Buy now, pay later tactics for building better e-commerce sites
If you’re familiar with the benefits of offering buy now, pay later options on your e-commerce site, you already know they provide your customers with more options and flexibility at checkout. This, in turn, increases the likelihood that they’ll make a purchase, and that these purchases will be larger. Forty-eight percent of baby boomers report that they wouldn’t have made a purchase online without financing, while 44% of millennials report buying something more expensive than they were originally considering when financing was an option. These options can result in a 17% increase in incremental sales, plus, Bread Financial data shows that consumer financing can triple average order values.
However, there is nuance in how and when to implement buy now, pay later options on your e-commerce site. Not all verticals are created equal. We’re going to dive into the specific strategies we’ve seen work for home goods, electronics, and fashion brands.
The home space—furniture, appliances, and renovations—is one of the purchasing decisions that consumers belabor the most. Bread Financial has found that customers consider offerings from an average of 3.1 stores before buying, more than any other type of purchase. How they’ll end up paying for their purchase is a key part of this consideration as well. Seventy-eight percent of shoppers say they want to pay for home goods items in installments. Separately, 38% have a favorite furniture or appliance store, and their top reasons for shopping there are due to a wide selection of products, interest-free installments, and fast delivery.
Strategy: Use cart abandonment emails to make buy now, pay later more effective
Home goods are a hotly contested and highly considered space. Customers are looking for a cost-effective way to remodel or redecorate, and financing can be a great way to set you apart and reach more potential buyers—it makes purchases feel less daunting, and could increase sales significantly. By offering financing and partnering with Bread Financial, stores are able to offer and extend credit to a broader range of customers without making any sacrifices to their products, services, or revenue.
Behind home products, electronics is the next vertical where the demand for buy now, pay later options is highest, with 76% of shoppers saying they would prefer to pay in installments according to Bread Financial research. Millennials, in particular, are 50% more likely than older shoppers to say they would shop more at retailers that offer interest-free installments. Electronics shoppers also ranked low prices as the top reason they buy from retailers. Financing options are especially appealing to these price-sensitive customers, but how do you break through to an audience that is so heavily saturated with marketing messages?
Strategy: Fully-integrated, full-funnel buy now, pay later options
Buy now, pay later options can be a deciding factor for shoppers who prioritize price, so surfacing your financing options to have a presence throughout your site is crucial. Using Bread Financial products, brands can enhance their path to purchase by taking advantage of a full-funnel approach. With Bread Financial, customers can prequalify from anywhere on the site, not just at checkout.
Bread Financial’s research has found that offering installment payments is as or more effective at driving retail sales than recommendations by friends, short checkout lines, and advertising. Buy now, pay later options are extremely efficient within an online shopping experience, but fashion and apparel have an in-person element that can’t be ignored. Many of these brands drive a majority of their sales through their brick-and-mortar presence, and naturally customers want to try on apparel and accessories in person before they commit to paying full price. How can you reap the benefits of offering buy now, pay later options if you also rely on in-store sales?
Strategy: Offer an omnichannel POS financing solution
An in-store financing integration lets your customers discover and learn about their purchasing power while they browse, increasing the odds that they’ll make a purchase while they’re on the showroom floor, instead of waiting to return to a computer. This minimizes friction and improves brand loyalty across the brick-and-mortar shopping journey.
Finding and implementing the right buy now, pay later strategy for your e-commerce site and brand can maximize your conversions and revenue. Every industry is different, so make sure you find the best solution for your unique vertical and business model.
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