MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--New research from the FIDO Alliance has identified how consumer frustrations with online retail is resulting in a significant loss in sales and repeat business for U.S. retailers.
According to the FIDO Alliance’s survey, conducted with 1,000 consumers in the U.S., password frustrations are leading to abandoned carts and lost sales. 58% in the U.S. have abandoned purchases due to the difficulty of managing passwords. They cancelled these 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 40% of customers, is that they don’t want their financial information to be stored on retailers’ databases. Having to enter billing and personal data (34%) was another reason, and passwords were again a source of frustration with 28% 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 These outdated processes introduce friction into an experience that people rightfully expect to be as smooth as possible,” said Andrew Shikiar, executive director at the FIDO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 around the world.
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.
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 66% believe they are easier to use.
In addition, 60% of U.S. consumers believe retailers offering on-device authentication care more about their customer experience, 58% believe they care more about their privacy, and 61% believe they care more about their security. They are also more likely to recommend these retailers to friends and family, with 60% stating they would do so.
Young consumers (aged 18 – 24) in the United States are by far the most likely to adopt on-device biometrics, with 76% believing they are easier to use and 81% that they are quicker to use, and 66% 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.”
About the FIDO Alliance
The FIDO (Fast IDentity Online) Alliance, www.fidoalliance.org, was formed in July 2012 to address the lack of interoperability among strong authentication technologies, and remedy the problems users face with creating and remembering multiple usernames and passwords. The FIDO Alliance is changing the nature of authentication with standards for simpler, stronger authentication that define an open, scalable, interoperable set of mechanisms that reduce reliance on passwords. FIDO Authentication is stronger, private, and easier to use when authenticating to online services.