Sports Industry Guide

Chapter 1

Get Ready for the Ecommerce Sales Wave

The wave is coming. And we’re not talking about the stadium wave — although, it’s been so long since we’ve enjoyed an event like this, we all may need to brush up on our timing.

We’re talking about the virtual pitch invasion that’s coming for every ecommerce business selling absolutely anything related to the World Cup. Think Christmas, Black Friday and your biggest sale combined, then turn it up to 11 — it’s going to get wild!

The pressure is on, especially for time-sensitive sales promotions … the name of the game in World Cup campaigns. Your business has to be ready for all the sales. This also means you’re going to get a swath of new customers (Gooooooooal!) who are going to look a lot like fraudsters (Noooooooo!).

Be wary of new customers
looking like fraudsters

In our original research, State of Consumer Attitudes on Ecommerce, Fraud & CX 2021, we found that the pandemic has changed where people shop, with 78% of consumers increasing their online shopping frequency/amount.

The number of new online consumers will be through the roof, and they tend to be a bit clumsy in the beginning. First-time online consumers are fickle and move things in and out of their online cart, or they’re unfamiliar with ecommerce shopping carts and buy each item individually. And they will likely do a lot of their online shopping at once.

All of these “rookie” habits are also major fraud indicators, which will confuse your team (or your algorithm).

New customers also may have trouble typing in their personal and payment information. Odds are, they’ll have a go at that more than once, making your fraud analysts anxious to pull out their yellow cards.

So how can you keep things moving toward the goal? Make sure to amp up the customer experience with easy queues for popular items and as little friction as you can offer without knowing much about these new shoppers. The simpler and easier the experience, the less these newbies will wander offsides and into red card territory.

Your ecommerce fraud team is going to have their work cut out for them. And there’s even more to consider — most of the orders you’re processing fall into high-risk categories.

Chapter 2

High Sales Volume Can Mean High Risk

Most (if not all) match tickets will presell online and sell out in minutes. World Cup swag sites, jerseys, shoes and other sports apparel and sporting goods will generate extremely high ecommerce sales volume as well.

And don’t forget about online food delivery, which will spike during this time. Restaurants and cafeterias will need to adapt to match times, high volume orders and a demand for above-and-beyond customer experiences.

These sales spikes result in overwhelmed fraud teams.

And fraudsters know this, which is why the top post-pandemic ecommerce markets have become prime fraud targets for criminals. For online businesses in these high-risk industries, the stakes are much higher because they tend to experience more chargebacks and more fraud. Unfortunately, many teams overcorrect, resulting in too many good orders getting declined.

Here are some other industries facing increased demand from World Cup fans … and increased attempts from fraudsters:

Consumer electronics

It only happens if there are pictures and/or video, right? That means consumers need cameras and smartphones to record and post their World Cup festivities on social media.

They need state-of-the-art video display and sound systems for their watch parties. And any type of sporting event inspires more gaming and gaming device purchases.

It’s no wonder consumer electronics ecommerce revenue is expected to be worth over U.S. $930 billion by 2025. This is great news for consumer electronics retailers — as long as they keep in mind that this industry is a fraud wonderland, for four main reasons:

High-risk items are expensive, which means high order values (cha-ching!).
Technophiles and audiophiles are always looking for the bigger, better thing and fraudsters can deliver. It’s easy to resell stolen goods.
Shipping is fairly inexpensive for smaller devices, as is storage. That makes smartphones, tablets, laptops and wearables perfect targets.
The resale value of consumer electronics is almost one-for-one, which means more money for the fraudster.

Televisions

We had to give TVs their own category. When it comes to the World Cup, you either watch in the stadium or on a big screen!

And size does matter in this market: Since the beginning of 2020, consumers have consistently increased their TV size by an average of 3 inches — three times the previous average. In February of this year, 44% of shoppers bought larger screens and 38% purchased for better picture quality. (After all, you can’t yell at the referee through the TV if you can’t see what happened!)

Ticketing

For many of the same reasons, ticketing has become a high-risk industry. Websites like Ticketmaster, StubHub and Vivid Seats have grown in popularity, as have apps such as GameTime and others. Online event ticket sales have become a U.S. $6.8 billion market. And with the emergence of secondary market sales, where original buyers can resell their tickets, there is even more opportunity for consumers and fraudsters.

