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Fitness Products Shatter Online Sales Records During Lockdown

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By Jack M. Germain
Jul 20, 2020 4:00 AM PT

As traditional gyms, fitness centers, and health and wellness studios shutter during COVID-19, technology has kicked in to provide a replacement or an alternative for growing numbers of online shoppers.

Digital at-home exercise sessions and sales of home exercise and health equipment purchased online are fueling new consumer trends that could permanently supplant old shopping routines.

Research based on eBay’s fitness sales data shows gains of thousands of percentage points during the pandemic lockdown compared to 2019. Several other marketing studies duplicate those e-commerce results.

That is not a misprint. Sales of key at-home fitness equipment broke all sales records, especially since March, eBay sales data and other reports revealed.

Consumer spending habits across the U.S and throughout many other countries in the past six months have drastically changed. Much of that change is reflected in a mass consumer migration to e-commerce.

ACI Worldwide, which handles electronic payments for more than 6,000 organizations around the world, found that June produced the largest increase in e-commerce sales since the start of pandemic restrictions.

One of the biggest surprises in that research was the vanishing inventories of outdoor goods and electronics in vendors’ warehouses.

Numbers Tell the Story

At eBay, for example, sales of dumbbells during the 2020 lockdown period increased by 1,980 percent compared to March and April in 2019. The sales of weight plates, meanwhile, increased by 1,355 percent in the same period.

The eBay data analyzes more than 3 million sales. That research shows the most popular items during the lockdown periods were dumbbells and activity trackers, as people became more health conscious.

ales increases for the top 10 fitness products consumers purchased on eBay this YoY

This chart shows the sales increases for the top 10 fitness products consumers purchased on eBay this year over last year.

– click image to enlarge –


eBay’s research is not an anomaly. Several other studies tracking new consumer shopping patterns for in-store and online purchases are in flux. But the trend clearly shows migration to e-commerce as a preference over brick and mortar stores for these and other items.

It is a bit early to see where all this will end up. Traditional stores are closing as the ones that remain open are racing to establish an e-commerce foothold, agreed Amy Rogoff Dunn, partner at Kelton Global, a consumer insights and strategy consulting firm.

“We are seeing e-commerce expanding. We are also seeing new opportunities in brick and mortar stores. It will probably take a year from now to see where things wind up,” she told the E-Commerce. Times.

Digital Workout Classes Surge

Sales for at-home fitness equipment increased dramatically. So did sales of online and digital video products. The use of live, virtual, and on-demand exercise programs seems to be a growing outlet for consumers buying their at-home exercise gear.

“We’ve seen an increase of 2,000 percent in online bookings since the lockdown was introduced compared to the same period in 2019. It’s an incredible increase and one that proves the world is staying on top of health,” said Ollie Bailey, CEO and founder of Gymcatch in a written announcement about eBay’s fitness sales research.

The striking increase in the online purchases of gym equipment for home use is not an isolated phenomenon, according to eBay. Gym equipment sales show similar results for consumers in other countries.

eBay research chart top 10 fitness products during pandemic

This chart from eBay’s research shows the top 10 fitness products sold in the early months of the pandemic.


The trend is similar in other markets where gyms and fitness studios were or are closed because of COVID-19 related restrictions, according to eBay’s PR team in a written response provided to the E-Commerce Times by company rep Agustina Perez Derron.

“We’ve certainly seen similar patterns in France, Italy, and the UK to name a few,” the team said.

eBay expects to see a continuing residual from consumers relying on the online merchant for future sales as the pandemic dies off. But eBay does not expect that consumer buying trend to be permanent.

“We also assume the demand will return to a near pre-lockdown level once gyms across the country will open again. This is actually something that we are starting to see happening already,” the eBay team added.

Piggyback Results

ACI Worldwide released sales data it compiled from its own worldwide merchant base in its own report on July 14. That report shows a 117 percent spike in athletic equipment. The report also shows a continuing spike in all global e-commerce sales for June 2020 compared to last June.

That increase is the largest year-over-year increase in sales since COVID-19 restrictions were put in place in March. The analysis by ACI of hundreds of millions of e-commerce transactions from global merchants included a large increase in athletic, footwear, and sporting goods sales.

Outdoor equipment was among the most popular purchase categories according to ACI. Personal protective equipment and DIY items also continued to be among the commodities most-shopped online last month.

The results of ACI’s sales analysis reinforce what eBay found on the peak consumer interest in buying athletic equipment. That research shows a trend toward continued increases in the sportswear and athletic products sector month-over-month since COVID-19 restrictions were put in place.

