How Bots Are Disrupting Consumer Buying Habits & How Brands Are Fighting Back

The most in-demand holiday gifts are out of reach to the broad demographic of Gen Z and Millennials. For years, merchants have relentlessly fought bots that have been grabbing their limited-edition gifts at the expense of sales and brand reputation. Now, retailers can compensate for lost time since US holiday retail e-commerce sales are expected to reach a record $271.58 billion for the 2024 holiday season, a 9.5% increase over 2023. If people can't buy something, that can be very frustrating—frustrating enough to change shopping behavior. Ultimately, these frustrations can foster feelings of helplessness and resentment toward the brands, intensified by the rising sophistication and prevalence of "Grinch bots" during the holiday season.

 

The most infamous characteristic of bots is that they target the most in-demand items, such as limited edition toys, newly launched gaming consoles during the holidays, or even concert tickets. High-profile moments such as the Taylor Swift tour tickets or the New Balance x Joe Freshgoods sneaker release can cause chaos when bots interfere. As a result, consumers take matters into their own hands and use bots to level the playing field and acquire the items in demand. Nearly 1 in 6 Americans, or 17%, say they have used a bot to snap up an item within the past year. This behavior is especially prevalent among younger respondents, with a quarter of bot users falling in the 18-25 age bracket.

 

Brands are trying to up their game against bot interference. Nike and Ticketmaster are just two of the companies investing in higher-end CAPTCHA systems and AI-driven fraud detection. Meanwhile, third-party technology providers like EQL are innovating in fashion and footwear release management with the analysis of extensive signals to fairly allocate products. Despite all this, the BOTS Act's goal to target scalping has very little regulatory progress to date.

 

The overwhelming majority of those affected expect the retailers, product owners, and the government to assume some degree of responsibility. 94% of online shoppers surveyed put the responsibility for action on retailers.

 

Below are ways brands can improve the product experience and fight back against bots:

 

• Light Up with Transparent Policies: Clearly define how products will be allocated and what actions will be taken to minimize bot interference. Transparency in this regard keeps customer expectations at bay and aids in developing trust.

• Better User Authentication: In addition to usual CAPTCHA systems, brands should implement biometric verification or multi-factor authentication to securely differentiate between a real user and a bot.

• Build Fairer Access: Either through queuing systems or lottery-based approaches, give consumers equal chances to buy high-demand products. This reduces the bots' advantage and creates less frustration.

• Educate Consumers: Give consumers guidelines on how to shop safely online. The more knowledgeable consumers are about the effects of bots and what your brand is doing to ensure a level playing field, the less likely they will be to use bots.

• Collaborate with Tech Experts: Continuously update and invest in sophisticated security solutions through collaboration with cyber experts. Brands need to stay ahead with evolving bot technology for a safe and level shopping experience.

• Support and Adapt Policies: Engage with legal entities and support regulations that restrain scalping and bot activity. Evolving a function to respond to an evolving legal framework might cultivate credibility and consumer trust.