For the World Cup in particular, it would be wise to warn consumers about counterfeit tickets and fake sites. Why? Because as the game dates approach, the amount of fraud increases. Criminals know that some World Cup supporters will pay almost anything to see a game, watch their favorite player and cheer their team in person. It’s a motivator that fraudsters will take full advantage of and exploit.

Apparel, fashion & luxury goods

Traditionally, this industry was almost exclusively brick-and-mortar-based, but younger consumers are pushing these brands to move online — and they’re bringing their disposable income to the table. In fact, millennials and Gen Z are expected to account for 70% of global luxury goods purchases by 2025.

And guess what else those two demographic groups love? Yep, it’s soccer and the World Cup.

The average age of a World Cup watcher is under 35. That’s not to say the “OG” isn’t represented, but when you look at fans worldwide, over two-thirds are younger than 45. That intersection will make for high sales volumes for this year’s World Cup.

Again, be wary of the many counterfeit sites popping up with low-quality versions of jerseys, shoes, hats and other items. This is another opportunity for online retailers to communicate with customers and make sure they know you’re the real deal and not selling fake goods.

Chapter 3

No Matter the Country,
We’re All Good Sports

Another factor ecommerce businesses need to consider is the overwhelming amount of cross-border commerce coming to your online store.

Throughout Latin America — especially in Brazil, Argentina, Costa Rica, Mexico and Panama — the World Cup is so much more than the games themselves. It’s about patriotism, community involvement and, most of all, bragging rights. When the national team plays, the pride of an entire country is at stake. The energy is unlike anything else.

But not every fan lives in their team’s home country.

The glory of the World Cup is that teams from around the world have supporters and fans everywhere. And these fans may choose to shop across borders to support their teams, get a sample of that country’s culture, or simply find an item that isn’t available anywhere else. (You might even find some rival supporters and fans buying from your site. Remember: Just because they trash-talk your team, they aren’t necessarily fraudsters!)

If you really want to attract customers and build trust in cross-border markets, follow these tips:

Focus on customer experience (CX)

The ClearSale team can’t stress customer experience enough. This is your opportunity to represent your country and keep customers coming back. What’s included in CX?

Make sure your website and/or app is easy to navigate. Customers who get lost find their way to another retailer’s site. Don’t lose a sale because the shopping experience was too difficult.
Think about languages. Of course, every World Cup lover speaks the language of soccer, but they may not be fluent in your country’s language. Enable translation of text and consider that your chatbot should be multilingual.
Use social proof. Remember that your primary consumer is likely in a younger generation and will be looking for testimonials, reviews, social media likes, shares and follows.

Be strategic about logistics

With almost every World Cup-related purchase, time will be of the essence — especially as we get closer to the event. Not all countries have spectacular shipping times, so full disclosure on your website about country-specific and supply chain issues can have a direct impact on your chargeback mitigation needs.

If you have a strong customer base in other countries, reach out to them proactively and make sure they are buying their items early enough for on-time shipping.

Make sure your business doesn’t get red-carded for legal or regulatory violations. Know the rules where you’re selling. For example, any sales into the European Union are subject to General Data Protection Regulation (GDPR). The penalties for those violations start at 20 million euros!

Share your playbook

This is key: Make sure your policies are easy to find. Communicate how much purchases will cost, including things like taxes, shipping, fees, rush orders, customization and any other additional charges. The more your cross-border customers know up front, the less likely they will be to have buyers’ remorse and initiate a chargeback.

Let them pay their way

There may be one way to play soccer, but there are myriad payment methods and they vary by country and region. Here are some trends to keep in mind:

Australians use credit and debit cards nearly 50% of the time, but digital wallets, bank transfers and cash-on-delivery are good bets too. Online shoppers in France and Spain prefer credit cards. German consumers prefer PayPal, digital wallets and other alternative payments. Greek shoppers are fans of prepaid cash cards. And in the United States and Canada, credit card penetration is high with digital wallets and other alternative payments close behind in popularity.

