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With the consumer's spending increase towards the start of the year, and internet-based shopping continuing to increase across all demographic groups businesses are faced with more opportunities and competition to the consumer's dollar. It is essential to find innovative ways to cater to the demands of customers and giving them more reasons to shop the brand or website you have created. A great place to start is with the checkout processfinding opportunities to simplify this crucial last step in the sale and provide choices for customers to pay to enhance their shopping satisfaction.
One of the trends that has rapidly increased in popularity among shopping online is the "Buy Now, pay Later" (BNPL) alternative when you the checkout. BNPL is an alternative payment method that allows shoppers to split the cost of their purchase into low-cost installments which are spread out over time -sometimes for a couple of weeks while in others, it's spread over several months.
Pay later, buy now is on the rise
Many consumers are using pay-over-time services in the event that they become accessible. The year 2023 saw online retailers experienced a dramatic rise in the number of purchases that were made using BNPL and volume up 42.5 percent from year to year. As a result, BNPL put some $16.6 billion in sales onto merchant books over the course of the final couple of months of the year and this trend Adobe anticipates will last until 2024.
Around 93.3 million customers will be using BNPL in 2024 according to EMarketer and American Banker reported that the BNPL market in the US may reach as high as $8.3 billion in 2028. BNPL is being embraced increasing by the online retailers, such as Amazon.com -- which will further accelerate its growth and making the choice more familiar to consumers that buy online.
This means that BNPL an option that merchants can't ignore as they compete in a crowded online market.
Offering buy now, be paid later: Some points to take into consideration
Incorporating BNPL choices for checkouts earlier rather than later offers retailers more opportunities to attract new customers and build an ongoing relation with them.
If a retailer doesn't offer a BNPL option during check-out, this might be the perfect time to add one to the list of options. In the case of merchants that do offer it by making the BNPL option prominently displayed on their websites, specifically during checkout or by announcing its availability through marketing, could help make their brands stand out and increase customer experience clients.
The more prominent the BNPL option appears on the site of a retailer, and the sooner they promote the feature via email and social channels and the more likely that customers would be interested in learning more, which can help the retailer bring customers to their website to complete the deal.
BNPL will allow merchants to expand their appeal to customers who are looking to purchase items in the near future, but wish to handle the flow of cash without credit. By allowing the possibility of splitting the cost of a purchase into, for instance, four installments of interest-free payment every two weeks, customers have the ability to get their needs with no delay. Some BNPL service providers, including Affirm and Affirm, offer long time options that span several months up to 3 years for carts with large sizes or expensive products.
When adding a new option for payment on the backend of an online store may be a daunting task for small-scale merchants who are already working on their time There are solutions that are quick and simple application that could simplify the entire process for the retailer. In this case, they typically can take advantage of pre-built ecommerce integrations, for instance the Affirm Payments extension, to easily add BNPL options to their existing checkout experience.
The upside of offering buy now, pay later on your Woo store
What advantages can an BNPL integration bring? For one, using an integration will streamline the buying process for the ever-growing variety of shoppers who prefer to pay over time. Making sure that customers are on your website and moving towards checkout is also important, especially for younger shoppers who are accustomed to the convenience of online shopping. Indeed according to The National Retail Federation reports that almost 50% (46%) of Gen Z respondents consider a effortless checkout process to be essential to their purchasing experience.
A key aspect to think about when implementing the integration is how it will affect the customer. It's important that the customer is able to view their options for payment as well as go through the process of approval without being required to navigate to a different website. With an integrated system, retailers can make the procedure as simple and simple as is possible for the shopper, so it doesn't get out of selling.
A smooth checkout experience could also help reduce cart abandonment. A recent Baymard Institute metastudy of 49 studies found that the cart abandonment rate still hovers around 70 percent, and hasn't changed markedly within the last decade. Among the top reasons that carts are abandoned is a checkout process that was too lengthy or complicated (22 percent of times) and also the site was not offering enough choices for payment (responsible for 13% of abandonments). With a tightly integrated BNPL solution, retailers can solve both issues with customers at the same time.
Which is the best buy now or pay later option?
The choice of a BNPL provider that aligns with your business needs and customer requirements is a crucial aspect in determining the best solution. For example, Affirm provides custom payment options for merchants- these can include the short to the long-term as well as the option of 0% APR. By offering the right payment option that is in tune with consumer needs and prices, retailers can increase affordability for customers and possibly win a sale over competitors.
Another feature unique to Affirm is the Adaptive Checkout technology, which gives you the most pertinent choices for payment to your customers depending on the item's price point and the total price of your cart. The term "personalization" is a part of the online game Affirm can tailor the duration and APR for each purchase -- delivering several suitable options for pay-over-time for the buyer, all in the form of a seamless experience.
What can you do to let your customers, both current and future, know about the BNPL option before checkout? If you're targeting a specific market it is possible to consider promoting it via social media sites. Retail Dive states that 85percent of the customers' purchase choices are influenced by social media, so advertising the presence of BNPL on the platforms can be an advantage. And if you're trying to reach Gen Z be aware that 45% of respondents have cited TikTok and Instagram as their top social media platforms influencing their purchasing decisions.
As summer can be a slow season for companies and businesses, it's a great time for retailers to work on bringing BNPL up and running on their site, before the Back to School rush signals that the busiest weeks leading to winter holiday. It offers a chance to make thoughtful decisions concerning vendors, eliminate any issues with technology, and ramp up the marketing efforts to announce the launch of BNPL as a fresh payment option available at checkout.
The availability of an BNPL option when you checkout and publicizing it on social media might be a game changer for retailers looking to attract more online spend--and outplay other merchants.
Are you ready to include flexible payment options to your payment process? Apply to Affirm to get started and then use the Affirm Payments extension for payment-over-time options through the checkout process.
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*Payment options offered by Affirm will be subject to a credit check, may not be available all over the world, and are offered through these lending partners: affirm.com/lenders.