Keeping sales numbers up is imperative for any merchant. Thankfully, for eCommerce merchants, there are a few tips and tricks that you can apply to boost your sales numbers. Offering your customers the option of instalment payments is a great option to take your sales from 0 to 100!
Checkout convenience = customer allegiance
Buy now, pay later (BNPL) options are easy for merchants to implement at the point of sale. This allows you to create a seamless checkout process for your customers. Offering your shoppers a convenient option for instalment payments can lead to bigger purchases and less cart abandonment.
For one, BNPL requires a lot less administration than the average credit card. It often does not require a credit check, a lengthy registration process, or interest rates. This no-fuss approach can attract modern shoppers to spend cash at your store.
In fact, according to CNBC, RBC Capital Markets estimates that these POS loans increase conversion rates by 10% and upsize the average ticket size of customer purchases between 30% and 50%.
Making that budget stretch with instalment payments!
Another reason why instalment payments increase sales is because they empower the customer with time to pay off their purchases without the fees associated with credit cards. It allows the average budget to be a lot more flexible. And shoppers love flexibility!
As director of retail and automative lending at Ally Lending Russell Isaacson says, “It’s all about incrementality.” Attracting incremental sales, or sales that can be split over instalments, is excellent for business sales. We call it the incre-mentality – the consumer’s desire to pay for their purchases over more than one payday cycle.
According to one study, 60% of customers report that they use BNPL to make purchases that fall outside of their monthly budgets. The psychological and financial freedom that BNPL offers not only attracts consumers to your business, it keeps cashflow going with incremental instalment payments on bigger purchases. That’s good news for your sales numbers!
Targeting the right market
Any merchant knows that the millennial and Gen-Z market is the one that you want to target if you want your sales to soar. This is the same young market that demonstrates a desire to move away from credit cards.
BNPL options are attractive to Gen Z and millennial consumers for a number of reasons. Junior-level professionals generally have more disposable income at hand. The good news is that they want to spend it on the things they want and need! But, they might not have access to credit. Or maybe they’ll only have the funds to cover the total cost of their purchases over a couple of pay checks.
Therefore, instalment payments are a popular option with a younger market. Global trends reflect this pattern. According to the CNBC, BNPL is currently the fastest-growing eCommerce payment method in the world.
Offering your consumers the option to make instalment payments ensures that your business is staying up to date! You’ll be accessible to a younger market looking for interest-free ways to spend their disposable funds.
Instalment payments can help your business retain customers
Offering BNPL can sway new customers into buying from your new business, but it can also persuade existing customers into revisiting your business and checking out with full carts every time. In other words, BNPL can increase the customer lifetime value (CLV) of your business.
Author and marketing connoisseur Neil Patel defines CVL as the amount of profit that a business derives from a single customer for the duration of their relationship to a particular store. Although the scope of CVL is negligible, merchants can agree that it is the foundation of a successful business venture.
A healthy CVL also means that the same customer is returning to your store and driving up your sales. Those sales are also likely to be bigger-ticket items because the consumer is able to accommodate them in their budgets with instalment payments.
Sign up with Payflex
In a fast-moving world, it pays to keep up with consumer trends. Update your business’s payment options now and sign up with Payflex! We’ll walk you through setting up your merchant account and the process of integrating Payflex into your site.