As the e-commerce market continues to grow, it's important for merchants to have access to the tools and resources they need to compete and succeed. Digital identity is one such tool that is helping level the playing field for all merchants, regardless of size.
Digital identity solutions allow merchants to verify their customers' identities quickly and easily, which can help reduce fraud and increase customer trust. This, in turn, can lead to higher conversion rates and improved customer experiences. Moreover, digital identity can also help merchants meet compliance requirements and streamline their operations. With digital identity, merchants can boost their revenue by creating frictionless shopping experiences for their customers, improving customer retention with loyalty programs, and preventing fraud.
Here are four ways you can leverage the latest in digital identity technology to improve your customer’s shopping experience and increase revenue.
When making purchases from an eCommerce website, consumers expect a quick and smooth checkout experience every single time. Unfortunately, many checkout experiences are hampered by cumbersome flows that require too many keystrokes & clicks, often leading to a transaction or “cart” abandonment (when a customer places items to purchase in a virtual cart only to abandon the shopping journey altogether).
Cart abandonment, the act of a customer placing items to purchase in a virtual cart only to abandon the shopping journey altogether, is a common and expensive problem for merchants. In fact, in a single year, cart abandonment is responsible for upwards of $4.6 trillion in lost eCommerce sales. A key reason why so many customers abandon their carts is simple: while browsing and selecting items to purchase can be an enjoyable experience, entering credit card information and shipping details is a pain. Fortunately, merchants can leverage digital identity technology to make the final and most important part of the shopping journey (actually buying something) easy and quick.
Example: Amazon: Amazon’s iconic “Buy now with 1-Click” button is so successful in driving sales that it generated think-pieces from Wharton professors when its patent expired in 2017. Providing frictionless user experiences that require as few keystrokes as possible is critical.
Take a tip from Amazon’s playbook and use Prove Pre-Fill® to make purchasing an item so seamless that cart abandonment rates plummet. Prove Pre-Fill reduces the burden placed on the consumer to enter their personal information (including shipping details) by auto-filling forms with authenticated and verified data. In addition to reducing the friction in the form-filling process and lowering cart abandonment rates, Pre-Fill also mitigates identity fraud and minimizes the need for costly manual reviews.
Online retailers are uplifting revenue by establishing either a retail loyalty program or a retail membership program. Unlike retail loyalty programs, which are typically free, retail membership programs convert casual customers into loyal and passionate dues-paying “members,” who pay fees in exchange for special perks like free shipping, early access to merchandise, and exclusive sales. The most famous of these is, of course, Amazon Prime.
Example – Amazon Prime: Amazon Prime is a hugely popular program that charges customers $14.99 a month for free one-day and two-day shipping on millions of items. A recent poll found that Amazon Prime members spend “an average of 1,400 US dollars on the online shopping platform every year, compared to 600 US dollars spent by non-Prime members.” When successful, such retail membership programs “boost engagement, increase retention, and encourage brand advocacy.” The highly regarded loyalty program of Sephora, which boasts 17 million members in North America, contributes to 80% of the company’s sales.
While the benefits of such programs are clear, converting a 1-time customer into a member is no easy task because it requires the customer to provide extra information (email, shipping address, name, DOB, etc.) at checkout. With Prove Pre-Fill®, merchants can onboard customers into loyalty programs quickly and painlessly. Unlike traditional onboarding flows that require a customer to fill out a form with personal information, Prove Pre-fill reverses course. It uses cryptographic technology to auto-populate forms with the customer’s information from verified data sources and then requests customers to simply confirm it. This new flow drastically reduces the number of keystrokes required to fill out a form.
Let’s face it – we’ve all experienced buyer’s remorse. You know, that feeling you get when you realize you probably shouldn’t have made that impulsive purchase. Most of us, however, chalk it up to lessons learned and move on with our life. Some bad actors, however, will call up their credit card companies to dispute the charges even though they were legitimate. This type of first-party misuse can lead to disputes between the merchant, customer, and issuer that can negatively impact a merchant’s reputation and cost them big time in the form of extra fees.
By verifying the identity of the customer before when they make the purchase, however, merchants significantly reduce first-party misuse. With Prove Identity™, for instance, you can confidently verify a consumer’s identity without adding any unnecessary friction, using Prove PRO (Possession, Reputation, and Ownership), before or after the transaction is completed. This means that should a customer have buyer’s remorse down the road, you have a strongly verified identity, matching device tokens, people, and transactions.
The increasing popularity of eCommerce has posed another major challenge to merchants: the surge in card-not-present (CNP) fraud.
Remember, card-not-present (CNP) transactions are remote payments that are made without swiping, inserting, or tapping a debit or credit card on the payment terminal. Shopify offers a fairly extensive list of various CNP transactions on their blog:
CNP transactions are much more vulnerable to identity theft and spoofing than card swipes or EMV near-field payments. Studies show that fraud is 81% more likely to occur during a CNP scenario than at a point-of-sale machine.
Example – Amazon: Merchants like Amazon that sell tangible goods will lose about 2.5X the cost of the product if it “goes fraud.” Take a pair of $100 shoes, for example. If a fraudster orders a new pair of $100 shoes on a stolen Amazon account, Amazon will pay for the cost of the shoes, the cost of shipping, and the cost to reimburse the victim whose account was hacked. While Amazon has the money to chalk this $250 as simply the cost of doing business, the cost of fraud significantly impacts the financial health of smaller businesses.
Fortunately, even merchants without extensive fraud teams can leverage digital identity to prevent fraud. With Trust Score™, merchants can analyze behavioral and Phone-Centric Identity™ signals from authoritative sources at the time of a potential transaction to mitigate fraud such as SIM swap fraud and other account takeover schemes. It’s a powerful and nearly frictionless way to verify the identity of customers.
A national furniture retailer came to Prove with a big problem: their slow onboarding process was fueling cart abandonment and driving away customers.
The challenge they gave Prove: help us create an onboarding flow that still gathers all the necessary customer information (including a credit check) but makes the experience as fast and painless as possible.
By leveraging Prove’s technology, the retailer was able to achieve its goals of enhancing the onboarding experience and reducing cart abandonment. To date, their new flow has processed over 90K authentications.
In conclusion, digital identity is an essential tool for all merchants looking to succeed in the competitive world of e-commerce. By helping to reduce fraud, increase customer trust, and streamline operations, digital identity is helping to level the playing field and give all merchants the chance to realize their big dreams.
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