Ditching passwords and increasing ecommerce conversion rates by 54%
If you want to dominate ecommerce, focus on removing friction u2014 especially from the checkout process.
Social Marketing Fella
By Andre Bourque, CIO
According to the latest data by the U.S. 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 stores, but the ease and simplicity of ecommerce continues to fuel its growth at a much faster clip.
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, we had around 600 online stores,” says Alexandre Soncini, VTEX’s general manager for North America. “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 one month before migrating and three months after the migration,” Soncini says. “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 its patented one-click technology to its dash button to Alexa (its 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 providing thousands of clients with faster checkout options — including the elimination of passwords.
Smarter checkouts mean happier customers and higher conversion rates
The implications here are significant. Why force people 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 retailers remove the friction from the online shopping experience, they will see a significant increase in conversion rates and revenue. At the same time, they’re making customers happier — and happier customers will be more likely to return and buy more.
Creative solutions such as completely removing the password from the ecommerce process will pave the way to new and improved shopping experiences that deliver happier customers and higher profits.