by Andre Bourque

Ditching passwords and increasing ecommerce conversion rates by 54%

Apr 28, 2017

If you want to dominate ecommerce, focus on removing friction – especially from checkout. rn

According to the latest data by the US Department of Commerce, ecommerce sales jumped 15.1% last year, while total retail sales increased by only 2.9%. Admittedly, ecommerce as a percentage of total retail sales is only 8.3%. The implication is that most people still shop in physical retail stores, but the ease and simplicity of ecommerce continues to fuel its growth at a much faster clip. 


This week, a new entrant appeared on Gartner’s ecommerce Magic Quadrant that you’ve probably never heard of: VTEX. In 2016, they processed $1.8 billion of Gross Merchandise Volume (GMV), and they claim to be 68% faster to implement, deliver a 30% boost in organic traffic and increase conversion rates by as much as 54%.

Any double-digit increase in ecommerce conversion rates is always interesting, but how they accomplish the 54% increase may actually be the beginning of a new trend: ditching the checkout password altogether.  

Removing password friction from checkout

“When we launched our password free checkout,” explained Alexandre Soncini, North America GM of VTEX, “we had around 600 online stores. They were already using our regular VTEX platform checkout process. For that sampling, they had a 28% increase in revenue … not just conversion rate.” 

“We then measured a sample of new clients migrating to VTEX and looked at their conversion rate 1 month before migrating and 3 months after the migration,” Soncini said. “We measured an average 54% increase in conversion rate for these new customers. One of the main reasons is the seamless checkout experience.”

Fortune noted that Amazon, considered the world champion in removing friction, captured a staggering 53% of all ecommerce growth last year. From their patented one-click technology to dash button to Alexa (Amazon’s artificial intelligence engine), Amazon has dominated ecommerce sales through its obsession with removing friction – especially at checkout. 

The issue has been, however, that you must build your online storefront within the Amazon-controlled playground. But, with password-free checkout, VTEX is enabling thousands of clients with faster checkout options – including the elimination of passwords. 

Smarter checkouts means happier customers & higher conversion rates

VTEX isn’t alone here. The general trend in ecommerce is about figuring out all the new and interesting ways of streamlining the shopping experience which includes bringing the store directly to customers. Engadget reported that Facebook has partnered with Shopify so that consumers can shop multiple stores without ever leaving Facebook Messenger. And many have speculated that SnapChat is rolling out its own social commerce platform. This is especially important as the majority of social media is consumed via mobile devices and often inside of mobile apps like Facebook Messenger and SnapChat.

The implications here are significant. Why force consumers out of their chat or social media platforms just to buy something? As online retailers continue to fish where the fish are, they are looking for creative ways to integrate tomorrow’s shopping experience directly into the media platforms where most people spend the majority of their time already.

The bottom line is that when you remove the friction from your online shopping experience you’re going to see a significant increase in your conversion rates and revenue. At the same time, you’re making your customers happier which means they are more likely to return to a streamlined shopping experience and buy more. Creative solutions such as removing the password altogether from the ecommerce experience will pave the way to new and improved shopping experiences that deliver happier customers and higher profits.