and Consumer spending is on the rise Earlier this year, and Online shopping continues to grow Across all demographic groups, retailers face increasing opportunities and competition for consumer dollars, which means they need to find new ways to meet consumer needs and give them more reasons to shop with your brand and site. Start with the checkout process: Identify opportunities to streamline that critical final step of the sale and offer payment options that improve the customer experience.
One trend that is quickly gaining popularity in online purchasing is the “buy now, pay later” (BNPL) option at checkout. BNPL is an alternative payment method that allows shoppers to split the total purchase amount into affordable installments that can be paid in instalments over a period of weeks or months.
Buy now, pay later options are on the rise
More consumers are taking advantage of available installment payment options. In 2023, online retailers will see a significant increase in BNPL purchases, with the volume 42.5% increase As a result, BNPL $16.6 billion In the final two months of 2023 alone, sales to merchant books reached 1 million units, and Adobe predicts this trend will continue into 2024.
almost 93.3 million consumers According to EMarketer, the number of businesses using BNPL is expected to increase in 2024, and American Banker expects the U.S. BNPL market to grow by 1.5% in 2024. $8.3 billion BNPL is also increasingly being adopted by online retail giants such as Amazon.com, further accelerating its growth and making it a more accessible option for consumers shopping online.
That makes BNPL an option that retailers can’t afford to ignore as they compete in an increasingly crowded online marketplace.
Buy Now, Pay Later Offers: Things to Consider
Adding BNPL options early at checkout gives merchants more opportunities to acquire new customers and build ongoing relationships.
For merchants that don’t already offer BNPL options at checkout, now may be a great time to add the option. Merchants that offer BNPL options can further differentiate their brand and improve their customers’ shopping experience by prominently displaying them on their website, especially at checkout, and promoting their availability through their marketing.
The more prominent a BNPL option is on a merchant’s site, and the sooner it’s promoted through emails and social channels, the more likely customers are to want to find out more, helping merchants drive shoppers to their site and close the sale.
BNPL helps retailers expand their appeal to customers who want to buy today but want to manage their cash flow without using credit. The total cost of a purchase can be split into four interest-free payments, for example, every two weeks, so consumers can get what they need without delay. AssertFor larger carts or higher-value items, we also offer longer-term options ranging from a few months up to three years.
While adding yet another payment method to the backend of an e-commerce site can seem like a daunting task for small merchants who are pressed for time, there are quick and easy implementation options that can streamline a merchant’s entire process. For example, merchants can take advantage of pre-built e-commerce integrations such as: Affirm Payments Extension for WooCommerceyou can easily add BNPL options to your existing checkout experience.
Benefits of offering “Buy Now, Pay Later” on Woo Store
What are the benefits of BNPL integration? First, it streamlines the purchasing process for customers who increasingly prefer to pay in installments. It also helps keep consumers on your site and towards checkout, especially for younger consumers who grew up with online commerce. In fact, National Retail Federation report Nearly half of respondents (46%) believe a seamless checkout process is important to their shopping experience.
A key consideration in any integration is the shopper experience. It’s important that customers can see their payment options and go through the approval process without having to navigate to a separate website. By using pre-built integrations, merchants can make the process as direct and easy as possible for shoppers, ensuring that selection doesn’t become a barrier to the sale.
A seamless checkout experience also helps reduce cart abandonment. Baymard Research Institute According to a meta-study of 49 reports, cart abandonment rates still hover around 70 percent, with no notable change in a decade. Top reasons for abandonment include a checkout process that is too long or complicated (22 percent of cases) and a site that doesn’t offer enough payment options (responsible for 13 percent of cart abandonment). A tightly integrated BNPL solution allows merchants to address both of these customer concerns simultaneously.
How to choose a buy now, pay later provider
Choosing a BNPL provider that aligns with your business needs and customer expectations is a key consideration in finding the right provider. For example, Affirm offers custom payment solutions for retailers, including short-term, long-term, and 0% APR options. By offering payment options that align with customer needs and common price ranges, retailers can increase affordability for shoppers and potentially drive sales over competitors.
Another unique feature of Affirm is its Adaptive Checkout technology, which dynamically offers shoppers the most appropriate payment option based on the price of each item and the total cart amount. Personalization is key in online gaming, and Affirm customizes the term and APR of each purchase, giving customers multiple relevant installment options in one smooth experience.
How will you let current and potential customers know about your BNPL options before they check out? Depending on your target market, you may need to consider promoting it via social media platforms. Retail Dive Report 85% of customer purchasing decisions are influenced by social media, so promoting your BNPL availability on these channels can be a competitive advantage – and if you’re targeting Gen Z, know that 45% of respondents cited TikTok and Instagram as the top platforms that influence their purchasing decisions.
Since business is often slow during the summer, this is an opportunity for retailers to focus on getting BNPL up and running on their sites before the back-to-school rush marks the start of the busy period before the winter holidays. It’s a chance to make thoughtful decisions about vendors, iron out any technical issues, and ramp up a solid marketing campaign announcing the addition of BNPL as a new payment option available at checkout.
Offering a BNPL option at checkout and announcing it on social media could be a game-changer for retailers looking to increase online spend and outperform their competitors.
Are you ready to add flexible payments to your checkout? Apply for Affirm How to get started Affirm Payments Offer installment payments through your WooCommerce checkout.
—
*Payment options through Affirm are subject to eligibility verification and may not be available everywhere. These options are offered through our lending partners: firm.com/lenders.
