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With consumer spending on the rise at the beginning of the year, as well as online shopping continuing to expand across all age groups Merchants are facing both greater opportunity and more competition for the dollars of consumers. This means that they must find new methods to satisfy the needs of consumers as well as giving them additional opportunities to buy from your site or brand. A great place to start is with the checkout processlooking for opportunities to simplify this crucial last step during the purchase and offer payment options for your customers to enhance their shopping experience.
One of the trends that has rapidly gained popularity in shopping online is the "Buy Now, pay Later" (BNPL) choice when you checkout. BNPL is an alternative payment method that allows shoppers to divide the cost of their purchase into reasonable installments distributed over timefor instance, for a couple of weeks and in others over multiple months.
Purchase now and pay later is getting more popular.
A growing number of consumers are taking advantage of pay-over-time options whenever they're readily available. The year 2023 saw online retailers saw a significant rise in the number of purchases that were made using BNPL, with volumes up 42.5 percentage year-over-year. As a result, BNPL placed around $16.6 billion in sales onto merchant books in the last couple of months of the year which is a trend Adobe projects will continue through 2024.
Roughly 93.3 million people are expected to use BNPL in 2024 according to EMarketer as well as American Banker reported that the BNPL market in the US may reach as high than $8.3 billion in 2028. BNPL is being embraced more and more by online retail giants, like Amazon.com -- which will further accelerate its expansion and making the option far more familiar to consumers that buy online.
That means that BNPL an option merchants must consider when competing with a growing online market.
Offering buy now, be paid later: Some points to think about
Incorporating BNPL options at checkout sooner rather than later offers merchants more opportunity to capture new customers as well as establish a long-term relationship.
If a retailer doesn't have a BNPL option at check-out, this might be the ideal opportunity to introduce one into the mix. If they do provide it by adding the BNPL option more prominent on their websites, specifically during checkout or by announcing the availability of the option through advertising may help further distinguish their brand and improve the experience of shopping for clients.
The more noticeable the BNPL option is displayed on an online store's website, and the sooner they market the option through email and social channels and social media, the more likely they are to want to know more -- helping the retailer bring customers to their site to close the transaction.
BNPL helps merchants increase the appeal of their business to those who wish to purchase items in the near future, but wish to control their cash flow, without credit. By allowing the possibility of splitting the total cost of an item into, for instance, four installments of interest-free payment every two weeks, consumers are able to purchase what they want without delay. Some BNPL companies, like Affirm and Affirm, offer long terms of a few months or even 3 years for carts with large sizes and high-ticket items.
While adding yet another payment option on the backend of an online store may appear daunting for smaller businesses who are already working on their time, there are options available with quick and easy implementation that can streamline the entire process for both the seller and merchant. In this case, they can often make use of pre-built eCommerce integrations, like the AffirmPayments extension, to easily add an BNPL payment option to their existing checkout page.
The upside of offering buy today, pay later your Woo store
What benefit do an BNPL integration bring? For one, using an integration streamlines the purchase process for the growing number of customers who would prefer to pay over the course of 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. In fact according to The National Retail Federation reports that almost half (46%) of Gen Z respondents consider a seamless checkout process critical to their buying experience.
An important consideration for the integration is the user experience for the shopper. It's crucial that the buyer has the ability to see their payment options as well as go through the approval process without needing to navigate to an additional website. With a pre-built integration, merchants ensure that the transaction is as easy and painless as possible for the shopper, so it doesn't get impeding selling.
A smooth checkout experience could aid in reducing cart abandonment. An earlier Baymard Institute metastudy of 49 reports found that the rate of abandonment is still around 70 percent, and hasn't changed markedly in a decade. One of the main reasons that carts are abandoned is a checkout procedure that was either too lengthy or complicated (22 percent of the time) and also the site did not offer enough choices for payment (responsible in 13% of cart abandonments). With a tightly integrated BNPL system, merchants are able to solve both customer concerns at once.
What is the best way to select a pay now or pay later option?
Selecting a BNPL service that is compatible with your needs as a business and with customer requirements is a crucial aspect in determining the best solution. As an example, Affirm provides custom payment options for merchants- these can include short- to long-term and zero-interest options. Offering payments that are in line with consumer needs and prices, retailers could increase their affordability to consumers and even gain a customer over competitors.
Another unique feature of Affirm is their Adaptive Checkout technology, which dynamically offers the most relevant choices for payment to your customers depending on the item's price point and the total amount of the cart. Personalization is the theme of the online game, Affirm customizes the time duration and APR for each purchase -- delivering several suitable options for pay-over-time to the customer, in one frictionless experience.
How do you let your customers, both current and future, be aware of the BNPL option before checkout? If you're targeting a specific market, you may want to promote it on social media sites. Retail Dive states that 83% of customers' buying choices are influenced through social media. Therefore, advertising the possibility of offering BNPL through those channels could be an edge. And if you're targeting Gen Z, know that 45 percent of respondents have cited TikTok as well as Instagram as top apps that influence their buying choices.
As summer can be a slow season for companies There's a chance for retailers to work on getting BNPL operational on their site, before it gets busy. Back to School rush signals the beginning of the busy months leading up to the holiday season. It offers a chance to think carefully regarding vendors, resolve any issues with technology as well as launch a solid marketing campaign announcing the introduction to BNPL as a new payment option that can be used at the check-out.
Giving an BNPL option when you checkout and announcing it on social media might make a difference for businesses looking to get more online spend--and outplay other merchants.
Are you ready to include flexible payment options to your checkout? Apply for Affirm for a start using the Affirm Extension for Payments to provide pay-over-time through the checkout process.
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*Payment options through Affirm is subject to an eligibility check and may not be accessible in all areas, and they are made available through these lending partners: affirm.com/lenders.