What is Customer Identity and Why Should Online Retailers Care?

As a quintessential component of e-commerce, retailers must prioritize a convenient and enjoyable digital experience for their customers. Just as an attractive window display and a clean, stocked store is important for brick-and-mortar retailers, it's equally important to provide a streamlined, enjoyable and secure experience online.

This first impression for online retailers begins at login. Historically, few businesses have paid attention to customer identity management (i.e., their log-in box), but it has become evident that retailers must put safe and simple access to online services at the forefront of their e-commerce strategy. A poor or tedious log-in experience can leave end users feeling frustrated and wanting to take their business elsewhere. In fact, a recent global customer identity survey found that 48 percent of consumers say they're frustrated by having to fill in long log-in or sign-up forms, and 83 percent of consumers have abandoned their cart or sign-up due to an arduous log-in process.

What is Customer Identity?

Customer identity and access management (CIAM) is how companies give their end users access to their digital properties as well as how they govern, collect, analyze and securely store data for those users. Sitting at the intersection of security, customer experience and analytics, CIAM plays an increasingly central role in how companies establish their digital presence  and manage their customer relationships.

For retailers, providing an easy, frictionless way for users to onboard and log in is critical for driving conversions and building customer loyalty. Take a look at well-known brands such as Lush and DICK’s Sporting Goods, which have positively transformed their log-in experiences for customers.

Why Should Online Retailers Care About Customer Identity?

Online retailers are realizing that a seamless digital experience is no longer a competitive differentiator; it’s a requirement. The ability to centralize user data on one platform can unlock multiple benefits, including:

• Scalability: An online platform must be able to both accommodate the potential millions or even billions of users, as well as be able to scale in response to anticipated events (e.g., holiday shopping) as well as unanticipated events (e.g., a pandemic).
• Customer experience: From the time shoppers arrive at your login, they want easy accessibility and to be in control over their entire experience, with the option to choose their own authentication tools — whether it’s multifactor Authentication (MFA), single sign-on (SSO), or biometrics. A brand experience should resemble a concierge desk — when user experience is overlooked, customer sales are lost.
• Security: Customer data is incredibly important to an organization, but in the wrong hands, data becomes a liability. For many organizations, the log-in box is the front line of defense against malicious attacks, such as credential stuffing. CIAM solutions offer different security log-in applications to provide customers with a robustly secure, seamless log-in experience.
• Privacy and compliance: Businesses must meet the requirements of data privacy laws like GDPR, CPRA, APPI, and LGPD. CIAM easily helps meet requirements by enabling the encryption of sensitive data, controlling access to digital resources, collecting data, and managing consent in compliance with applicable laws.

As we continue to develop a better and faster digital world, safe, personalized and simple access to online services is essential. To sustain competitive and consistent e-commerce sales, retailers must utilize advanced online solutions that place identity management at the core of their digital services. CIAM is paramount for retailers to strengthen security and improve the entire customer shopping experience, thus bolstering customer loyalty along with brand awareness and revenue.

Cassio Sampaio is senior vice president, product, at Auth0, an easy to implement, adaptable authentication and authorization platform.