Authentication is More Than Just a Box to Check: It’s a Key Business Enabler for Retailers 

You've optimized your supply chain, navigated global shipping delays, curated the perfect product mix, and fine-tuned your marketing to drive traffic. Your customer has found exactly what they want, added it to their cart, and is ready to check out. Then — BAM — they hit the authentication wall. Password error. Reset email never arrives. Verification SMS lost in the ether. Cart abandoned.

This frustrating scenario plays out millions of times daily across the retail landscape, silently draining revenue while executives focus on everything but the humble login process.

The truth is, most retailers treat authentication as a mere security checkbox rather than what it truly is: a critical touchpoint in the customer journey and a powerful business enabler.

Reimagining authentication as a strategic asset rather than a technical necessity unlocks dramatic conversion improvements, strengthens security posture, and builds the frictionless experience customers now demand. Let's examine the authentication blind spots costing retailers millions, as well as how the right approach transforms login friction into competitive advantage.

Why Retailers Struggle With Authentication

For many retail companies, authentication is seen as a static feature that took great effort to set up either in-house or with the help of a vendor. Therefore, while they may be willing to experiment and refresh their technology in other areas of the business, touching authentication can feel like they’re at risk of knocking over a Jenga tower of complexities.

Additionally, some retailers have a false sense of security when it comes to their authentication strategy. For example, they may require complex passwords and multifactor authentication (MFA) methods — e.g., one-time passwords sent via SMS (OTP SMS) — believing they’re offering customers strong protection. However, cyber threats and security standards are constantly evolving.

The National Institute of Standards and Technology (NIST) recently updated its password guidelines and no longer recommends complex passwords. Furthermore, most passwords are hackable regardless: As one study revealed, 59 percent of passwords can be breached in less than an hour’s work. MFA methods like OTP SMS are not foolproof either, as they can easily be phished.

These methods provide minimal security benefits while adding substantial pain points to the user experience (UX). Consumers don’t want to worry about creating another new, complex password they’ll have to remember or hunting down their phone to enter an OTP when they’re just trying to complete a purchase. Over time, this friction quietly erodes brand loyalty. In fact, a FIDO report found that 42 percent of people have abandoned a purchase at least once in the past month because they couldn’t remember their password.

But it’s not just passwords that are creating pain for users. Frontloading information collection (e.g., requiring customers to create an account or provide other information before making a purchase) can fuel frustration and increase abandonment rates. Finally, identity silos that prevent the same customer from having a unified experience across a brand’s channels further tarnish CX.

In many cases, retailers lack visibility into the customer journey and may not even be aware of how their suboptimal authentication strategy is driving away customers and hurting sales. With the right approach, retailers can eliminate these barriers, improve CX, and strengthen security.

Here’s how:

Lower Barriers to Entry — But Not Visibility

Retailers need to focus on lowering barriers to entry to eliminate UX roadblocks and drive conversion. One important part of this is ensuring anonymous users can easily navigate their website and make purchases. However, it’s still important to have visibility into their movements in order to better serve them and increase the chance they create an account in the future.

Another critical component is making account creation as simple and streamlined as possible. Ideally, retailers should offer password-less authentication options like magic links and passkeys. Password-less authentication doesn’t just reduce friction; it bolsters security by preventing phishing attacks since it eliminates passwords as a potential attack vector.

Retail giants like Amazon.com and Walmart have successfully implemented passkeys to make account creation and login fast, easy and secure. Retailers can also use Google One Tap to let customers sign up or sign in via their existing Google account through a single “tap.” Retailers might also opt to incentivize customers to create an account by offering them special deals, discounts, and/or early access to sales.

Rethink Onboarding

Retailers must also be open to reimagining their onboarding process to support brand loyalty now and in the future. They need to take a deep look at their onboarding flow, simplify where possible, and add security controls where necessary. As noted previously, retailers should also be mindful not to frontload information collection.

To support these efforts, retailers need to build a technology stack that's flexible and can support experimentation and changes — including those related to authentication. Retail companies’ users today won’t be the same as their users tomorrow, so they should regularly re-examine their onboarding process to ensure it meets evolving consumer expectations, minimizes obstacles, and converts interest into loyalty at every step.

Create an Omnichannel User Journey

Finally, retailers need to prioritize a seamless user journey across channels. This means users should have a single identity and set of login credentials, and their experience should look the same across web, mobile and other channels. This must also extend across different sub-brands and partner organizations.

For example, a customer who logs into a retailer’s main website should be able to use the same login credentials to access the brand’s mobile app, shop seamlessly on a sister brand’s website, and even redeem loyalty points through a partner platform. The aforementioned password-less login methods are crucial for supporting federated identity by enabling a single, secure authentication process that spans channels.

From Conversion Killer to Revenue Driver

Retailers that continue treating authentication as a technical checkbox are leaving millions on the table in revenue, while their forward-thinking competitors transform this critical touchpoint into a competitive advantage. The data is clear: Every friction point in your authentication flow translates directly to abandoned carts and lost loyalty.

The retailers winning tomorrow's market share aren't just selling products; they're selling seamless experiences where authentication becomes virtually invisible to the customer, yet provides stronger security than ever before. As digital competition intensifies and customer expectations evolve, your authentication strategy isn't just a technical decision — it's a business imperative that directly impacts your bottom line.

Rishi Bhargava is co-founder of Descope, the drag-and-drop external IAM platform.