Competition in the eCommerce industry is becoming increasingly rivalled. As consumers turn to online stores, more and more retailers are making the jump themselves and pivoting towards digital. Joining such a lucrative market is a no brainer for retailers. However, competition between retailers has led to the development of shady market manipulation tactics like price-scraping.
Price-scraping is a rapidly growing problem in eCommerce. Bots powered by artificial intelligence (AI) are programmed with the express purpose of harvesting data from eCommerce sites.
Businesses and Fraudsters can then use this data to undercut their legitimate competitors’ prices and steal their audience. The effects of this goes beyond price undercutting, as price-scraping can impact retailers in multiple ways, from slowing website performance to skewing campaign metrics. To keep the playing field fair and prevent price-scraping bots from further damaging revenue, retailers need to act now.
Underhanded Tactics
Price-scraping is the process of using bots to extract pricing data for illegal competitive price monitoring. Bots will disguise themselves as legitimate traffic to carry out data scraping anonymously and without permission.
With online retail, price information on goods and services is common public knowledge. This has made the eCommerce industry particularly vulnerable to price-scraping, as bots have no barrier to entry.
Retailers can automatically adjust their prices based on those of their competitors by rapidly scraping data at high volumes. These bots have grown in popularity recently, with it even being possible to hire their services easily online.
Despite claims that price-scraping is harmless, it is in reality incredibly damaging to businesses. Some of the negative consequences are:
- Reduced Revenue: By undercutting prices, competitors can successfully steal target audiences. Customers will run to the competitor’s online store, and revenue will rapidly decrease.
- Drained Ad Budgets: Bots significantly drain advertising campaign budgets by driving up customer acquisition costs (CACs). In the process of gathering data, these bots relentlessly click on paid campaign ads. Allocated budgets are quickly exhausted from frequent clicks, and as bots have no intent to purchase, retailers lose out on profit. Juniper Research found up to 22% of global ad spend was lost to ad fraud like this.
- Skewed Metrics: Most retailers can’t distinguish between legitimate traffic and fraudulent bots. A flood of bots makes it appear a campaign is performing well, tricking retailers into optimising towards underperforming campaigns. Retailers lose out on genuine customer engagement while competitors use clean data and lower prices to gain the upper hand.
Price Scraping and Beyond: How Bots Exploit eCommerce
Bots in eCommerce have evolved far beyond simple automation, engaging in a range of deceptive and harmful practices that exploit both consumers and retailers. These malicious bots, designed for fraudulent and competitive gain, include several types that wreak havoc across online platforms:
- Reseller Bots: These bots are programmed to rapidly purchase high-demand products, such as concert tickets, limited-edition sneakers, or new electronics, before legitimate consumers can. By monopolizing stock, fraudsters resell these items at inflated prices, exploiting consumer demand and leaving genuine buyers at a disadvantage. This practice not only scams consumers but also creates significant challenges for retailers, who may face financial losses and reputational damage.
- Data Scraping Bots: These bots infiltrate websites to extract sensitive information, such as pricing, stock levels, and SEO/keyword data. Competitors use this data to undercut prices or optimize their own strategies, undermining fair competition and eroding retailers’ market positioning.
- Account Takeover Bots: Using stolen login credentials from data breaches or phishing attacks, these bots gain unauthorized access to online banking or eCommerce accounts. Once inside, fraudsters can make illicit purchases, steal personal information, or lock out legitimate users, causing significant harm to both consumers and retailers.
- Credit Card Fraud Bots: These bots exploit stolen credit card details to make fraudulent purchases on websites and payment gateways. Fraudsters use them to obtain free goods or services and to test which stolen cards remain active, leaving retailers to bear the cost of chargebacks and potential fines.
- Ad Fraud Bots: Designed to drain competitors’ advertising budgets, these bots repeatedly click on rivals’ online ads, artificially inflating cost-per-click (CPC) rates and lowering return on investment (ROI). This depletes marketing resources and distorts campaign performance metrics.
The impact of these bots is profound. Retailers face financial strain from chargebacks, as fraudsters often use stolen payment methods, leaving businesses to refund unauthorized transactions.
Beyond monetary losses, retailers risk fines, damaged brand reputation, and eroded consumer trust. Meanwhile, consumers are scammed into paying exorbitant prices for resold goods, suffer account breaches, or have their personal data misused. The pervasive threat of these sophisticated bots underscores the urgent need for robust cybersecurity measures in eCommerce.
Exposing Fraud
Fraudsters are deploying a range of malicious bots, including price-scrapers, reseller bots, and account takeover bots, to manipulate markets, steal data, and hinder legitimate retailers’ revenue. The challenge is detecting these bots before they can scrape sensitive information, commit fraud, or harm businesses.
Fraudsters have taken advantage of bots’ ability to mimic human behaviour and blend in with normal traffic to carry out large-scale attacks. However, it is possible to identify when bots are targeting your site by looking out for the tell-tale signs.
For example, abnormally high page views paired with an increased bounce rate is an indicator that bots are trying to overwhelm your site. Bots may also leave incomplete conversions and items in carts. Bots are also likely hiding behind suspicious accounts from locations your target audience wouldn’t typically be based in.
By taking an active role and regularly monitoring your traffic can help to identify these potential signs of fraud. Bots can then be blocked from the site before they have the chance to steal any data. Fraud detection tools can also combat rising CACs by identifying and filtering out bot-driven clicks. These tools can detect clicks from non-human sources like bots and block them from interacting with ad campaigns to safeguard budgets.
Preventing Market Manipulation
Price-scraping is a challenge that will only grow if left unchecked. In a competitive landscape like eCommerce, retailers can’t afford to lose out on revenue due to devious bot activity.
Bots have become more sophisticated and difficult to detect. However, if retailers take a proactive role in monitoring their traffic, they can shine a light on fraudulent bots and block them from harming budgets before the damage is done. Legitimate retailers can then ensure they’re keeping both their data and their budgets safe.
About the Author
Chad Kinlay, CMO of TrafficGuard, is a driven, open-minded, creative senior marketer with a strong sense of dedication and commitment. With over 15 years of progressive international experience in marketing and communications management, Kinlay has a credible history of commercial success. Chad can be reached at the company website https://www.trafficguard.ai
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