The era of considering a top-notch CX as an optional luxury has long since passed — now, it’s a necessity for any digital business trying to thrive in this competitive market. Recent studies affirm this shift, highlighting how customers are willing to pay a premium for brands that offer enriching and valued experiences throughout their digital interactions.
Despite the acknowledged significance of CX, customer friction continues to be a detrimental factor for many eCommerce implementations. This friction often results in shopping cart abandonment, customer attrition, and loss of revenue. Cart abandonment rates, for example, range from 55-80% which translates into billions of dollars in lost sales.
Interestingly, one of the primary contributors to this friction pertains to the steps of account creation and sign-in — specifically, the inconvenience and security risks associated with passwords. As digital consumers, the frustration associated with remembering and managing passwords across countless services is a well-known annoyance. To exemplify this issue, a survey conducted by the FIDO Alliance found that 58% of respondents abandoned purchases due to password management difficulties.
From a security standpoint, passwords also present significant risks, contributing to over 80% of web application breaches according to Verizon's report. With this in mind, the need for a reliable, user-friendly, and secure alternative is critical.
Passkeys hailed as a transformative innovation in authentication, are poised to replace traditional passwords, enabling swift, secure, and user-friendly sign-ins across all user devices. Modeled after the biometric authentication methods we already use to unlock our devices like Touch ID and Face ID, passkeys are also strong and resistant to phishing attempts.
Leveraging the widespread support from industry giants such as Apple, Google, and Microsoft, passkeys are already available on billions of devices worldwide. These entities collaborate under the umbrella of the FIDO Alliance, a global industry association aimed at promoting authentication standards.
By integrating passkeys into their websites, eCommerce businesses can greatly simplify the account registration and sign-in processes. The convergence of convenience and accessibility positions passkeys as a catalyst for an elevated customer experience. In fact, businesses have already seen passkeys reduce sign-in times by half and boost the sign-in success rate from 80% to 98%.
The advantages of passkeys, however, extend beyond the customer's perspective. For eCommerce businesses, passkeys can lead to a reduction in abandonment rates, improvement in lifetime customer value (LTV), and overall enhancement in platform security.
By thwarting large-scale hacking attempts, passkeys minimize the risks associated with account takeovers and phishing attacks. Moreover, they eliminate the need for SMS-based OTPs and decrease customer service complaints due to account lockouts, thereby reducing operational costs and improving efficiency.
Adopters of passkeys will likely gain a first-mover advantage over their competitors, boosting their brand recognition and customer loyalty. Given the trend of high-profile digital brands embracing passkeys — most recently Google Accounts — it’s apparent that this technology is set to become the future norm in eCommerce authentication.
In summary, passkeys represent a promising shift away from traditional passwords, aiming to transform the eCommerce customer experience with a more secure, efficient, and seamless process for account sign-ups and sign-ins. Businesses that embrace passkeys can alleviate customer friction, elevate LTV and bolster their security measures.
As such, passkeys are primed to reshape the eCommerce landscape and redefine how digital businesses interact with their customers.
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