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Kirna Zabête is a luxury fashion boutique located in New York City’s SoHo neighborhood. Sarah Easley (nicknamed Kirna) and Beth Buccini (aka Zabête), cofounded the store 15 years ago and still select every item sold today. Their goal continues to be providing their customers with carefully curated collections of the best edit of established and emerging designers in the world.
We sat down with Eileen Shulock, VP of eCommerce at Kirna Zabête, to talk about how luxury brands can mimic the in-store customer experience online, the difficulties faced by in-house fraud management teams, and why Kirna Zabête ultimately decided to outsource its fraud operations.
What is your advice for building a strong brand that customers trust?
To build a strong brand, you need to have a unique point of view. Ecommerce fashion is incredibly competitive, so you need to have a unique point of view to attract customers. After that, you need to have consistent follow through to keep them coming back.
You need to entice customers with something that’s meaningful for them.
How do you try to optimize the online experience for your customers to make that differentiation for your brand?
People shop with Kirna Zabête for our curated selection of products. This means that our customers don’t have to go online and look through hundreds and hundreds of products to find what’s right for them. For example, we always have an edit of the must-have pieces for the season. If you like the Kirna Zabête point of view, you don’t need to spend your time looking elsewhere.
More than 50% of our sales are from repeat customers. We of course cherish our new customers, but a 50/50 balance give us confidence that we are creating loyalty with our current customers as well.
How do you ensure that the Kirna Zabête online experience matches what you provide for customers in your store?
We use the same merchandising team, right down to Kirna and Zabête selecting what items are sold, for both our online and physical stores. The same people that are physically positioning the in-store sales floor presentation are also providing the vision for our online presentation to customers.
In addition, the same team works on our marketing materials, third-party promotions, and online editorials. It’s one brain that gets everything out there. That ensures that the same story, from the same point of view, is told both in-store and online.
Can you describe some of the in-house methods you were using to combat fraud before you partnered with Riskified?
We used some key indicators such as a billing-shipping address mismatch, or looking for specific email address domains that were often indicative of fraud. Overnight shipping combined with either of those two indicators always raised concern of a fraudulent order.
In addition, we asked for credit card verification from many international shoppers. We would ask people to send proof of their identity such as a copy of their credit card or driver’s licence. All of this made doing our own screening very time intensive and very inconvenient for our customers.
What kind of problems occurred as a result of this in-house validation process?
Some people were offended. They would want to know why they have to go through this process when they had never been asked to anything like this before.
Other customers simply wouldn’t have the time to respond. When that happened we would lose a sale, even though we understood that a customer not responding wouldn’t mean that the order was fraudulent. As a result, it’s likely that they would often end up choosing to make their purchases with a competitor.
Was there a moment when fraud became a problem you felt you needed help with?
We were hit by a fraud ring targeting the luxury goods market for a significant amount in December of 2014. We approved many orders through our in-house process, only to learn later on that UPS had a new policy that allowed the shipping address to be changed after the order was shipped.
When we later got all these chargebacks, we had that new option removed. But the most frustrating thing for us was that, from our point of view, everything about the orders seemed legitimate. It wasn’t something we could catch when looking at the orders; it was beyond our control.
What did you do when you decided to start looking for a third-party solution?
We had recently retained Corra, our current eCommerce technical partner, to help manage our Magento site. When we mentioned that we rejected 10% of incoming orders following the in-house fraud review process, they informed us that a normal chargeback rate for a merchant in our vertical would actually be less than 1%. That meant we were almost certainly rejecting too many good orders. They recommended outsourcing our fraud prevention to Riskified.
What was your initial reaction to learning that you had been turning away so much potentially good business?
We were incredibly excited. I would say Riskified changed our lives.
There was always such incredible anxiety around fraud prevention. If you are declining an order, there is anxiety because you want to make sales. If you’re questioning a customer, there is anxiety for everyone in the process. Even if you are approving an order there is anxiety, because it could be fraud.
Doing fraud review yourself based on limited time and knowledge was simply not a process we should have been handling ourselves. So, we were thrilled to stop and implement Riskified instead.
You mentioned that your in-house fraud review process was time consuming. How much time would you estimate this process was taking you? What were you able to do with that time after implementing Riskified?
We spent a lot of the time verifying IP addresses, looking to see if the billing and shipping addresses matched, etc. When you add in the amount of time we used contacting the customer, asking for identification, then going through all of the documents we received to put together the order history, it would take us a total of ten minutes on average for every order.
One of the things the manual review of potential fraud caused was that we would often fall behind on adding new products onto the site. Even with extra hours being worked, our backlog grew to the point that we might have several dozen products waiting to go up onto the site. We had hired an eCommerce assistant to help with this, as well as with things like processing orders and maintaining quality customer service. Riskified freed the time that was being used on fraud review for that person to focus on these essential, revenue-driving tasks.
Kirna Zabête & Riskified
Kirna Zabête relied on an in-house manual fraud review process that created friction for customers and diverted resources away from its key business. At one point, they were declining nearly 10% of their order volume. Unfortunately, despite the high decline rates, they incurred significant chargebacks after being targeted by a fraud ring during the 2014 holiday season.
Following that experience, Kirna Zabête contacted Riskified via Magento system integrator Corra. Now that fraud management operations have been outsourced to Riskified, Kirna Zabête enjoys higher sales revenue without incurring fraud-related chargebacks. Money and time that were previously spent on combatting fraud are now invested in updating the website, improving customer service, and other tasks that are core to Kirna Zabête’s business.