Buy Now, Pay Later options (BNPL) broke records this year during the busiest shopping days (Black Friday through Cyber Monday), accounting for $940M out of the $12.4B spent. But why are consumers turning to this over other retail payment options, and how can retailers take advantage? A quick recap of how we got to this point:
A Modern Twist on Layaway: Remember layaway? BNPL is its cooler, more flexible cousin. It's layaway reimagined for the digital age, allowing customers to walk out with their purchases after a small down payment, paying the rest over time. BNPL is more consumer-centric than layaway (where you didn’t receive your purchase until it was paid for overtime).
BNPL > Credit Cards: BNPL's edge over credit cards lies in its flexibility and ease of use. With no interest fees and minimal credit checks, BNPL appeals to consumers who don’t want to be burdened with high-interest credit card rates. The merchant likes this model because they see the full payment up front from the BNPL vendor.
Digital Popularity: Unsurprisingly, BNPL has quickly gained traction on the digital front, with over 50% of the top 1000 online retailers offering BNPL in addition to other retail payment methods, including e-commerce stalwarts like Amazon, Walmart, and Apple leading the way. This is a significant increase from just a few short years ago (in 2020) when only 28% of these same retailers had BNPL.
Implementing Buy Now, Pay Later at Your Stores.
Integrating BNPL into your brick-and-mortar stores is a strategic move that can significantly enhance the customer experience and increase basket size (to the tune of 25%). With the right approach, BNPL retail payment solutions can be a game-changer for your brick-and-mortar locations. Here are some key steps to leverage BNPL technology effectively in your store.
1. Train Your Staff on BNPL Benefits and Process: Ensure your team is well-versed in how BNPL works and its benefits. They should be able to explain it clearly to customers, highlighting the flexibility and ease of payment it offers.
2. Promote BNPL at Point of Sale: Use signage and digital displays at checkout counters to inform customers about the BNPL option. Clear, visible promotion can encourage last-minute decisions to opt for BNPL, increasing average transaction values.
3. Integrate BNPL with Your POS System: Work with BNPL providers (Klarma, Affirm, PayPal, etc.) to integrate their service seamlessly into your existing point-of-sale system. A hassle-free checkout process is key to customer satisfaction.
4. Offer BNPL for High-Value Items: Specifically target high-value items or sections in your store for BNPL promotions. This encourages customers to make significant purchases they might otherwise defer.
5. Monitor and Analyze BNPL Data: Track the performance of BNPL sales to understand customer preferences and buying patterns. Use these retail data insights to adjust your marketing and sales strategies.
ReStore for Retail is an independent operating unit of Hilco Global, one of the world’s leading retail authorities. To learn more about ReStore for Retail’s tech-enabled solutions, please visit www.restoreforretail.com.