Minimizing declines 8 weeks before black Friday
Part of every business cycle are peak events, points in time where the cyclical nature of all commerce has the potential to bring in, over a short amount of time, revenue that at times can equal that of an entire month. In order to be prepared to take advantage of such events, one must be perfectly poised in terms of inventory and delivery capacity and also in terms of security.
Black Friday outside the US is a perfect example of such an event, as broader alliances take action and create local events to capitalize on the global buzz, offering significant discounts. In this case we began implementing FUGU’s solution with Elias, a reputable consumer electronics dealer, whose online operation had been hurt by chargeback fraud and experienced lackluster growth.
The results of implementing FUGU are represented in the above chart, where we can see across the 8 weeks from integration revenue and the rate of declined transactions in terms of value percentage. Implementing FUGU takes an area that until integration was quite murky to Elias and brings order clarity and insight. Like many other small and medium merchants, Elias was not sure why certain transactions were declined and was mostly unaware what he could do about it. This all changed when FUGU became operational. Integration allowed for a steep fall in revenue that was declined, from a whopping average of 7% to an average of 1-2%. This is no small matter for a merchant of this size.
We were so afraid of chargebacks, we had no idea we were ruling out a lot of valid business because of it. FUGU allowed us keep control of our declines without compromising on risk
Liran Levi e-commerce manager ELIAS
The most remarkable finding in this case study is what the new found online confidence provided by FUGU revenue began increasing steadily almost doubling in four week. What happened next depended on Black Friday taking place on week 8. Before the event a slight decline can be seen as people seem to postpone purchases waiting for Black Friday deals. The week of Black Friday revenue is at least four times the average and more if compared to the period before integration. It must be noted that this did not happen before.
There was nothing particular about this Black Friday besides the integration of FUGU that allowed for the reduce declines without raising chargeback rates in any way. The key is not only in the better decision making based on better information supplied by FUGU. It also stems from the kind of confidence that is gained in the organization, knowing that risks are shored. It allowed Elias to seize the moment, accepting volumes that are highly unusual as well as some complicated deal structures with high value or volume; he would have hesitated to accept before integration.
What we see is that in a very short period of time FUGU helped turn the operation around: avoiding false positives, accepting legitimate transactions with complicated structures and focusing on what is truly important – seizing opportunities.