Hype Sales and Bad Bots Are Trending: Is Your Brand Ready?
Guest Blog: Oz Hirshfeld, E-commerce Solutions Engineer, PerimeterX
Hype sales are a great way for e-commerce brands to increase revenue, garner publicity, build customer loyalty and even sell accessory products that complement or add value to the featured sale item. Hype sales typically are highlighted in social media campaigns, which get consumers engaged and excited because they’re an opportunity to acquire speciality items that are in high demand but in low supply. Snagging hype sale merchandise is a victory for the consumer, and a satisfied customer is a win for the retailer.
But legitimate customers aren’t the only ones who get excited about hype sales. Bot operators see them as big opportunities for profit. If scalping bots can buy up all the inventory before human customers have a chance, bot operators can resell the desired products at a premium on a quickly expanding secondary market to the same disappointed consumers they beat out on sale day. This is frustrating for consumers, a bad look for brands but completely legal for bot operators.
Scalping bot traffic doubles
E-commerce brands might be surprised to learn just how prevalent bot traffic is during hype sales. The PerimeterX Automated Fraud Benchmark Report reveals that scalping bot traffic nearly doubled during speciality sneaker sales from 2020 to 2021. And overall, scalping bots accounted for up to 71% of high demand product traffic in 2021, up from 46.87% in 2020.
Adding to the problem, fraudsters use different types of bots for different reasons. Some bots monitor e-commerce sites and alert operators when high demand items drop, while others are used only for making purchases. There are even hybrid-bots that are partially automated but rely on human interaction to pass reCAPTCHA tests. The systems have become sophisticated because the rewards are lucrative.
But no matter what their function is, scalping bots favour high demand products; the data shows that scalping attacks against hot products were four times more common than the industry average. But these days, hot products go far beyond sneakers and event tickets.
Current supply chains are breaking down across all verticals and transportation costs are increasing due to rising gas prices; as a result, certain products are more difficult to find in stores, causing demand to skyrocket. Given this reality, electronics, purses, toys, cosmetics and streetwear are all candidates for hype sales.
Hype sales on the rise
The market always responds to demand and as a result, brands are running hype sales more frequently to increase their market share and their profits. Sales that used to happen once a quarter now occur twice weekly, and brands that haven’t traditionally run hype sales at all are jumping on the bandwagon. A successful hype sale is a boon to a brand’s bottom line, but the increased prevalence of bot traffic can cause major problems. Below is a list of roadblocks that derail the benefits of a hype sale.
- Increased bot traffic can crash e-commerce sites
- Bots can buy all the inventory before human customers get a chance
- Bots don’t buy accessory products
Any of these problems can negate the time and effort that go into planning and executing a hype sale, resulting in frustrated customers, damage to brand reputation and a decrease in profits.
Making it all work
So how can brands make sure that their hype sales work as intended?
- Plan: Implement specialized rule sets just before the hype sale begins that address their site’s traffic patterns and purchase flow. Brands must also consider that “regular” customers who aren’t interested in the hype sale will also visit their site on sale day to purchase other products. It’s important that these customers have a frictionless experience outside of the big sale.
- Enforce: Hype sales protection must consider and address both human and bot interactions. Brands need advanced machine learning and behavioural analysis to stay ahead of bot-driven disruptions. But machine learning needs to be accurate enough to not block humans from making purchases or make it too difficult for them to get through the buying process. Brands should be able to dynamically determine what kinds of traffic to prioritize throughout the hype sale.
- Report: Once the hype sale is over, brands should have access to feedback on anomalous activity so that launch rules can be improved for future sales. Sales and regular traffic can be clearly delineated by SKUs by traffic type.
It can behoove brands to look outside their own IT departments for help with hype sales. Executing these sales is like planning for Black Friday and has heavy resource requirements. Complicating things further, bot mitigation relies on flagging anomalous behaviour, but user behaviour during these sales isn’t in line with normal purchasing patterns. This makes it difficult to differentiate between bots and humans on sale day. Lastly, bot operators have become savvier. They’ve learned how to blend their bots in with normal traffic with the use of botnets and avoid classic detections by exploiting API vulnerabilities such as deprecated end points.
Hype sales are a great addition to a brand’s marketing plan if they are executed properly. Implementing proven strategies for bot mitigation can ensure success on sale day by isolating and differentiating site traffic, improving customer experience and thwarting bots. Read the Hibbett Sports case study to learn how PerimeterX protects Hibbett’s hype sales from bot attacks.