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With consumers spending on the increasing in the first quarter of the year, and the popularity of online shopping continues to expand across every demographic group, merchants face both more opportunities and competition to the dollars of consumers. This means that they must find new ways to cater to the demands of customers and giving them more reasons to shop the brand or website you have created. One of the best places to start is with the checkout process- identifying opportunities to both streamline this important last step during the purchase and offer payment options for your customers that will enhance their satisfaction.
A trend that's rapidly grown in popularity for online purchases is the "Buy Now, pay Later" (BNPL) alternative when you the checkout. BNPL is an alternative payment method that allows shoppers to break up the total amount of their purchase in affordable installments that are distributed over timesometimes over a few weeks, or in other cases, over several months.
Buy now, pay later is on the rise
Many consumers are making use of pay-over-time payment options whenever they're readily available. In 2023, online merchants saw a significant rise in the number of purchases that were made using BNPL, with volumes up 42.5 percentage over the previous year. As a result, BNPL placed around $16.6 billion of sales into merchant books in the last couple of months of the year alone and this trend Adobe expects to continue until 2024.
Roughly 93.3 million customers will be using BNPL in 2024, according to EMarketer as well as American Banker reported that the BNPL market in the US may reach as high as $8.3 billion by 2028. BNPL is also being adopted increasingly by internet-based retailers, such as Amazon.com which is further speeding up its expansion and making it more accessible to those who purchase online.
This is what makes BNPL an option merchants must consider when competing with a growing online marketplace.
Offer buy now and make payment later: Some things to take into consideration
Adding BNPL options at checkout sooner rather than later offers merchants a greater chance to win new customers as well as establish a long-term relationship.
Merchants who don't have a BNPL option at checkout, this could be the perfect opportunity to introduce one into the mix. In the case of merchants that do offer it by adding the BNPL option more prominent on their websites, specifically during checkout or by announcing its availability through marketing, can help to distinguish their brand and improve the experience of shopping for customers.
The more prominent the BNPL option is on a merchant's site, and the sooner they advertise the service via emails and on social networks, the more likely customers would be interested in learning more, which can help the merchant bring shoppers to their website to complete the deal.
BNPL will allow merchants to expand the reach of customers who are looking to purchase items in the near future, but wish to manage the flow of cash without credit. By allowing the possibility of splitting the total cost of a purchase into, like, four payments that are interest free each two weeks, buyers have the ability to get their needs without delay. Certain BNPL service providers, including Affirm and Affirm, offer long terms of a few months up to 3 years for carts with large sizes or expensive products.
When adding a new payment type on the backend of an online store may be a daunting task for small-scale merchants already pressed for time However, there are alternatives that are quick and simple application that could simplify the entire process for the retailer. In this case, they are often able to make use of pre-built eCommerce integrations, for instance the AffirmPayments extension the easy addition of BNPL options to their existing checkout experience.
Benefits of offering purchase now, pay later on your Woo store
What benefits does an BNPL integration provide? One benefit is that an integration streamlines the purchase process for the growing variety of shoppers who prefer to pay over time. In addition, keeping customers on your site and moving them towards the checkout process is crucial, particularly for younger shoppers who have grown up with the convenience of online shopping. In fact according to The National Retail Federation reports that more than 50% (46 percent) of Gen Z respondents consider a effortless checkout process to be essential to the purchasing experience.
One of the most important aspects to consider for integration is the experience for the buyer. It's crucial that the buyer can view their payment options as well as go through the approval process without having to go to a separate site. Through a pre-built integration, merchants can make the procedure as simple and easy as they can for the shopper, so they don't stand impeding selling.
A smooth checkout experience could aid in reducing cart abandonment. An earlier Baymard Institute metastudy of 49 reports found that the cart abandonment rate remains at around 70 but hasn't drastically changed in a decade. The top reason to abandon carts: a checkout process that was difficult or lengthy (22 percent of the time) and also the site didn't offer sufficient choices for payment (responsible in 13% of cart abandonments). By integrating a tight BNPL solution, merchants can solve both customers' concerns in one go.
Which is the best buy today, pay later service
Picking the BNPL provider that aligns with your needs as a business and with customer needs is essential to determine the most suitable match. For example, Affirm provides custom payment solutions to merchantswhich can range from the short to the long-term as well as the option of 0% APR. With payments that are in line with the needs of customers and standard prices, retailers can increase affordability for shoppers and potentially win a sale over competitors.
Another feature unique to Affirm is their Adaptive Checkout technology, which provides dynamically the most appropriate ways to pay your customers dependent on each product's price point and the total amount of the cart. With personalization the name of the online game Affirm can tailor the duration as well as the rate of interest for every purchase by providing several suitable options for pay-over-time to customers, all within an easy-to-use user experience.
How do you let the customers you have already and those who are likely to purchase from you inform them about the BNPL option before checkout? Based on the market you are targeting it is possible to think about promoting the offer on social media sites. Retail Dive states that 85percent of consumers' purchasing purchases are affected by social media, so advertising the availability of BNPL on the platforms can be a competitive edge. And if you're trying to reach Gen Z, know that 45% of respondents have cited TikTok as well as Instagram as their top social media platforms in influencing their purchase purchases.
As summer can be a slow season for companies, there's an opening for businesses to concentrate on bringing BNPL up and running on their site, before it gets busy. Back to School rush signals that the busiest period leading up to holiday season. It gives them the opportunity to make thoughtful decisions concerning vendors, eliminate the technical glitches, and ramp up a solid marketing campaign announcing the addition to BNPL as a fresh payment method that is available during checkout.
The availability of an BNPL option at checkout and making it public via social media can change the game for merchants looking to capture more online spend--and outplay the competition.
Are you ready to include flexible payment options to your checkout? Apply to Affirm to get started using the Affirm Extension for Payments to provide the option of pay-over-time at your payment process.
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*Payment options through Affirm will be subject to a credit check and may not be accessible in all areas, and they are made available through these lending partners: affirm.com/lenders.