Navigating around risk in social retail

This article is provided by by BRC Associate Member, Signifyd.

__________________________​

How can retailers innovate and implement robust fraud prevention strategies to thrive in the evolving retail landscape of 2025?

2025 is set to be a key turning point for brands, as they strive to meet revenue targets amidst evolving consumer behaviours. The most recent BRC figures suggest that high street footfall was down by 2.5% year-on-year in the golden quarter, cementing the fact that physical locations can now only be one small cog in the revenue machine if retailers are looking to grow.

This shift is not necessarily due to reduced purchasing, but rather an ongoing move to other channels where shoppers can more effectively seek bargains and squeeze vital savings out of their budgets.

This dynamic is no longer a simple trade-off between retailers’ physical locations and their websites; even more purchase routes are opening, as with the growth of social selling. It’s estimated that sales via social media platforms, for instance, will reach $1.2 trillion globally by the end of 2025.

As we navigate through the year, these behaviours will only continue as consumers prioritise cost-effective shopping options. But, just as physical retail requires broader capabilities in order to be more effective, retailers will need to quickly build a mature approach for these new channels to meet shoppers where they are without losing vital sales. Crucially, with the rise in social shopping comes increased fraud risks. Retailers need to focus on robust fraud prevention strategies alongside customer experience to deliver growth through the headwinds.

From doorbuster deals to social selling

The rise of social media platforms as sales channels cannot be overstated. Beyond keeping up with the TikTok trends, around half of online shoppers were hunting for Black Friday deals on social platforms. Retailers simply can’t ignore these channels to tap into consumer wish lists. 

The appeal of social shopping is obvious: convenience, accessibility, and the ability to hyper-target audiences through personalised ads and influencers. Dual-screening while watching TV, over a family meal, or in transit provide new ways to reach cost-conscious audiences.

The darker side of retail

The rise of ecommerce came with the emergence of online retail fraud. We could speak ad nauseam about the many ways fraudsters and criminals target retailers and consumers. But when we layer social media on top of these more traditional digital channels, these threats take on a new dimension, driven by advancements in technologies like AI.

While AI can represent an opportunity for retailers, the technology is agnostic about where it is applied, meaning that fraudsters are able to rapidly scale their capabilities through large language models (LLMs), spoofing, and deepfakes. 

Two particular concerns with social media are, first, hyper-targeting audiences in ways that manipulate consumers’ trust to make them vulnerable and, second, capturing data to use against them – or retailers – later on.

Navigating personalisation and trust 

We’ve highlighted that selling on social media channels is a boon largely because of the ability to hyper-personalise content to audiences and tap into the zeitgeist of trends.

But what about when consumers know content is tailored personally to them and therefore come to trust what they’re seeing as being true. This opens the door to bad actors who could do anything from setting up fake accounts to gather buyer data, to creating deepfakes that convincingly spoof legitimate retailers.

Data is still king

The opportunity for fraudsters to capture consumer data on social channels is rife. Retailers have gone to extreme lengths – particularly in Europe – to navigate regulations like Strong Customer Authentication (SCA), which have been put in place to stop fraud but have also placed a strain on the user journey so that retailers have to work harder to ensure a smooth experience.

Ultimately, customers want to browse, choose, and pay in as few clicks as possible – something that social media provides in spades. If fraudsters can infiltrate this buyer journey, the trove of data at their fingertips could do serious damage to both consumers and retailers who often bear the brunt of fraudulent charges.

Gaining the higher ground on social

Luckily, as fast as the landscape is evolving, so are the solutions.

Although social media is still a new frontier for many, the need to balance security with customer experience remains the same. Core to this is ensuring the right technology is in place: dynamic exemption management to offset SCA, risk analysis to catch out obvious fraud attempts, and payment optimisation to seamlessly get shoppers through checkout. Retailers can then verify and approve purchases smoothly while securing consumer data and protecting a retailer’s profits. 

But having the right tech means nothing if you’re not able to use the data to your benefit. Having a fraud prevention partner in place that can tap into and make sense of this data – Signifyd’s data network for example is the largest outside Amazon – will be critical in allowing retailers to pull from trends in wider data to identify, flag, and stop fraud attempts.

When consumer interactions with retail peak, it’s critical that retailers balance customer experience with risk. Social media raises the stakes of traditional ecommerce: ensuring that consumers can trust what they’re seeing and that data is protected while the buyer journey is seamless will call for new tools and strategies.