orders are processed, and we can see the impact fraud has on diverse markets. This makes it easier for us to identify fraud trends as soon as they emerge and use those insights to make more accurate decisions.

Machine learning/AI

All orders are screened using artificial intelligence and machine learning to process transactions and fine-tune fraud models based on customer behavior. Each order is assigned a fraud score. Orders with a score that meets customer-specific thresholds are automatically approved. Orders with a score that makes them questionable or suspicious are flagged for further review.

Contextual fraud review 

Our data scientists and fraud analysts perform secondary reviews of suspicious and questionable orders. They use their expertise and understanding of fraud trends – while sharing that information with the client’s team – to determine if a transaction is valid or not. And, if a company so chooses, our analysts can pleasantly and very diplomatically reach out directly to customers to confirm they made the purchase — all the while, training your team to do the same. 

Interactive client dashboard

An interactive dashboard allows clients to review all orders and contribute to contextual review with information about VIP clients and orders that should be automatically approved in the future. Clients also utilize the dashboard to track chargebacks on approved orders, making it easier for ClearSale’s end-to-end chargeback management team to dispute and deliver a resolution.

Post-processing audit

Machine learning/AI can also be used post-processing to validate decisions and help find patterns to be aware of moving forward. For instance, our auditing program offers a safe test environment where we analyze random sets of declined transactions to see what would have happened if we had approved the orders. This enables us to measure the accuracy of our client’s automated rules and fine-tune them as needed.

This hybrid approach has earned ClearSale high praise from our clients and industry experts.

"ClearSale allows us to focus on running a business instead of fighting fraud. We were skeptical, but ClearSale has proven themselves time and time again. We couldn’t be happier with their performance.”

"ClearSale has allowed us to seemlessly scale without worrying about having the resources to handle it. Now we can focus on what we do best — product development, taking care of our customers, and marketing and selling our products.”

"With ClearSale, our fraud management was integrated right into our Shopify within 10 minutes, and ClearSale was analyzing our transactions the same day. It's saved us a lot of money and time.”

"ClearSale's great differential is its partnership approach, and a very committed team and company. Everyone there is engaged in delivering outstanding results, which is why we have never considered a different solution provider. The results often exceed the contracted goals."

The clear choice for ecommerce fraud protection

In G2’s Summer ’23 Report, ClearSale was ranked at the top for fraud protection and fraud detection, with 94% of users saying they would recommend us to their colleagues.

By delivering original research, ecommerce expertise and fraud prevention, ClearSale is a clear innovator in risk management technology. 

“We are humbled by this validation from real clients that we truly strive to protect them and their customers from ecommerce fraud. It’s also a testament to our incredible team of ecommerce industry experts who leverage innovative technology and human intelligence to provide the greatest protection, customer experience and service for online retailers.”

Gonzalo Pascual
Gonzalo Pascual
ClearSale International VP of Sales and Marketing

Ready to
Get Started?

Let’s Talk!

Find out how to prevent chargebacks AND sell more.
Talk with a ClearSale CNP fraud expert today!