Latin America is where we see a lot of diversity. Poor banking practices and high fees make Mexican consumers more likely to use cash — the same goes for Colombia. But in Argentina, consumers prefer to pay with credit cards or instalment services.

Have a plan for success

FIFA is anticipating a global television audience of 5 billion! To put that in perspective, the viewing audience in 2018 was a record-breaking 3.5 billion. (We told you the World Cup is the greatest sporting event on the planet!)

Not only will people view matches on TV, but they’ll also follow teams on social media and watch videos and ads on YouTube. High viewership like this puts new brands and products in front of consumers in a way that doesn’t happen in the stadium. An estimated U.S. $141 million is being poured into advertising, mostly by World Cup sponsors.

And those ads can be a game-changer for brands. For example, Adidas Football’s “All in or Nothing” YouTube campaign ran during the 2014 FIFA World Cup in Brazil, featuring footballers like Beckham, Messi and Armero.

Each video ended with Adidas asking viewers to click one of two buttons: “All in” or “Nothing.” The “All in” option was just that: Viewers were directed to a webpage where they could opt into an insider’s view of Adidas’ Word Cup social media activity.

The campaign’s success was massive: 38 million YouTube views and almost 6 million new Adidas fans globally. They also won countless new ecommerce customers, and swarms of new orders.

It’s a great problem for any retailer to have, right?

It is … as long as retailers have a plan in place before their ads run. That kind of attention is sure to attract plenty of fraud attempts. Fraud teams need to distinguish new users from fraudsters — but they can easily be confused. And simply declining suspicious orders is not a good idea. If your customers are already following you on social media, they will have no issue complaining about a false decline.

Ecommerce retailers need to be prepared in advance for their success!

Want to find out more about selling into a particular country or region?

Ecommerce Market Watch: Peru
Ecommerce Market Watch: Colombia
Ecommerce Market Watch: Ecuador
Ecommerce Market Watch: Chile

Ecommerce Fraud Risk: Germany
Ecommerce Fraud Risk: France
Ecommerce Fraud Risk: Spain
Ecommerce Fraud Risk: Greece

The Guide To Ecommerce In: United States
The Guide To Ecommerce In: Canada
The Guide To Ecommerce In: United Kingdom
The Guide To Ecommerce In: Mexico

A Guide To Ecommerce In: Vietnam
A Guide To Ecommerce In: China
A Guide To Ecommerce In: Australia

Even with all of this good sportsmanship, fraud is still going to have an impact — it’s definitely on the rise. In May 2022, The Paypers published key findings about ecommerce fraud, highlighting that fraud-related KPIs have risen for the second year in a row. Globally, the percentage of revenue lost to fraud increased from 3.1% to 3.6% between 2020 to 2021. Europe saw the only decrease, thanks to PSD2 Secure Customer Authentication enforcement.

So … what types of fraud should you expect during the World Cup?

Chapter 4

Know Your Opponents:
What to Expect from Fraudsters

We know soccer supporters and fans alike will be scouring the web for tickets and apparel, so there are certain types of fraud ecommerce retailers should be ready to face.

Online security company Kaspersky already detected 11,000 phishing emails with fake World Cup event invites just between Aug. 15 and Oct. 15 of 2021, which means fraudsters are ramping up.

What’s phishing? It’s a sport, of sorts, but the winners are criminals. Phishing happens when a fraudster sends seemingly trustworthy links via email, text message or even social media. These links then automatically install software (called malware) and give the fraudster access to the user’s device. Fraudsters use the credit card data, sign-on credentials and other information they find to commit account takeover (ATO) fraud.

Account takeover (ATO) fraud

ATO fraud happens when a fraudster leverages stolen personally identifiable information (PII) to take over user accounts and commit fraud. Often, they change account information so it is no longer accessible by the victim.

How big of a problem is ATO fraud? Try a 307% growth between 2019 and 2021. There’s no question that ecommerce businesses will have to contend with ATO fraud attempts during the World Cup.

Mobile commerce fraud types

Since so many World Cup fans are millennials and Gen Z, you can be sure a good majority of online purchases will be made with smartphones. That opens up another world of fraud.

Fraudsters are always looking for the advantage and have a full roster of creative tactics in their arsenal, including several types of mobile application fraud:

Click injection

When a fraudster injects a Trojan virus in one mobile application and it activates in another, giving them access to customer information.

