Now more than ever customers are shopping online and splitting their payments up over multiple months. A payment plan such as buy now pay later allows them to split up the cart total into manageable chunks they can pay back over time. Not only is this an extremely appealing way to pay, but it has also changed the way customers are shopping online.
We’re going to be talking about 3 ways buy now pay later options are reshaping online shopping and why business owners should be using them to grow their businesses.
Increasing cart value with Buy Now Pay Later
Being able to offer a buy now pay later option (BNPL) stops the price of larger shopping carts from being a major factor when it comes to decision making. Rather than being hit with one big lump sum, consumers are typically shown their monthly costs prior to checking out. One way buy now pay later options are reshaping online shopping is by reducing cart abandonment rates. It can also encourage customers to increase their average cart order value. Giving the customer the power to manage their payment options easier opens the door to higher-priced items becoming more affordable.
In a recent survey by Finder, 30% of consumers state that BNPL options allow them to pay for purchases they couldn’t afford otherwise. An example of how easily BNPL can increase cart value is down to a change in consumer decision making.
For example, if there are two variations of a product, one with basic functionality and another with advanced technology. One is priced at £149.99 which the customer can easily afford now. The second variant of the product is £899.94 which looks a lot less appealing. However, shown next to the expensive variant is ‘split your payments into 6 instalments of £149.99’. This makes the product a lot more appealing and aids in decision making. Allowing the customer to get the product now, rather than having to save up for it or put the full balance on credit.
EKM shop owners can now offer weekly buy now pay later with our new Laybuy integration. You can find it within the Settings section of your EKM shop under ‘Payment Methods’. Read the guide on getting Laybuy set up here.
Stay competitive and offer flexible payment options
It is becoming more and more important for online businesses to have a BNPL option, as consumers become more demanding and competition strengthens. Nike, ASOS and all other major ecommerce brands take advantage of extra custom from offering these instalment plans.
Having a BNPL option can also increase loyalty with customers. 44% of shoppers use BNPL due to ease and convenience. When customers know an online shop offers this method of payment they are more likely to stay loyal and shop again.
The great thing about BNPL payment gateways is the fact they are not limited to certain sized retailers. Even small businesses can take advantage of their services and compete with larger brand names. This is especially important during the holiday season and sale periods where you are typically expected to see an increase in traffic.
Convert first-time visitors more easily
First-time visitors can be wary when shopping on a new site. Whilst there are other ways to increase your trust signals such as reviews etc, some BNPL options give customers an opportunity to try products before they pay for them. Without the worry of money leaving their account they are more likely to make a purchase. This is a type of BNPL service allows customers to order their items, and have 30 days to either pay or return the items they no longer want. Whereas you would typically pay the first instalment whilst checking out in more traditional BNPL services, however, both are great options for online shop owners. Aside from this unique offering, seeing trusted payment gateways such as PayPal, who now offer PayPal Pya in 3, will also instil confidence that the site is secure.
Going back to increasing cart value, customers are also more likely to purchase multiple variants of a product. For example, t-shirts in different styles or colours. Previously without a BNPL option, this wouldn’t have been the case or would have made the online purchase more expensive than necessary and complicated with the refunds and returns of the products.
Is offering customers the option to checkout without paying going to increase the number of returns? To an extent, an increase is expected. Despite many thinking, this is a negative it is really the opposite. With most things, you don’t always see the immediate benefit. Just like building an online business, it takes time. If the user has a good experience with your brand and effortless return service they are much more likely to return to you in the future. Also whose not to say they won’t find a style or coloured top they would never have usually ordered and ended up keeping, thus generating more profit? Again this advantage for BNPL is not always an immediate effect but it’s best to have to return customers than none at all.
There is a range of risks associated with credit plans however with buy now pay later schemes, these remove all hassle of confusing terms of service and offer interest-free repayments. For the retailer, the money is received instantly and the consumer gets to spread out interest-free payments over time – it’s a win-win for both parties.