“In April, we saw a big jump [114 percent] in the sector followed by a bigger increase [216 percent] in May. In June we saw it dip slightly, but still, a significant increase [117 percent],” Erika Dietrich, vice president of Global Fraud Prevention Risk Services at ACI Worldwide, told the E-Commerce Times.

Summer Sales Expectations

The consumer trend for buying athletic equipment online for home use is not showing signs of abating, according to ACI’s sales analysis.

“We are still seeing sales of health and gym equipment increase in June as the pandemic restrictions ease up. In particular, as the easing of restrictions coincides with the summer holiday season, we’ve seen outdoor equipment become the most popular of purchase categories, with an increase of 10 percent in June compared to an eight percent increase in May,” Dietrich noted from ACI’s findings.

Additionally, even with the loosening of pandemic restrictions, numerous merchants are seeing a higher percentage of outdoor goods being purchased as compared to this time last year, added Debbie Guerra, executive vice president at ACI Worldwide.

Part of the Big E-Commerce Picture

The large online sales increase for gym and sports equipment in recent months is not an isolated event, according to marketing researchers. It reflects a growing trend to rely on e-commerce as the primary shopping path.

“The pandemic has changed consumer behavior, and we expect that many of these consumers won’t be going back to the way things were,” said ACI’s Dietrich.

The growth rates in online shopping seen across various sectors reflect how people around the world have been adapting to life in quarantine, she noted. Increases in other areas like outdoor equipment and sports took over consumer spending.

“Millions of consumers are now used to getting groceries and many other essential items delivered to their doors, and consumers who were reliant on cash before the crisis have switched to digital payment methods for safety and convenience,” Dietrich concluded.



Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

Source: http://www.ecommercetimes.com/story/86762.html?rss=1

Ecommerce

3dcart Helps Online Businesses Expand with Globalshopex’s Free…

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“We see GlobalShopex as a valuable solution for online business owners to expand into international sales without drastically increasing their expenses or workload.” — Gonzalo Gil, 3dcart CEO

3dcart, a leading eCommerce software provider, announced today that they are partnering up with GlobalShopex for an easy-to-integrate international checkout system. The new system comprises a logistics solution for US-based online retail operators, providing cost-effective solutions for retailers to enter the international eCommerce market. GlobalShopex integrations allow international customers to seamlessly check out and ship worldwide.

GlobalShopex handles everything from fraud screening to duties and tax calculation. By consolidating shipments and optimizing couriers based on region and country, GlobalShopex is able to offer the lowest shipping rates. In addition, GlobalShopex accepts international credit cards and local payment forms, identifies international restrictions and country rules and regulations, provides multi-language customer support, and handles returns.

“We are thrilled to partner with 3dcart. GlobalShopex always offers all of its extensions free of charge allowing merchants to start selling internationally to over 200 countries and territories quickly, easily and with no risk. 3dcart merchants will be able to increase cross-border conversions and international sales by taking advantage of GlobalShopex features which enable international customers to shop in their home currency, pay all duties and taxes up front, while utilizing their favored payment methods,” added Raimundo Martinez, GlobalShopex CEO.

“At 3dcart, we’re always looking for the best tools to give online merchants an advantage,” said Gonzalo Gil, 3dcart CEO. “We see GlobalShopex as a valuable solution for online business owners to expand into international sales without drastically increasing their expenses or workload.”

GlobalShopex features include: Localized checkout experience for international customers buying from US businesses, currency conversion, total landed costs, international payment processing, customs clearance and brokerage, global shipping with tracking, reverse logistics/returns and fraud screening, and international customer support.

For more information about 3dcart’s partnership with GlobalShopex, request a demo here.

About GlobalShopex

GlobalShopex is committed to growing as a leader in the international eCommerce and logistics industry by offering and optimizing international eCommerce solutions for USA retailers. Our passion is to enable merchants to expand internationally with ease and to grow their international sales. GlobalShopex was born out of eShopex, an established international freight forwarding company that opened doors in 1999. Currently, hundreds of USA merchants work with GlobalShopex as their international solutions provider.

About 3dcart
3dcart (https://www.3dcart.com), located in Tamarac, Florida, is the most SEO-friendly eCommerce platform for retailers and internet marketers to grow their online stores’ traffic and sales. 3dcart includes 24×7 Technical Support, 100+ Mobile-Ready Themes, order management software, built-in blog, email marketing tools and more. Since 1997, the company has been a leader in the eCommerce market, building online stores for businesses of all sizes. Today, 3dcart is Visa PCI Certified and a Google Partner.

