E-commerce has significantly evolved over the last few years, and the global pandemic has just added fuel to this growth. With more and more consumers, moving to online shopping, the brick and mortar stores have gradually established their virtual presence. As per the statistics, Millennials often referred to as modern shoppers, are said to do 60% of their shopping online. To the modern shopaholics, nothing is quite as enticing as the idea of buying now and paying later, aka BNPL
With the millennials being regarded as the main driving force for e-commerce growth in the foreseeable future, more and more online businesses are offering interest-free, buy now pay later (BNPL) installment payments and other payment solutions to make online offerings relevant to Millennials.
In this article, we will let you know how can you boost your sales in your e-commerce store by adapting to this trending and effective point of sale service – Buy Now Pay Later
Buy Now Pay Later: Defined
Before we delve into further details, let us first help you understand what exactly is Buy Now Pay Later. BNPL, as it is referred to, is a solution for point-of-sale financing, whereby the customers can complete their online transaction and choose to make the payment in installments over some time, instead of a one-time upfront payment.
The BNPL model is similar to that of credit cards that allow the shoppers to set aside items and pay them off over time. More so buy now pay later makes it possible for retailers to move products quickly out of inventory.
Buy Now Pay Later: How does it boost online sales?
BNPL is an enticing option to increase impulse buys and drive additional e-commerce sales. More so, the benefits are not just limited to an increase in sales, these point-of-sale loans are easy for retailers to manage, and statistics show these options lead to bigger baskets and greater customer loyalty.
Here is a look at how the Buy Now Pay Later option boost online sales and remains to be a favorite option for merchants and customers likewise –
Increase in Customer Retention
With online shopping growing dramatically, the e-commerce industry trends are changing faster than ever. These trends and ever-increasing changes make it necessary for online businesses to have a strong customer retention strategy to increase the customer’s lifetime value. Providing a seamless online shopping experience is one of the evergreen ways to entice customers. The buy now pay later option forms an integral part of this experience, that enables customers to shop with you on an ongoing basis, regardless of the kinds of payment methods you have to offer. More so, statistics show that online businesses would lose up to 31% of customers, who would not have purchased without the ability to pay later.
Increase in conversion
According to statistics around two-thirds of shopping carts are abandoned, which leads to a lot of lost sales for most e-commerce companies. However, stores that add BNPL options at the checkout are witnessing a sharp drop in cart abandonment rates, leading to a boost in profits without any significant cost increases.
More so, as per statistics around 48/% of the consumers would allow the BNPL payment service availability to influence their purchasing decisions, which means that nearly half of your prospective customers may be tempted to make a purchase one way or another by this payment option.
Better customer experience
As we mentioned earlier, a seamless customer experience is of utmost importance to increase customer retention. Creating positive customer experiences builds loyalty and encourages repeat business. But the question lies how can one generate a positive customer experience? Well, the solution is rather simple! Just generate more ways to shop, more ways to pay, and more products to choose from. Offering your customers the flexibility to shop and pay the way they want often means an increase in loyalty and, thereby an increase in sales. As per statistics, around 6% of carts are abandoned due to insufficient payment options, which says a lot about how much customers value a variety of ways to pay.
Is BNPL right for your online business?
Including a BNPL payment option in your online store requires a financial and marketing evaluation. Merchant must consider the pricing of their products and see if financing would even be a feasible alternative. In case you wish to move rather expensive items out of inventory, make sure that your BNPL solution can break payments down into smaller amounts that your customers can afford.
Moreover, it is important to consider the cost of providing a BNPL option, which shall depend on the provider you select and the transaction fees charged.
As the world of e-commerce continues to evolve, the payment methods & financing options must keep up with the fast-paced growth of this industry. While digital wallets have been on the rise for years, today, more than ever, customers favor buying now and paying later than ever before.
The buy now pay later model has a striking similarity to that of credit cards. If you want to attract young shoppers and open the avenues to more purchases, BNPL needs to be part of your checkout process.