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In the wake of an increase in consumer spending towards the start of the year and the popularity of online shopping continuing to expand throughout all segments of society, firms are confronted with greater possibilities and challenges to compete for the consumer's dollar. It is vital to come up with innovative ways to cater to the requirements of your customers, as well as giving them a reason to purchase from the brand or site you've created. A great place to start is the checkout procedure, finding opportunities to simplify this crucial final step of the sale and give customers a choice of how to make payments to increase the shopping experience.
One trend that has rapidly increased in popularity with online shoppers is the "Buy Now, pay Later" (BNPL) option during check out. BNPL is an alternative payment method that allows shoppers to break up the price of their purchases in low-cost installments that are distributed over time. Sometimes, it's spread for several weeks, while in other cases it's spread across several months.
Pay later, buy now is growing
Numerous consumers are using pay-over time services should they are made available. In 2023, that online merchants experience a massive increase in purchases that were made using BNPL as well as volume increased by 42.5 percent between the years. This means that BNPL placed around $16.6 billion in sales onto merchant books during the course of the last couple of months of the year and this trend Adobe predicts will continue to last through 2024.
Around 93.3 million customers will be using BNPL in 2024 as per EMarketer as well as American Banker reported that the BNPL market in the US may reach as high as $8.3 billion in 2028. BNPL is increasingly being accepted by online merchants, such as Amazon.com -- which is expected to further accelerate its growth as well as making it more familiar to consumers that buy on the internet.
This means that BNPL is a choice that businesses must consider when competing in a crowded online market.
Offering buy now, be paid later: Some things to consider
The incorporation of BNPL alternatives for checkouts earlier rather than later offers retailers the chance to draw new customers, and establish an ongoing relationship with them.
If a retailer doesn't offer the BNPL choice during checkout, it might be the perfect opportunity to add it to the list of choices. In the case of merchants who do, providing the BNPL choice prominently visible on their websites, specifically at checkout, or announcing the availability via marketing can help their brand stand out and increase customer satisfaction.
The more prominently the BNPL option is displayed on the web site of a store, more quickly they can promote this feature through email and social channels and the more likely that customers are interested in knowing more, which can help the retailer bring clients to their website in order to complete the deal.
BNPL allows merchants to reach out to customers who are looking to buy items soon and want to control the cash flow with no credit. By allowing the possibility of splitting the cost of a purchase in, for example the four installments of interest-free payments every two weeks, clients can obtain their requirements without time delay. Certain BNPL services, including Affirm and Affirm, provide extended time plans that last several months up to 3 years for carts that have large sizes or expensive merchandise.
In the event of adding a new feature to pay at the side of an online store can be daunting for small-scale retailers who are working hard at their own pace. There are options that can be quick and straightforward that will make the process easier for retailers. In this instance, they typically can benefit from pre-built ecommerce integrations, for instance the AffirmPayments extension which allows users to quickly include BNPL features to the checkout process they already have.
Advantages of offering buy now and pay later your Woo store
What advantages can an BNPL integration bring? First, an integration will streamline purchasing in the face of ever-growing numbers of shoppers who prefer to pay over time. Ensure that your people are using your website before they can the checkout process is crucial particularly for young shoppers who are accustomed to the convenience of online shopping. According to National Retail Federation reports that almost half (46%) from Gen Z respondents consider a easy checkout process essential to their purchasing experience.
The most crucial thing to think about when implementing the integration is how it'll impact the user. It's important that the customer has the ability to see their options for payment and also go through the process of approval without needing to go to a different website. With an integrated system retail stores will be able to make this process as simple and simple as is possible for the shopper and ensure it does not take the fun out of the business of selling.
A seamless checkout experience can also help reduce cart abandonment. An earlier Baymard Institute metastudy of 49 research studies revealed that cart abandonment rates is still around 70, and hasn't changed markedly in the past 10 years. Among the top reasons that carts get abandoned is a checkout process that was complex or too long (22 percent of the times) as well as the fact that the website did not offer enough options to pay (responsible for 13% of abandoned carts). When you have a well-integrated BNPL solution, retailers can address both of these issues for customers at the same time.
Which is the best buy now or pay later?
The choice of a BNPL service that is compatible with the needs of your company and customers needs is an important factor in determining the best solution. Affirm, for instance, Affirm provides custom payment options for merchants. They can include the short to the long-term as well as the possibility of zero APR. By offering the right payment option which is compatible to the needs of consumers and their prices merchants can improve prices for their customers, and even win a sale over competitors.
Another feature unique to Affirm is Affirm's Adaptive Checkout technology, which offers you the most relevant alternatives for paying your customers depending upon the cost of your item as well as the overall cost of your shopping cart. The term "personalization" is element of the online experience. Affirm is able to alter the length and APR for each purchase -- delivering several acceptable options to pay over time for buyers, all in the form of seamless shopping.
What are you able to do to inform your customers, current and future, know about the BNPL choice prior to checkout? If you're targeting a particular segment, you can consider promoting it via the social media platforms. Retail Dive reveals that 85 percent of consumers' purchasing decisions can be influenced by social media. So advertising the existence of BNPL on these platforms could prove beneficial. If you're looking to reach Gen Z be aware that 45% of respondents have cited TikTok and Instagram as the most popular social media platforms influencing the purchase decisions of their peers.
Since summer is the slowest time of year for both companies and companies, this is a great time for retailers to get BNPL online on their site, before the Back to School rush signals that these are the busiest months leading to winter holiday. It offers a chance to make thoughtful decisions concerning the vendors they use, fix any issues in technology, and step up the marketing efforts to announce the launch of BNPL as a new option for payment at the checkout.
The possibility of having the BNPL option during checkout and publicizing it on social media might be a game changer for merchants looking to draw greater online shoppers and compete with other retailers.
Are you prepared to add flexible payment options to your payment process? Apply to Affirm to begin using the Affirm Payments extension to offer payment-over-time options through the check-out process.
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*Payment choices offered by Affirm will be subject to a credit check they may not be offered all over the world, and can be accessed through the following lenders: affirm.com/lenders.
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