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Source: https://www.prweb.com/releases/3dcart_helps_online_businesses_expand_with_globalshopex_s_free_international_fulfillment_solution/prweb17296551.htm

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Share Customer Data Anonymously to Combat Fraud

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Ecommerce fraud prevention depends on good data. That data can come from payment card providers, credit bureaus, address listings, and, more recently, other merchants.

A few years ago, a shoplifter stole products at a D&B Supply store in Caldwell, Idaho. Then a couple of days later, he robbed the chain’s store in Meridian, Idaho, some 20 miles away. The retailer’s vice president of operations notified several of the other large retailers in the area, sharing surveillance images of the thief and details of each crime.

The local Fred Meyer grocery store was hit next. It shared what it learned, and before long, a network of retailers was able to provide police with a complete picture of the crook, including the make of this car and a license plate number. An arrest followed.

In this example, a few stores shared information about a criminal and, by so doing, helped to protect their local community. What if ecommerce merchants could also share customer actions and, thereby, reduce the risk of ecommerce fraud?

Trusted Transactions

“One of the things I have realized working in this domain for so many years … is the advantages and disadvantages of artificial intelligence and machine learning and, also, the reliance on having good data sources,” said Uri Arad, vice president of product and research and co-founder of Identiq, which provides a peer-to-peer trust network for retailers and other consumer-facing businesses.

That so much of modern ecommerce fraud prevention is dependent on data and patterns of data “is especially important when you have to manage risk against an unknown,” Arad said. “An unknown may be a user that you haven’t seen before, a credit card that you haven’t seen before, or a significant change in behavior. So all of those things introduce new patterns and new data.”

“Combined with the increasing sophistication on the side of the bad guys … telling good from bad is becoming a harder problem to solve,” Arad continued.

For card-not-present transactions, telling a good customer from a bad one is becoming more difficult.

For card-not-present transactions, telling a good customer from a bad one is becoming more difficult. Photo: Bermix Studio.

Solving this problem is important because trusted transactions are a linchpin of ecommerce retailing.

The customer has to trust that the merchant has accurately described and presented the product and that the company will ship that product as promised.

The merchant has to trust that the customer is a genuine buyer presenting his own payment card information and not planning fraud.

Many merchants use fraud prevention tools to sort out safe and trustworthy transactions from questionable ones.

Introducing Friction

When a mid-sized or enterprise ecommerce business encounters a new customer, a customer whose information has changed, or a shopper exhibiting new behaviors, that merchant will often introduce friction into the transaction.

This friction may take one or many forms. Some of these steps will be invisible to customers. Others will impact the shopping experience or even kill the transaction.

For example, many automated fraud-prevention tools will respond to the sorts of unknowns Arad described in one of three ways.

  • Decline the transaction.
  • Hold the transaction.
  • Flag the transaction.

In the two latter cases — hold or flag — someone at the merchant will take manual action, such as reviewing the order or calling the customer to verify.

But the first case — declining the transaction — may be the most damaging when it is wrong, as the merchant would be turning away a real, trustworthy customer. It’s called a “false positive.”

“False positives are a result of the inability to properly quantify the level of fraud risk in a transaction. The true results of false positives can be tough to measure, but lost sales are a direct impact,” wrote the authors of an ebook, “The Silent Sales Killer: False Positives,” from Kount, a leading fraud-prevention provider.

“Too often, false positives go unnoticed as online businesses perceive them as successfully thwarted fraud instead of foregone sales. Yet false positives harm online businesses financially in four fundamental ways,” the ebook continued.

  • Immediate revenue loss. Every order wrongly turned down is revenue not realized.”
  • Lost customer lifetime value. Lifetime customer value is the total profit anticipated from all future purchases by a customer. Legitimate customers who are wrongly rejected will often stop buying from that merchant permanently.”
  • Wasted acquisition spend.” All of your company’s marketing and advertising is wasted on a false positive.
  • Degraded brand image. In today’s connected world of social media and viral posts, one shopper’s experience with a false positive can suddenly reach thousands of customers and potential customers. While difficult to quantify, the impact of negative publicity is nonetheless real.”

Various Approaches

Fraud prevention businesses take different approaches to address actual card-not-present fraud and avoid revenue-damaging false positives.

Many use artificial intelligence, which is software with algorithms and pattern recognition to accomplish a task that would usually require humans. But Identiq is noteworthy for its peer-to-peer approach.