In-app purchase fraud

Similar to ATO fraud, a fraudster uses stolen credit card information to create an account, load the account with in-app currency and digital goods, and then sell the account online.

Mobile payment app fraud

When a fraudster pretends to be a legitimate company selling special sweepstakes chances through non-traceable accounts.

Friendly fraud

When customers forget about a purchase, don’t recognize a charge or experience buyer’s remorse (in good faith and bad), their first reaction is often to dispute the transaction and initiate the chargeback process. With online tickets and other digital goods, that risk is high: A LexisNexis report found that fraud attacks on digital goods have been increasing exponentially.

How can you prevent honest (and some not-so-honest) mistakes? Here are a few tactics to try:

Keep detailed documentation about orders and charges in the event a chargeback is initiated and you need to prove the validity of a transaction.
Communicate with customers throughout their buyer's journey so they understand what they are purchasing and the policies involved.
Create and publish a clear return policy. Returns are a hassle, but they are much less expensive and less damaging to your business than chargebacks.
Over-deliver on customer service. That means keeping customers updated, answering questions, and going above and beyond to be memorable.

Chapter 5

Find a Balance Between Approval Rate
and Fraud Prevention

Now, before you assume that the best defense against fraud is to decline any order that looks suspicious, think again. Too many false declines will get your business in trouble with customers.

There’s no question ecommerce companies need a way to defend themselves against fraud. But heavy-handed policies, business rules and filters can result in too many penalties.

For instance, when your approach to fraud prevention is too rigid, it can decrease the number of orders you process (i.e., your approval rate). Low approval rates translate to less revenue. But it’s actually not the worst thing that can happen.

False declines, where legitimate customers are mistaken for fraudsters, are even more damaging to your ecommerce business than fraud. In our original research, we found customers have little to no patience when their purchase attempts are declined:

40% said they would never buy from that site again
34% said they would post about their bad experience on social media.

Remember, we are talking about a lot of millennials and Gen Z folks. They are even less forgiving:

45% of consumers under the age of 40 would stop shopping at a store over a false decline.
42% will complain about it on social media.

And if those younger customers find out that your site somehow allowed their information to be used for fraud … yikes!

84% of Gen Z online shoppers say they will boycott your store if it processes a fraudulent transaction using their personal information.

False declines are a particularly sticky subject in Latin America, where the average rate is a whopping 50% … and can result in long-term losses for businesses.

A lifetime of loss with false declines

False declines are incredibly costly — every $1 in false declines costs an online retailer $13. That’s a world-class loss.

Why is that number so high?

When a customer is declined and decides not to shop with you again, you don’t just lose their business for that transaction. You lose every transaction they will ever make with your business for the lifetime of that customer.

And if they share it on social media, you could lose the lifetime value of even more customers.

Chapter 6

Every Great Ecommerce Team
Needs an Experienced Coach

The good news: It’s not too late to call in a coach to help put a fraud strategy together. That’s what we do.

No matter the size of your business, World Cup season calls for a fraud prevention game plan to protect your company. Your defense should include a sophisticated combination of automated fraud protection and secondary review, where cutting-edge fraud technology can flag suspicious orders for expert fraud analysts to assess as needed.

At ClearSale, we help companies fight fraud using a proven hybrid approach:

Cutting-edge algorithms for automated approvals performed by AI-enabled systems that “learn” as more transactions are processed.
Sophisticated flagging processes for suspicious orders, including a customer-centric follow-up protocol.
A roster of over 1500 fraud analysts with expertise in global fraud analysis and detection, who perform secondary reviews of potentially fraudulent transactions.

Plus, we have the LATAM DNA needed to fight fraud in even the most high-risk regions of the world.

We understand individual markets better to help you to decrease false positives, approve more orders and make more sales. If you would like to know more about how we can help your online business prevent fraud during the World Cup and beyond, please reach out.

The champion is back!

Fraud-Proofing World Cup Ecommerce Campaigns

Are you ready for some fútbol?!

Let’s face it: The World Cup should be declared an international holiday.

Get Ready for the Ecommerce Sales Wave

Be wary of new customers
looking like fraudsters