A zero-interest micro-loan for immediately purchasing your new phone or the latest pair of sneakers is the stuff of dreams. Well, not anymore.
BNPL for retail, short for Buy Now Pay Later, has emerged as a preferred payment method for customers.
BNPL differs from a standard no-cost EMI in two key ways:
- The approval process is usually shorter and quicker.
- More people can access this payment option.
This significantly improves the affordability of products online, which is why BNPL has become exceedingly popular amongst customers today… and businesses.
One major benefit businesses enjoy by making BNPL for retail available on their digital commerce channels is a boost in sales. As customers increasingly can afford higher MRP purchases, their average order value naturally goes up – and this is because the payments owed can be paid over time, without interest, and in affordable chunks.
Let’s explore how BNPL for retail can significantly boost sales for a business.
BNPL for retail: 8 ways to boost retail sales
It is interesting to know how much Buy Now, Pay Later has earned consumers’ favour ever since its launch. According to Juniper Research, consumer spending, valued at $112 billion in 2022, is estimated to rise to a whopping $437 billion by 2027. That is a 291% rise in a period of five years.
Understanding that consumers are willing to spend more through this payment method, businesses can capitalise on this fact. Let’s explore eight effective ways to use Buy Now, Pay Later to improve sales growth.
1. Empower customers with flexible payment options
The economic instability after the COVID-19 pandemic has changed consumer mindset into making financially cautious decisions. This has inevitably led them to explore more flexible options in payment that allow them to stick to their financial goals as closely as possible.
This is where BNPL helps businesses cash in on that consumer spending – by providing customers with the flexibility to pay over a period of time in affordable chunks. This way, they can stretch their budgets a little as time allows them to make payments later.
2. Attract a new audience and retain older customers
One of the biggest challenges for an established or new business is to explore new markets and gain a new audience base without significantly changing the price point of its products. The Buy Now Pay Later model is the perfect way to gain exposure in new markets.
Where the buyers initially considered certain products too costly to spend money on, the BNPL option could open up this purchase for them. This helps businesses significantly boost their sales by becoming appealing to a consumer base that was previously out of reach.
3. Enhance cash flow with BNPL for retail
Buy Now Pay Later has the potential to enhance cash flow for businesses. The mechanism of BNPL is such that businesses don’t have to worry about payments not coming through.
When a customer checks out using BNPL, the business immediately receives its due payment through the financial parties involved in the mechanism, which safeguards the company from the potential risk of payment defaults.
This has a tremendous impact on the cash flow statements of the business at the end of the day, also improving the yearly progress report on the company’s financial statements at the end of the FY.
4. Simplify the payment process
Buy Now Pay Later does not require customers to undergo a long-winded credit check or approval process. A basic preliminary check is conducted to assure the authenticity of payments, but beyond that, not much assessment is required.
Furthermore, brands can significantly increase customer satisfaction by cutting down the steps involved in making payments – from clicking on the checkout button to receiving the confirmation receipt.
BNPL enables brands to do just that. Customers can check out quickly by selecting the BNPL option at checkout and entering the preferred repayment term.
5. Boost CSAT scores
Consider this: Would you rather shop with a brand where you were forced to comply with its payment terms or with a brand that allowed you to shop on your terms?
Buy Now Pay Later is a mechanism that puts the consumer at the forefront – allowing them to choose the payment method and terms.
It boosts customer satisfaction each time they shop using BNPL at a business’s checkout page.
6. Keeps business competitive
Most modern businesses with services or products to sell online are providing their customers with the BNPL option. That includes businesses that are in direct competition with yours. To stay at the forefront of your customer’s mind, you must cater to consumer preferences and provide BNPL and SNPL (Save Now, Pay Later) options at checkout.
7. Reduce cart abandonment
Several customers cannot maintain a good score on their cards, which greatly limits their shopping capacity. The good news is that it is possible to get these customers back on board and shopping again by providing them with a BNPL option (that does not require an exhaustive credit line check) and boost your sales in the process. Data shows that 66% of BNPL users abandon their carts because they lack BNPL options at checkout.
8. Enhance affordability
This scenario is better understood through an analogy. Say you wish to purchase a television set, but it is currently out of your budget. You already have two other EMIs ongoing and cannot consider the interest of a third one.
It is for such customers that BNPL makes things more affordable. By selecting the BNPL option, you don’t have to worry about paying interest or having a good credit score. Simply kick your feet up and tune into your favourite channel on your chosen television set.
Much is to be gained for businesses wishing to ride the wave and capitalise on the opportunity that BNPL provides.
In addition to boosting sales, it enhances customer satisfaction and expands your consumer base. BNPL is on a rising trajectory, and the retailers that pitch the hook in time stand to experience steady growth in sales in the future.
The best way to leverage this opportunity is by considering the Affordability Suite by Plural. It is a complete payment solution that houses many payment options, including BNPL.
By integrating the Affordability Suite across your channels of commerce, you can provide payment flexibility coupled with personalised offers and deals for your customers. Reach out to us to get started.
Amrita Konaiagari is a Marketing Manager at Plural by Pine Labs and Editor of the Plural blog. She has over 10 years of marketing experience across Media & Tech industries and holds a Master’s degree in Communication and Journalism. She has a passion for home décor and is most definitely a dog person.