When an Identiq member, a company with millions of customers, encounters a new buyer, it can ask other members on the network about their experience with the shopper, if any. This is done anonymously so that each individual’s privacy is protected in accordance with the General Data Protection Regulation in the European Union and the California Consumer Privacy Act.

The idea is that while a new customer may be unknown to a specific merchant, another retailer or a popular paid app has likely experienced that same shopper.

Just about every fraud prevention software provider and financial institution is trying to improve ecommerce fraud detection while avoiding false positives. As Arad said, in the end, it depends on the data. Thus sharing customer experiences could help all participating merchants.

Source: https://www.practicalecommerce.com/share-customer-data-anonymously-to-combat-fraud

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Is Apple Entering the Payment Acceptance Business?

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In July, Apple acquired Mobeewave, a relatively unknown payments-technology startup in Montreal, Canada for, reportedly, $100 million. For nine years, Mobeewave has been developing technology to convert conventional smartphones into payment-accepting devices without requiring additional hardware components.

What may seem to be just another acquisition for Apple could have broad implications for the payments industry.

Mobeewave enables smartphones to be payment-accepting devices without additional hardware components.

Mobeewave enables smartphones to be payment-accepting devices without additional hardware components.

mPOS

Before digging into the Mobeewave acquisition and how it threatens the status quo enjoyed by Square and others, some background on mobile point-of-sale (mPOS) is useful.

The “Great Recession” of 2008 prompted many merchants and the entire payments industry to find a better way of serving customers.

Ecommerce had made huge gains by providing improved service, better prices, and unprecedented convenience. Brick-and-mortar stores had to react. One of the industry’s responses was mobile points of sale — the ability for merchants to leave the front checkout counter and accept credit and debit card payments throughout the store.

Around this time, Square, with its card reader that easily plugged into a smartphone’s headphone jack, made big strides. By allowing merchants to accept payments from anywhere, Square profoundly changed the payments industry. It wasn’t long before others, such as Clover, improved on Square’s offering with mPOS services that supported chip-and-PIN and contactless tap-to-pay.

Traditional acquirers and payment processors were slow to respond to this massive shift in the small-to-midsize business segment. Eventually, the leading processors either developed their own mobile point-of-sale products or partnered with one or more mPOS providers. This is where the industry stands today.

Evolution of mPOS

For all of the interesting use cases and convenience that mPOS provides, it does have one major fault: separate hardware is required. Merchants can accept card payments on their phones and tablets only if a card reader or a card-reading PIN-pad is connected either wirelessly via Bluetooth or physically with a dongle, cable, or plug.

Carrying and connecting a small card reader or a mini PIN-pad isn’t horrible, but it certainly reduces the convenience. All of this hardware must be charged, maintained, and secured. Worst of all, it’s often expensive.

Several startups — Mobeewave was foremost — understood that mPOS is more viable without all the cumbersome dongles, readers, and PIN-pad attachments.

Unfortunately for Mobeewave (but fortunate for the traditional players), the separate hardware was necessary. That’s because Visa, Mastercard, and the other card brands allowed mobile payment transactions only if the hardware was certified (for security) by organizations such as PCI Security Standards Council and EMVco.

And PCI and EMVco correctly understood that transmitting credit card details through a smartphone alone was not secure and, thus, could not be certified.

New Technology, Certifications

New technology and certification standards arose in roughly 2018 to overcome the security challenges of passing credit card data through smartphones. While the acronyms are seemingly impossible to decipher, the underlying benefits are clear.

  • TEE (Trusted Execution Environment). An extremely secure area of memory in a smartphone that protects credit card details without the need for separate hardware. Mobeewave’s phone-only mPOS solution relies on TEE.
  • EMVco. A private organization comprised of representatives from Visa, Mastercard, American Express, Discover, JCB, and China UnionPay. EMV is the acronym for Europay, Mastercard, and Visa — the founders and original members of EMVco. EMV creates and maintains rules and regulations for chip-and-PIN, contactless, and electronic payments.
  • PCI SSC (Payment Card Industry Security Standards Council). The independent organization that works with EMVCo to create, maintain, test, and certify a wide range of electronic payment services, including mPOS.
  • COTS (Commercial Off-the-shelf). A fancy way of saying “a smartphone or tablet that was purchased from a store,” as opposed to buying a traditional card reader and PIN-pad from a factory (typically operated by an acquirer).
  • CPoC (Contactless Payments on a Commercial Off-the-shelf Device). A new standard and certification program from the Payment Card Industry Security Standards Council that outlines the rules for allowing tap-to-pay payments directly on smartphones with near field communication (NFC) capability. Mobeewave became a viable business as soon as this standard was released.
  • SPoC (Software Payments on COTS). Similar to CPoC, this standard covers PIN entry directly on the phone wherein customers can type their PIN directly on the phone’s glass touchscreen.

