Technology

Ditching Passwords And Increasing Ecommerce Conversion Rates By 54%

Andre Bourque
Andre Bourque May 17, 2017
Ditching Passwords And Increasing Ecommerce Conversion Rates By 54%

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.

This week, a new entrant appeared on Gartner’s ecommerce Magic Quadrant that you’ve probably never heard of: VTEX, a provider of a cloud-based ecommerce platform. In 2016, VTEX systems processed $1.8 billion worth of gross merchandise volume (GMV), and the company claims that its technology is 68% faster to implement, delivers a 30% boost in organic traffic and increases 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, 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

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 people can shop multiple stores without ever leaving FacebookMessenger. And many have speculated that SnapChat is rolling out its own social commerce platform. This is especially important because 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 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.

Source: CIO from IDG

Keep reading: Related stories
Technology

Harnessing AI for Ecommerce and Retail: Insights from Uri Levine and Zack Kass

In the fast-paced world of ecommerce and retail, staying ahead requires not just keeping pace with technology but…

Thalita Uba
Thalita Uba
Strategy

Decoding Composable Commerce: The Hidden Pitfalls of Unlimited Freedom

So far in our decoding composable commerce series, we’ve uncovered the revolutionary approach to digital commerce technology known…

Kristin Schepici
Kristin Schepici
Strategy

Decoding Composable Commerce: Choosing the right solution for your business

Welcome to part 2 of the Decoding Composable Commerce series. Our first article explored the transformative power of…

Kristin Schepici
Kristin Schepici
Strategy

Decoding composable commerce: Identifying the reality amidst the hype

Imagine a world where businesses have the agility to adapt rapidly, the scalability to grow exponentially, and the…

Kristin Schepici
Kristin Schepici
Institutional

VTEX is the only vendor rated top 5 for all use cases in the 2023 Gartner Critical Capabilities for Digital Commerce Report

Making a platform migration decision is hard. In a world filled with buzzwords and marketing jargon, cutting through…

Mihai Popa
Mihai Popa
Technology

The importance of a privacy policy for an ecommerce business

There are a lot of discussions these days about privacy and personal data protection laws, but how does…

Helena Frias & Renan Sancho
Helena Frias & Renan Sancho
Technology

Platform migration myth-busting: 4 things IT gets wrong

Because of its complicated nature and series of detail-oriented steps, migrating to a new ecommerce platform can be…

Gabriela Porto
Gabriela Porto
Operations

5 benefits of SaaS and a cloud commerce ecosystem

Despite the popularity of cloud computing, many established companies are still using their old-school, on-premise technologies. Unfortunately, those…

Kristin Schepici
Kristin Schepici
Technology

How to avoid common Black Friday ecommerce malfunctions

Nothing says consumerism like Black Friday. And in light of the most recent health crisis, nothing says mass…

Sorana Gheorghiade
Sorana Gheorghiade
See More