Fixing Major E-Commerce Friction Points with Passwordless Authentication

The following article is a guest submission from OwnID.

E-commerce is a fiercely competitive part of the retail landscape, thanks in large part to the size and scope of an addressable market that isn’t limited by geography. There are a lot of potential customers out there, and online merchants have found innovative ways to attract their business. One important focus area in recent years has been the effort to reduce friction – that is, the extra difficulty that any user interface might present to someone trying to make a purchase. Simple fixes like adding an obvious “Add to Cart” button to a given item can help to ensure that the online shopping experience is smooth and easy for the end user, and many have raced to implement “one-click” online order tools.

Simplify Checkout and Eliminate Abandoned Carts

The most important place for e-commerce merchants to cut friction is at the online checkout. So-called “cart abandonment”, in which a prospective customer gives up on an order before completing checkout, is a serious problem: According to Baymark Institute, 69.57 percent of all online shopping carts are abandoned. For a given merchant, that equates to 70 out of every 100 potential customers—and a huge amount of unrealized sales. And while many carts are abandoned because the final price tag ends up being too high, a huge proportion of cases are the result of friction, with more than half of shoppers complaining that the checkout process is too long or too onerous.

Drop Passwords and Keep Customers Coming Back

The need to log in is a major source of frustration for these customers. This is the highest-friction challenge of the entire checkout process, often involving the need to input usernames and complex passwords alongside. Research by the FIDO Alliance has found that 58 percent of consumers have abandoned their carts due to difficulty with the login process. Fortunately, this problem has a simple solution: Passwordless login. Enabling customers to easily access their accounts through the same selfie or fingerprint scan they use to unlock their smartphone can dramatically improve the shopping experience, and FIDO’s research found that 60 percent of US consumers think that merchants offering this option care more about their customer experience. Some merchants, meanwhile, have reported revenues increases of up to 20 percent after eliminating the use of passwords.

A Returning Customer is a Familiar Customer

This approach to customer login can also help e-commerce merchants to overcome the problem of lost account history data. Across online retail, merchants use cookies to help them more easily identify returning customers, but some shoppers opt out of these cookies, and some browsers, such as Safari, automatically opt out of cookies after seven days, even if the user didn’t request it. That can hinder the online shopping experience as the user loses access to items they previously saved in their shopping cart, and the merchant loses identifying information to help personalize the customer experience. The ease of passwordless login can encourage customers to proactively identify themselves when returning to a merchant’s site, and revitalize the shopping experience.

Consumers around the world have become accustomed to using their face or fingerprint to unlock their smartphone, and it’s only becoming more common as more people come to recognize the convenience and security of this form of authentication. That’s why it delivers such an elegant passwordless solution to each of the e-commerce challenges outlined above, and why retailers like Nescafé, De’Longhi, and Mezeast have already embraced OwnID’s solution. Shopping online can and should be as easy as unlocking a smartphone.