Three benefits digital identity can offer retailers
Wednesday 18 May 2022
Every day, thousands of Australians need to prove eligibility or verify their identity to carry out everyday transactions and interactions. Whether it’s applying for a credit card, verifying their age or buying from a new retailer, current identity verification processes are inefficient and can deter customers.
In today’s increasingly connected societies and as digital transformation grows, so too have the needs and expectations of the customer. Customers expect consistent, immediate and seamless retail experiences — online, in store and through mobile apps. Retailers must be at the forefront of transforming the way they operate, to meet these demands while providing a personalised, secure customer experience at every point of interaction.
The good news is that by providing a frictionless experience for users, digital identity can sit at the centre of how retailers can unlock efficiencies, allowing them to focus on the other areas within their business that will deliver the greatest value.
We’re already seeing digital identity used to streamline everyday experiences, but its future potential is almost limitless. Day-to-day, it could be used to create better and more-secure experiences for everything from buying a product, unlocking a loyalty program, to stepping into the new wave of retail.
For example, improving the sign-up process for new customers can help increase conversions, reduce cart abandonment, and encourage more online self-service – reducing the cost of service across all channels.
Mastercard believes user-centric digital identity can deliver retailers a strategic, financial and tech edge, through investing in personalised, connected, and secure digital experiences that differentiate, increase acquisition rates and drive down identity-related fraud. Here’s how.
1. A frictionless, fast and convenient customer experience
Convenience tops the list of the benefits of digital identity. Users can leave their wallet or purse at home and use their device to verify their identity, wherever they are in the world.
Convenience is also one of the foremost reasons customers turn to online shopping. As a result, they expect every step of their journey with a retailer to be seamless, consistent and personalised, including the registration process.
From a customer point of view, long registration forms or ‘forgot my password’ processes are frustrating, often challenging, and lead to customers abandoning the process altogether. By investing in customer-centric solutions, retailers can benefit from putting users in control, helping to build trust and increase brand loyalty, particularly in a world with increasing cyberattacks.
2. Combating fraud
Identity crime continues to be one of the most common crimes in Australia, with a survey by the Australian Institute of Criminology (AIC) finding that one in four Australians have been a victim of identity crime at some point in their lives. And by 2023, the cost of identity authentication and fraud is projected to reach US$28 billion.
But the greatest risk may be the loss of trust and customers, as concerns of cybercrime and identity theft escalate. In fact, 76% of consumers name security concerns, including identity theft, as the largest obstacle preventing them from storing cards on file with online merchants.
As the number of digital interactions increases, implementing a strong identity verification process from the start, and ensuring new customers are ‘real’ customers and not bad actors, is key in preventing fraud and driving efficiencies for retailers, as well as building the consumer’s confidence and trust.
Consumers more than ever also expect control over who accesses their data, transparency over how the data will be used and assurance that their data is managed securely. Unlike traditional physical identity documents, a digital identity will only share the information necessary to make a purchase, a reduce ‘honeypots’ vulnerable to cyber attackers by keeping a consumer’s data on their device.
3. Driving customer preference and loyalty
By leveraging identity solutions, retailers can create a seamless experience for their customers across channels and therefore earn customers’ preference and loyalty, especially when 84 percent of customers say the experience a company provides is as important as the products and services themselves. Businesses that enable simpler, seamless digital identity verification will see customer satisfaction, preference, and loyalty rise.
The pandemic has accelerated digital transformation across the entire retail sector. To truly transform, retailers need to treat digital identity as a strategic capability, tightly aligned with their digital agenda that is grounded in efficiency, security and ultimately delivers a better customer experience.