Biometric technologies have simply boomed in the past few decades. Their applications have spread throughout many industries and landed in the hands of the majority of consumers in the form of facial recognition unlocking in smartphones. In this mobile space, there is a growing demand and opportunity for consumers to utilize the convenience and security of biometric authentication for other services like retail purchases.
Since the direction of retailers and business-to-consumer companies is largely intertwined with the expectations of customers, biometric applications are now at the forefront of development in the retail industry. They have direct benefits in e-commerce and brick-and-mortar settings and hold a lot of potential within the shopping industry. This article will examine specifically how biometric authentication applications are transforming the retail sector for both customers and retailers today.
About Biometric Authentication
Biometric authentication is the process of verifying identity by comparing unique human biological characteristics. These characteristics, or biometrics, can include fingerprints, voice recognition, facial features, ear shape, vein/vascular structure, DNA, or behavioral traits like gait or typing patterns. Once collected, these biometric data points can be stored for comparison to later authenticate a person’s identity.
After emerging in the 1960s, throughout its brief history, biometric technology has made sweeping impacts on the public and private sectors. The FBI funded and prototyped the first fingerprint scanners in the 1970s and the Department of Defense later funded emerging facial recognition technology in the 1990s. By the early 2000s, biometrics were firmly embedded in national immigration and security procedures. Today, after the catalyst of Apple launching touch authentication in their smartphones, private consumers readily use biometric authentication daily.
With its increasing applications and general acceptance, biometric technology is on track to become a multibillion-dollar market. The healthcare, banking, hospitality, travel, and payment processing industries have particularly embraced the future of biometric applications in recent years to quickly verify patient or customer identities. Considering these recent trends, the retail sector is nearly certain to be the next big market shaped by biometric authentication.
Benefits of Biometric Authentication for Customers
In the retail sector, biometric authentication is transforming the shopping experience for customers by adding to their convenience and security while purchasing. In 2020 the National Retail Federation confirmed that over 83 percent of shoppers believed convenience was more important to them now than it was five years ago. In this way, shoppers are looking to save time and find simple, straightforward solutions to their purchasing needs.
Biometric authentication can deliver this convenience to customers by eliminating unnecessary verification efforts—particularly while online shopping. In other words, it reduces the friction experienced by legitimate users when authenticating themselves. Specifically, biometric authentication serves as an alternative to keeping track of countless passwords, account logins, or dual authentication passcodes which makes shopping simpler for customers.
Biometric authentication can also benefit customers through additional payment security. One way businesses are taking advantage of biometric authentication is by providing biometric payment options to their customers. This means customers can streamline their transactions by opting to input their biometric information into a program that will allow them to checkout using a fingerprint or facial recognition software. This type of verification eliminates the stress of having card information lost or stolen and generally makes payments more secure for shoppers.
Benefits of Biometric Authentication for Retailers
Biometric authentication holds a lot of potential for retailers as well. Generally, it can be utilized in different applications to increase the efficiency and accuracy of a wide array of standard business processes. This efficiency not only benefits end customers and employees but also increases a retailer’s profit potential.
Practically, biometric authentication can help retailers streamline their employee management. For instance, biometric identification can be used to compare new hires with criminal databases to ensure a safe working environment. Also, biometrics can be utilized in time clocks to ensure a smooth clock-in and out process for employees, which serves to eliminate accidental or intentional time theft as well. These applications and more increase efficiency in retail management.
Another way biometric authentication can benefit retailers is by reducing return fraud. This type of fraud involves claiming a refund or reimbursement that was not legitimately owed. The first way retailers can combat this issue is by writing an effective return and refund policy. A proper policy sets up the conditions for which a good can be returned, the timeframe it can be returned or exchanged, as well as the financial responsibilities of the retailer during the process. Once this is established, biometrics can be integrated to safeguard the return process by confirming the legitimate ownership of goods before the refund process begins, thereby saving retailers thousands in undue refunds.
Potential Drawbacks and Solutions to Biometrics in Retail
Biometric authentication is a relatively new technology that has become especially prevalent in only the last few decades. As such, there are a lot of unexplored applications and vulnerabilities to this technology. In this way, both customers and retailers should be extra considerate of the risks of utilizing this technology for shopping.
The most notable drawback to biometric authentication in retail is the issue of privacy. In a 2023 press release, the Federal Trade Commission (FTC) issued a warning to businesses about misusing biometric information and the harm it could cause to consumers. Essentially failing to properly handle consumer biometric data is a very real liability for both customers and retail businesses.
A solution to this issue of privacy is for retailers to properly manage and store biometric data. Retailers are responsible for doing their due diligence to properly assess data risks in their policies and systems, as well as to properly train employees who interact with biometric data. Another solution to the issue of privacy is for customers to take extra care in reading and consenting to biometric policies. In the end, taking an active, ongoing approach to biometric security is the best practice for both retailers and their customers.
Conclusion
To conclude, biometrics and the implementation of biometric authentication have had a widespread impact on many different industry sectors since their emergence in the 1960s. Within the last few decades, in particular, general consumers have become accustomed to using biometrics in their daily lives. This presents a unique demand and opportunity for more biometric applications in the retail shopping space.
As discussed, biometric authentication presents convenience and security benefits for customers and it has process efficiency benefits to retail companies. These benefits and more make biometric technologies highly favorable for the shopping experience. However, within this innovation are the added risks of new biometric data vulnerabilities which should be considered by both customers and retailers.
Overall, biometric authentication technologies have already started transforming the retail shopping experience, and with the right amount of vigilance will continue to benefit both customers and retailers for years to come.
