In early 2022, a top 10 footwear brand dropped an exclusive line of sneakers. Traffic to the site soared. The sneakers sold out.
On the surface, everything went as planned. But behind the scenes, something was wrong.
Queue-it ran a post-sale audit on this sneaker drop, finding up to 97% of the activity was inorganic — clicks, visits and requests from bots designed to snatch up stock for resale at huge markups.
Of the 1.7 million visitors who tried to access the drop, less than 100,000 were playing by the rules.
Retail bot attacks like this are becoming increasingly common. Bot traffic jumped 106% year-over-year in 2021. Almost 30% of online retail traffic is now bots. 2021 saw bot traffic grow 5.5 times more than human traffic for small- to medium-sized businesses. And every day it gets harder for genuine customers to buy in-demand products directly from online retailers.
You may wonder, what’s the problem? As long as bots are paying for my products, a sale’s a sale, right?
This is a question many businesses face. While a one-off product drop or flash sale selling out fast is typically seen as a success, bots pose major risks to several key drivers of ecommerce success.
From negatively affecting customer loyalty to damaging brand reputation to skewing analytics and spiking ad spend — when you’re selling to bots, a sale’s not just a sale.
Let’s look at why.
1. Bots break down customer trust and loyalty.
Every retailer knows loyal customers are your most valuable asset. Loyal customers engage with your promotions and campaigns, spend more on your products and are more likely to recommend your brand to friends.
But few retailers realize how important fairness is for loyalty. Several ecommerce studies have found customer perceptions of fairness to be among the strongest predictors of trust and loyalty in ecommerce brands.
Bots repeatedly snatching up products meant for real customers is unequivocally unfair, and customers know it.
When sites are stripped bare by bots, it’s not the bots that get blamed — it’s you, the retailer. Bots are invisible, dispersed, unknown, so customers lay the blame on you. They complain on social media, labelling your sales as unfair and your brand as uncaring.
In one fell swoop, botted sales harm customer satisfaction, trust and loyalty. Customers don’t just lose hope in getting their hands on products — they lose hope in the idea that you’re sticking up for their best interests.
2. Bots make you miss connections with true customers.
Bots break down trust among existing loyal customers, but what about new ones?
Hyped product drops, restocks and flash sales are prime opportunities for customer acquisition. But when your stock is cleared out by bots, new customers are prohibited from participating.
Even if customers are persistent and buy your products from resellers on secondary markets, you’re still missing out on so much. You lose:
- The capacity to put customers in nurture flows and create lifetime value
- Crucial business intelligence and sales data
- The chance to deliver a superior customer experience
Worse still, for major margin-negative sales where the goal is customer acquisition, bots ensure you bleed money without reaping the benefits.
And as we saw in the top 10 sneaker brand example above, bots drive massive site traffic. For unprepared sites, that’s a recipe for a crash. And if a customer’s first experience of your brand is a crashed site, you can be sure they’re unlikely to return.
3. Bots jeopardize business contracts.
In the ticketing world, many artists require ticketing companies to use strong bot mitigation. If the ticketing company doesn’t, they simply won’t get the contract.
The retail world is seeing similar trends. For example, graphics card producer AMD sent a letter to all its retailers saying they “strongly recommend” the retailers take bot mitigation steps like CAPTCHAs, purchase limits and manual order processing.
This trend of product producers taking a stand against bots is one of many reasons retailers like Walmart, Foot Locker and Amazon are implementing bot mitigation strategies — to show producers like Sony, Microsoft and Nike that they’re fighting for fairness.
4. Bots increase operational and support costs.
As if damaging loyalty, increasing customer acquisition costs and threatening business contracts aren’t costly enough, bots spike operational costs in many other domains.
Research estimates 75% to 80% of ecommerce operational costs are negatively impacted by malicious bots. These include:
- Website infrastructure costs
- Advertising and marketing expenditure
- Customer support costs
- Checkout fraud costs
The primary methods of attack for bots are speed and volume. Their speed can cause inventory database issues, leading to overselling products. And their volume not only raises your cloud infrastructure bills, but can also easily overwhelm your site, causing slowdowns or even crashes. We saw this when Walmart released the PlayStation 5 on Black Friday. The company says it blocked more than 20 million bot attempts in the sale’s first 30 minutes. Every time the retailer updated the stock, so many bots hit that the website of America’s largest retailer crashed several times.
5. Bots create faulty analytics for decision-making.
Finally, without bot detection and mitigation, bots can severely skew important business intelligence. What follows are just three of the many types of bots and the ways they spoil your data.
Scraping bots — which scour the web for stock and deals — can give you a false sense of your site traffic. As GameStop’s former Director of International Ecommerce told the BBC, “At times, more than 60% of our traffic — across hundreds of millions of visitors a day — was bots or scrapers.”
Account creation bots — which generate accounts in bulk to execute multiple purchases at once — give a false impression of your customer base. Additionally, where customer management and email marketing systems charge according to account volumes, these bots spike costs.
Denial of inventory bots hold items in their carts and list them on secondary markets, only purchasing the product after they make a sale. These bots will only purchase items if they are certain they can resell them, so they’ll often dump unwanted stock and wreak havoc on your cart abandonment metrics.
Bots create data you can’t trust. And if you can’t trust your data, you can’t trust your decisions.
The Fight Against Bots is a Fight for Your Customers
Brands that’ve faced bots for years, such as Nike, Sony, Amazon and Walmart, know the hidden risks of bots and are doing all they can to beat them. But it’s no longer just big sneaker and electronic retailers that face bots. Bot traffic is growing across ecommerce and is impacting small and large retailers alike.
The pandemic saw bots broaden their focus, targeting high demand Christmas gifts, vaccine appointments, limited-edition brand collaborations, product drops from influencers, health and beauty products, NFTs, hyped fashion products and much more.
Resellers and bots aren’t fussy or loyal customers. Whether they’ll buy your products or not depends on one key question: can they sell them for more than you’re selling them?
While there’s no silver bullet that protects against every bot every time, there are tools available that significantly mitigate the impact of bots.
If you want to stop bots from buying up your products, advanced, multi-layered bot mitigation tools are powerful measures in your battle against bots and abuse.
As brands from Nike to Amazon to Sony to Foot Locker recognize, the fight against bots is a fight for your customers.
Niels Henrik Sodemann has been CEO and Co-founder of Queue-it since its inception in 2010. Prior to Queue-it, he had a track record of growing software companies from a small team to 100+ employee exit. Before his entry into the IT and website performance fields, Sodemann was a professional yachtsman, holding several championship titles. In his spare time, he is still a sportsman at heart and enjoys yachting, skiing, ice hockey and running.