Black Friday has become the focal point of the Christmas shopping season. From being a means by US stores to coax consumers into their shops the day after Thanksgiving, the last Friday of November has now turned into a worldwide obsession as retailers compete for the footfall and traffic with overly generous discounts and deals in order to kickstart their festive sales drives.

Far from being a publicity stunt to signal the start of Christmas shopping, Zach Aron, payments leader at Deloitte, believes the Black Friday-Cyber Monday weekend can be seen as a bellwether for the payments and commerce industries.

“What happens during this time often indicates tealeaves for how we see other changes, because you see people with bigger motivation to buy and consume,” Aron tells Finextra.

“What we’ll be doing with our clients after this weekend is look at the data and see if this is a portent of larger changes in consumer behaviour.”

This will go beyond what consumers are spending their money on and what promotions and discounts prove popular. While certain functions of the Black Friday and broader Christmas shopping period are purely seasonal, trends relating to where and how customers are browsing, buying and paying may have a broader significance.

Aron adds: “It will be interesting when we get to January and February, which of the things we’ve seen over the previous month or two are actually going to stick and become part of the overall payment experience.”

Smartphones surging

Deloitte has forecast that 2019 will be the first year in which more than 50% of shoppers use their smartphone in some capacity for festive shopping online.

Fifty-two per cent of those surveyed state they will use their smartphone in holiday shopping, compared to 40% and 46% in 2017 and 2018 respectively. Shopping on desktop computers sees a 1% decrease to 75% while tablets hold steady at 22%.

"We are seeing an increase in smartphone use for online shopping every year,” Aron says. “We don’t believe we’ve hit the plateau yet by any means.

“We’re still seeing growth in end-to-end smartphone use in purchases. But when you look at their use at some point in process, that growth is even higher.”

Banks and payment companies should then be aware of taking a broad approach to any data they are presented about consumer habits. Aron argues they should be aware that consumers’ smartphones are “fundamentally engrained in the act of shopping and buying”, and not purely a tool for transacting.

“We’re starting to look at to what extent shoppers are browsing potential purchases online to then complete in store, or browsing in store and then completing in an app on the phone.

“There could be a variety of variance and we want to understand which of these is happening most often, but either way you look at it, the smartphone’s role has definitely increased and continues to do so.”

Buyer beware

Within those consumers saying they will use their smartphone for festive shopping, some 70% state they will use it as an end-to-end shopping tool. This is double the percentage of five years ago.

This could be put down to the evolving consumer base as more and more Generation Z-ers reach adulthood. Research by Santander highlights that this brings increasing challenges of fraud awareness.

According to the analysis, 72% of Gen Z-ers and young millennials don’t check if URL are secure before carrying out purchases, while two thirds never research the company on independent review sites first.

“Any time people are looking for a bargain there is a higher risk of scams,” Santander’s head of fraud, Chris Ainsley, tells Finextra.

“That same old rule applies: if it looks too good to be true, it probably is!”

Alarmingly 74% of younger people are happy buying a high-value product without any desire to see it first to confirm that the purchase is above board. This is of particular significance at a time of year when they are more likely to be tempted with generous prices for expensive clothes or technology.

Lee Clifton, head of strategic clients at JPMorgan Merchant Services in Europe, tells Finextra of the work being carried out to mitigate the losses through such nefarious activity.

“We support merchants through machine learning tools which analyse payments data to identify fraudulent trends and variances in authorisations.

However, it is important that these tools are dynamic and take into account the fact that it is ‘normal’ to see unusual purchasing activities at sale time as consumers save up for significant purchases which would otherwise be out of character.

“Fraud never sleeps,” Clifton sums up. “Players in the space need to constantly review the performance of their fraud management strategy, threats will continue to evolve and present new challenges for all within the payments eco-system.”

Jamie Crawley, Reporter, Finextra