Consumer frustrations with online retail is resulting in a significant loss in sales and repeat business for British retailers.
According to the FIDO Alliance’s survey, conducted with 1,000 consumers in the UK, password frustrations are leading to abandoned carts and lost sales. A third (66%) of UK consumers have abandoned purchases due to the difficulty of managing passwords. They cancelled transactions because they either could not remember their password or were being forced to create a new account and password to make the purchase.
The research also identified several reasons for potential loss of repeat business, as multiple factors stop people from setting up new accounts after making an initial purchase. Their chief concern cited by 37% of people is that they don’t want their financial information to be stored on retailers’ databases. Having to enter billing and personal data (31%) was another top reason, and passwords were again a source of frustration with 29% stating that having to set up and remember a new password would stop them from opening an account.
“Many common online retail practices, like setting up new passwords and accounts, are being rejected by consumers and consequently are hurting retailers’ bottom lines. These outdated processes introduce friction into an experience that people rightfully expect to be as smooth as possible,” said Andrew Shikiar, executive director at the FIDO Alliance. “While historically there has been little that merchants can do other than to be frustrated at password-related losses, that is no longer the case – and retailers need to look for new solutions to removing needless friction from online transactions or run the risk of losing customers to the competition.”
The survey also revealed on-device biometrics as an alternative to passwords that consumers prefer. This is especially true as more retailers and banks are required to implement Strong Customer Authentication to comply with emerging regulations.
According to the survey, consumers overwhelmingly prefer the retailers that enable them to log in and make transactions simpler by using their on-device biometrics, such as a fingerprint or FaceID. In the UK, 68% of consumers believe these on-device methods are quicker than using traditional two-factor authentication requiring both a password and a one-time password (OTP), and 65% believe they are easier to use.
In addition, 59% of people believe retailers offering on-device authentication care more about their customer experience, 55% believe they care more about their privacy, and 55% believe they care more about their security. They are also more likely to recommend these retailers to friends and family, with 57% stating they would do so.
Young consumers (aged 18 – 24) in the UK are by far the most likely to adopt on-device biometrics, with 81% believing they are easier to use and 77% that they are quicker to use, and 67% would recommend retailers offering on-device biometrics to friends and family.
“2020 has found more and more people fulfilling many of their needs by making a bulk of their purchases online,” added Shikiar. “Merchants especially need to make the buying experience simpler for consumers without sacrificing security. The good news is that most consumer devices today ship equipped with the technology to provide these simpler, stronger authentication methods – it is now incumbent upon retailers to take advantage of these capabilities.”
Visit my consulting website - www.ryansconsulting.com
Visit my personal website - www.holmesryan.com
Visit my Facebook - https://www.facebook.com/Ryan.Entrepreneur
About Ryan - https://www.holmesryan.com