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With consumers spending on the increasing towards the start of the year, as well as the popularity of online shopping continues to increase across all age groups Merchants are facing both greater potential and greater competition for the dollars of consumers. It is essential to find innovative ways to cater to the demands of customers as well as giving them additional opportunities to buy from your site or brand. One of the best places to start is with the checkout process- identifying opportunities to both simplify this crucial last step during the purchase and offer the option of payment to your customers to enhance their shopping customer experience.
One trend that has quickly gained popularity in online purchases includes the "Buy Now, Pay Later" (BNPL) alternative during checkout. BNPL is a payment method that allows customers to divide the cost of their purchase into affordable installments that are divided over time- in some cases in a couple of weeks or in other cases, over several months.
Pay later, buy now is gaining popularity
More consumers are now taking advantage of pay-over-time options when they are accessible. The year 2023 saw online retailers saw a significant increase in purchases made with BNPL, with volume increasing by 42.5 percent from year to year. This means that BNPL put some $16.6 billion on merchant books in the last 2 months in 2023 alone which is a trend Adobe expects to continue until 2024.
Roughly 93.3 million consumers will be using BNPL in 2024 according to EMarketer, and American Banker reported that the BNPL market in the US could be as high up to $8.3 billion before 2028. BNPL is being embraced more and more by online retailers, such as Amazon.com -- further accelerating its expansion and making the choice more accessible to those who buy online.
This means that BNPL an option that businesses can't ignore as they compete in an increasingly crowded online marketplace.
Buy now, pay later: Things to consider
Incorporating BNPL choices for checkouts earlier rather than later gives merchants more opportunity to capture new customers as well as establish an ongoing relation with them.
For merchants that don't yet have the BNPL option at check-out, this might be the ideal opportunity to introduce one into the menu. For merchants who do offer it, adding the BNPL option more prominent on their websites, specifically when you check out, or promoting its existence through promotions could help make their brands stand out and increase the experience of shopping for clients.
The more visible the BNPL option is displayed on the site of a retailer and the earlier they advertise the service via emails and on social networks, the more likely customers will want to learn more about it, which will help the merchant bring shoppers on their site and close the transaction.
BNPL can help merchants expand their appeal to customers who are looking to make a purchase today, but also want to control the flow of cash without credit. The ability to divide the total cost of a purchase into for instance, four installments of interest-free payment each two weeks, buyers can get what they need without delay. Some BNPL service providers, including Affirm provide longer time options that span several months or even three years for large carts as well as expensive items.
When adding a new payment type on the backend of a website's e-commerce platform may seem daunting for smaller merchants already pressed for time However, there are alternatives that are quick and simple application that could simplify the entire process for the retailer. As an example, retailers typically can take advantage of pre-built ecommerce integrations, like the Affirm Payments extension the easy addition of an BNPL payment option to their existing checkout process.
Advantages of offering buy now and pay later your Woo store
What advantages do the BNPL integration bring? One benefit is that an integration can streamline the purchasing process for the ever-growing amount of consumers who like to pay in time. Keeping consumers on your site and moving them towards the checkout process is also important, especially for younger shoppers who are accustomed to online commerce. In fact, The National Retail Federation reports that almost 50% (46 percent) of Gen Z respondents consider a smooth checkout process essential to their shopping experience.
One of the most important aspects to consider for integration is how it will affect the buyer. It is essential that customers has the ability to see their payment options as well as go through the approval process without having to go to a different site. Through an integrated system, retailers make the process as direct and easy as they can for customers, ensuring that the choice doesn't get out of the sale.
A smooth checkout experience could assist in reducing abandonment of carts. A recent Baymard Institute metastudy of 49 research reports revealed that cart abandonment rates still hovers around 70 percent, and hasn't changed markedly over the past decade. The top reason that carts are abandoned is a checkout process that was long or complex (22 percent of the time) as well as the website was not offering enough payment options (responsible to 13% cart abandonments). Through the tightly-integrated BNPL solution, retailers can address both of those customer concerns at once.
Which is the best buy today, pay later service
Picking the BNPL service that is compatible with your needs as a business and with customer expectations is an important consideration to find the right solution. For example, Affirm provides custom payment solutions for merchants -- these can include both long- and short-term options as well as the option of 0% APR. Offering the right payment option that is in tune with the needs of customers and standard prices, retailers could increase their affordability to consumers and even gain a customer over the competition.
Another feature unique to Affirm is their Adaptive Checkout technology, which provides dynamically the most appropriate payment options for your shoppers depending on the item's price point and the total amount of the cart. Personalization is the theme of the game online, Affirm can tailor the length and the APR of each purchase by providing several appropriate options for paying over time for the buyer, all in the form of a seamless experience.
What can you do to let your current and potential customers be aware of the BNPL choice before they make their purchase? Depending on your target market You may wish to consider promoting it via social media sites. Retail Dive states that 85% of the customers' purchase choices are influenced through social media. Therefore, advertising the presence of BNPL on these platforms could give you an advantage. In case you're targeting Gen Z be aware that 45 percent of respondents have cited TikTok as well as Instagram as their top social media platforms that influence their buying purchases.
As summer can be a slow season for companies and businesses, it's a great time for merchants to focus on bringing BNPL working on their site, before when the Back to School rush signals that the busiest months leading up to the winter holiday. It offers a chance to make thoughtful decisions about vendors, smooth out any issues with technology, and ramp up the marketing efforts to announce the addition of BNPL as a new payment option that can be used at the checkout.
Offering a BNPL option at checkout and announcing it on social media could be a game changer for retailers looking to attract an increase in online sales and outdo the competition.
Do you want to incorporate flexible payment to your online checkout? Apply for Affirm for a start and use the Affirm Payments extension to offer payment-over-time options through your checkout.
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*Payment options offered by Affirm are subject to a credit check they may not be offered all over the world, and are offered by these lending partners: affirm.com/lenders.