Application Security

How Coupon Extensions Impact E-Tailers’ Holiday Revenues

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As originally published in Total Retail

Coupon Extensions

It’s Cyber Monday. A shopper arrives on your site. They want to buy a hot kitchenware item. Maybe they got to your site from an online product search or a clever ad your creative team built. They check out the product, put it into their shopping cart, and then... poof, they’re gone.

What happened? The shopper clicked on a browser extension, saw a “deal” from a competing site, and abandoned you. Of course, that deal might not actually be a good one. Shipping might not be free. The color they want might not be in stock. Recapturing them will be a challenge — if they can even find their way back to your site. Your customer acquisition costs, bounce rates and shopping cart abandonments go up. Your conversion rates go down. It’s a story of lost holiday revenue.

A Rapidly Growing Challenge for Online Retail

Browser extensions range from large coupon provider extensions like Amazon.com and Honey to small, fly-by-night extensions that can completely paper over your site with unauthorized pop-up ads of malicious origin. Coupon extensions are now a multibillion dollar, and growing, global business, as evidenced by PayPal’s $4 billion acquisition of Honey, currently the largest coupon extension provider with 18 million users.

As the coupon industry grows, so does the challenge for e-commerce sites, especially around the holidays. Coupon extensions steal your best customers away and send them to competitors, disrupt their experiences on your site, and damage your brand reputation. There are tens of thousands of these extensions available across all the major browsers. The coupon extension industry started initially as cut-and-paste sites that listed coupons for shoppers to apply at checkout. With improvements in web application functionality, the coupon lists evolved into JavaScript extensions that shoppers can add to their Chrome, Firefox or Safari browsers with a simple click. Some extensions function as price comparison engines while others scale the web for coupons to apply at checkout.

According to Aberdeen Research Group, coupon extensions can reduce e-commerce conversion rates by between 1.88 percent and 7.20 percent. Retailers may be missing out on between $100 billion and $200 billion of transactions based on global e-tail transaction estimates of $4.1 trillion.

Some of the more fly-by-night operations can transform your beautiful site into a blizzard of haphazard online ads, which are populated by content totally unrelated to the items on your site, like porn, cryptocurrency or financial scams. The content is pumped in from ad exchanges that sell cheap — and, in this case, unauthorized — real estate. Shoppers typically don’t understand what they were getting when they added the extension to their browser, and believe these ads come from you, the site owner, a belief that can really damage your brand reputation.

Cyber Monday 2020: Biggest Challenge Yet

The most active online shoppers are the ones most likely to use coupon extensions to compare offers, save money, and be notified of price drops. This will be a big challenge this holiday season when they head online to shop during what's shaping up to be the busiest online shopping day ever.

How to Manage Coupon Extensions: Detect and Block Extensions on the Client-Side

To protect your e-commerce revenue, key performance indicators and your shoppers’ experience, you need a way to manage coupon extensions. Blocking all coupons or stopping the wrong ones from activating on your shopping site will frustrate shoppers by shutting down services they want to run like webclippers for popular social sites. Any solution that you put in place needs to have customizable actions and give you, the site owner, granular control to block or allow extensions according to your business needs. The solution should be easy to deploy and work across all browsers — ideally as a single snippet of JavaScript that can be dropped into your web application template. It can’t slow down page loads or interfere with any calls for third-party JavaScript services such as shopping carts or payment engines.

An ideal solution will handle the dynamic nature of coupon extensions using machine learning that can study how the JavaScript extensions behave and then block those behaviors based on known patterns. A solution that anonymously shares data about how a coupon extension behaves, from one merchant with other merchants, using a cloud-based application that constantly updates detection algorithms would be of particular value.

By blocking bad behaviors rather than extensions themselves, your web application can focus on delivering the superior customer experience that your digital and marketing teams have crafted. The most effective way to boost your e-commerce KPIs and elevate the shopping experience for both your loyal and hard-to-acquire new customers is by making sure they can visit your site, find what they want and need, and shop freely — without distractions and interruptions. With the holidays upon us, e-commerce leaders should actively look for solutions that manage coupon extensions so they can continue to focus on driving conversions and growing their online revenue.

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