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With consumers spending on the increasing towards the start of the year, and the popularity of online shopping continues to grow across all age groups businesses are faced with more opportunity and more competition for consumers' dollars. This means that they must find new ways to cater to the demands of customers and giving them more opportunities to buy from the brand or website you have created. A great place to start is with the checkout processlooking for opportunities to simplify this crucial last step in the sale and provide payment options for your customers which will improve their satisfaction.
One trend that has quickly gained popularity in online purchases is the "Buy Now, pay Later" (BNPL) alternative at the checkout. BNPL is a different payment method that allows customers to split the amount of their purchase in affordable installments that are divided over time- in some cases in a couple of weeks while in others, it's spread over several months.
Buy now, pay later is on the rise
Many consumers are taking advantage of pay-over-time options in the event that they become available. In 2023, online merchants saw a significant rise in the number of purchases that were made using BNPL which saw the volume increasing by 42.5% from year to year. As a result, BNPL added around $16.6 billion on merchant books in the last 2 months in 2023 and this trend Adobe projects will continue through 2024.
Roughly 93.3 million consumers will be using BNPL in 2024 according to EMarketer and American Banker reported that the BNPL market in the US could reach as much as $8.3 billion in 2028. BNPL is also being used increasing by the online retail giants like Amazon.com -- which will further accelerate the growth of the market and making it more accessible to those who shop on the internet.
This is what makes BNPL an option that merchants should not overlook as they compete in a crowded online market.
Offer buy now and be paid later: Some points to take into consideration
Incorporating BNPL choices for checkouts earlier rather than later gives merchants more opportunity to capture new customers and establish an ongoing relationship.
If a retailer doesn't have the BNPL option at check-out, this might be the perfect moment to include one into the mix. If they do provide it, placing the BNPL option prominently displayed on their websites, specifically during checkout or by announcing the availability of the option through advertising could help distinguish their brand and improve customer experience customers.
The more visible the BNPL option is displayed on an online store's website, and the sooner they market the option through emails and on social networks and the more likely that customers would be interested in learning more -- helping the retailer bring customers to their website to complete the transaction.
BNPL can help merchants expand their appeal to customers who are looking to buy today, but also want to handle their cash flow, without credit. With the ability to split 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 with no delay. Some BNPL providers, such as Affirm, also offer longer terms of a few months up to three years for large carts as well as expensive items.
While adding yet another payment type to the back end of an online store may be a daunting task for small-scale merchants who are already working on their time There are solutions that are quick and simple application that could simplify the entire process for the retailer. In this case, they are often able to take advantage of pre-built ecommerce integrations, like the Affirm Payments extension easy integration of the BNPL option to their current checkout experience.
Advantages of offering buy now, pay later on your Woo store
What advantages do an BNPL integration provide? For one, using an integration streamlines the purchase process for the ever-growing amount of consumers who like to pay in the course of time. Making sure that customers are on your website and moving towards checkout is essential, especially when it comes to younger customers who have grown up with online commerce. Actually according to The National Retail Federation reports that more than half (46%) of Gen Z respondents consider a seamless checkout process critical to their buying experience.
A key aspect to think about when implementing the integration is the experience for the buyer. It's important that the customer has the ability to see their payment options and go through the approval process without being required to navigate to an additional website. Through a pre-built integration, merchants can make the procedure as simple and simple as is possible to the customer, so the choice doesn't get out of making a sale.
An easy checkout process can assist in reducing abandonment of carts. A recent Baymard Institute metastudy of 49 research reports revealed that the cart abandonment rate still hovers around 70 percent but hasn't drastically changed in a decade. The top reason for abandonment: A checkout process that was lengthy or complicated (22 percent of times) as well as the website did not offer enough payment options (responsible for 13% of cart abandonments). Through the tightly-integrated BNPL system, merchants are able to tackle both these customer concerns at once.
How to choose a buy today, pay later service
Picking the BNPL supplier that matches your business needs and customer requirements is a crucial aspect to find the right match. For example, Affirm provides custom payment solutions to merchantsthey can offer the short to the long-term as well as 0% APR options. Offering payments that are in line with consumer needs and prices, retailers are able to increase the affordability of customers and possibly gain a customer over a competitor.
One of the unique features offered by Affirm is their Adaptive Checkout technology, which gives you the most pertinent ways to pay your customers depending on the item's price and total price of your cart. Personalization is the theme of the online game Affirm customizes the time duration and APR for each purchase -- delivering several appropriate options for paying over time for the buyer, all in one frictionless user experience.
What can you do to let the customers you have already and those who are likely to purchase from you know about the BNPL choice prior to checkout? Based on the market you are targeting You may wish to consider promoting it via social media platforms. Retail Dive states that 85percent of the customers' purchase purchases are affected through social media. Therefore, advertising the availability of BNPL on the platforms can be an advantage. If you're trying to reach Gen Z be aware that 45% of those surveyed have cited TikTok and Instagram as the top platforms that influence their buying decisions.
Since summer is often a slow time for businesses, there's an opening for merchants to focus on bringing BNPL working on their websites, ahead of the Back to School rush signals the start of the hectic weeks leading to holiday season. It gives them the opportunity to think carefully concerning vendors, eliminate any issues with technology, and ramp up the marketing efforts to announce the introduction to BNPL as a brand new payment method that is available during check-out.
Offering a BNPL option when you checkout and announcing it on social media could change the game for retailers looking to attract more online spend--and outplay the competition.
Are you ready to include flexible payment options to your online checkout? Apply for Affirm to get started and use the Affirm Payments extension to offer pay-over-time through your payment process.
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*Payment options through Affirm are subject to an eligibility check they may not be offered in all areas, and they are made available through these lending partners: affirm.com/lenders.