Mobeewave

The new technology and standards gave Mobeewave and a few other startups the opportunity they needed.

The startups recognized that attaching card-reading hardware and PIN-pads to phones is a burden for most merchants. Mobeewave solved the technical problem of attachment-free mPOS a long time ago. However, Mobeewave’s solution was never fully certified by PCI and EMV, thereby making the solution attractive but unusable except in demos and laboratories.

Once TEEs (secure areas of memory in the phone) became prevalent in modern smartphones — and as soon as PCI released the CPoC specifications — Mobeewave became a market-ready mPOS product.

Indeed, in October 2019, Samsung and Mobeewave announced a partnership and a service called Samsung POS, which allowed merchants to accept tap-to-pay payments on Samsung tablets and phones — without cables, dongles, or other hardware. The partnership, which was limited to Canadian merchants, generated more than 10,000 downloads of the Samsung POS app.

Square would have surely been aware of the Samsung POS pilot but likely didn’t feel threatened. Until now.

Apple Acquires Mobeewave

When Apple announced that it had acquired Mobeewave, a shockwave rippled through the payments industry. Suddenly, this small Canadian startup, with a compelling but poorly marketed mPOS product, could threaten established point-of-sale manufacturers, mPOS providers, and merchant acquirers.

Here’s why.

  • The proliferation of TEEs in Apple phones and tablets. Unlike Samsung and other Android phone manufacturers, Apple controls and builds the hardware and software that power its phones. Apple has the resources (financial and human) to build strong TEEs on its phones. Over time, the proliferation of Apple TEEs on Apple devices will presumably get better at handling, storing, and transmitting credit card data. Very few companies can secure an entire payments ecosystem. Apple can, and relatively easily.
  • Worldwide popularity. Despite their hefty price tag, iPhones and iPads are popular worldwide. Apple can leverage the iPhones and iPads that many merchants are using or planning to purchase. Adding an out-of-the-box payments-accepting service along with a potential point-of-sale app would be simple for Apple now that it has acquired Mobeewave. An Apple POS or mPOS application would be another reason for merchants to buy Apple products.
  • Marketing power. Traditional acquirers and providers of POS and mPOS systems do not have the marketing arsenal of Apple. With its seemingly unlimited marketing budget, Apple could out-spend other industry players — banks, processors, acquirers, and even hardware manufacturers (such as Ingenico and Verifone).
  • Experience. Apple has invested heavily in payments-related products, notably Apple Pay and the relatively new Apple Card (a partnership with Goldman Sachs and Mastercard). The triumvirate of a payment product (Apple Pay), a payment card (Apple Card), and now, a payments-accepting app could push Apple to a leadership position in the payments industry. Many commentators feel that Apple has already achieved this status.

Companies that are likely threatened by Apple’s acquisition of Mobeewave include:

  • Square and its competitors. Square, Clover, iZettle, ShopKeep, Lightspeed, and Shopify POS should feel threatened. If Apple offered a free or low-cost, feature-rich mPOS that works on iPhones and iPads without the external hardware attachments, one would expect many merchants to leave Square. Pricing, ease of use, security, and support will be the key differentiators among the competing services.
  • Acquirers and payment processors, especially those acquirers that have partnered with mPOS providers such as Clover. Apple can use its power to reduce fees and improve merchant account services. Many merchants consider their processors and acquirers as necessary evils; many would leave if there were better alternatives. This is especially true for small-and-midsize businesses, which are Mobeewave’s primary target market.
  • Point of sale manufacturers such as Ingenico and Verifone provide equipment for merchants of all sizes. Typically, acquirers and ISOs (independent sales organizations, also called merchant account providers) purchase PIN-pads and payment terminals from Verifone and Ingenico and then add custom software before renting or selling this equipment to merchants. Merchants that use iPhones, instead, are a threat to these hardware manufacturers.
  • Peer-to-peer payment services such as PayPal, Venmo, and Square Cash. Apple could create its own P2P payment service using Mobeewave’s technology. Rather than using PayPal, Venmo, or Square Cash to send funds to a friend, consumers could use an iPhone to accept a quick credit-card tap-to-pay payment. This presumes Apple can overcome the challenge of interchange and credit card fees.

Source: https://www.practicalecommerce.com/is-apple-entering-the-payment-acceptance-business

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