Improve Conversion in the Luxury Apparel Industry
In January, Luxury Society made a number of predictions regarding luxury brands and the industry as a whole. Specifically, they suggested that 2015 would be another challenging year for companies selling luxury goods. Not every prediction has materialized but one thing is certain: people and companies that sell luxury products need an edge to improve sales this year and beyond.
The Problem: People Don’t Need Luxury Apparel
When it comes to people’s wants and needs, luxury apparel definitely falls into the “wants” category for most people, the exception being those few who need to look sharp for work. But even those people who need to flash the logos of high end brands in their clothing and accessories to present a particular professional image do not need a limitless wardrobe and can often get by with a few timeless accessories to dress up an outfit.
The bottom line is that the economy scares people into being more conservative with their spending. Even when things are good at home, people think of their mortgages, car payments, cell phones, meals, retirement and other necessities before they think about ways to improve their quality of life. Although this is responsible behavior, and even a necessity for some people, it can be taken to the extreme when moderation and proper cash flow management would enable people to live more comfortably in the here and now, without sacrificing more than necessary. So how do you sell your customer that Patek Philippe timepiece that he wants to show off, or that Fendi handbag that helps her make a statement at her next social event, or that Hermès scarf that matches what she’s wearing today oh-so-perfectly? Read on!
The Solution: Installment Payment Plans With Splitit
People hesitate to make expensive purchases because a large cash outlay can be intimidating, even to people of means. One half of a couple with shared expenses may already have a mental image of their spouse’s reaction to the purchase, or the conversation they expect to have later in the day explaining it. A corporate executive may weigh the choice of making the purchase against investing the cost of the item into his or her stock portfolio or retirement fund for future security. And without a little help, a salesperson may not be able to overcome these objections quite so easily.
Splitit is a powerful sales tool for luxury apparel and accessories. Once you enable it on your ecommerce website, this solution enables people to make large purchases in installments, using their existing Visa or Mastercard. The API works with any website, and there’s even a Magento installment payment extension you can install. On each purchase, the ticket price is simply authorized on their preferred credit card, and each installment then billed, with the balance of the purchase reauthorized on a monthly basis until the item is paid off in full. Merchants even have the opportunity to collect the entire sum up front from Splitit for a small fee, while the customer continues to enjoy their monthly installment plan, and can even do so interest-free, all while earning points and rewards with their credit card providers. These are all great reasons for making a purchase with Splitit rather than using a credit card in the traditional sense, and a talented salesperson will be able to frame these benefits in a way that helps the customer see the logic and understand enough about how it works to explain it to others. Overcoming objections becomes much easier, and you get the sale. This can even be done on an ecommerce website, either through live chat or the website messaging. How do you overcome a few common objections? Let’s take a look.
I Need to Talk to my Husband or Wife
This is a common excuse for avoiding a purchase in a bricks and mortar environment. Sometimes the customer has no real intent to buy and it’s an easy way out. But if this objection does in fact have merit, then overcoming it is very straightforward. Ask the customer if a fraction of the cost of the item can be spent in a given month without raising any red flags with their other half. If the answer is no, then you might be at a dead end. But if the answer is yes, then show the customer how they can think of it as a series of smaller purchases on a monthly basis. With Splitit this is very plausible, because the purchase can be made without accruing any interest charges since the balance is simply reauthorized on a monthly basis, rather than charged up front at the time of purchase. Perhaps the customer has a hobby or weekly poker game where they spend an amount of money that’s equivalent to a single installment payment. The installments on this larger luxury purchase could then be compared to whatever their weekly activity might be. Certainly one could make the same comparison to their spouse and show how breaking up the purchase over time won’t have a major impact on their overall cashflow.
I’m Saving For Retirement
Saving money is great, and everybody should get into the habit of putting money away for retirement and emergencies. But what’s the point of having money if you never get to spend it? With Splitit, a fiscally responsible person can continue to save towards retirement, or investing in their stock portfolio every month, without any major impact. The purchase is spread out over a number of months, and this frees up plenty of budget to continue saving, with the added benefit of being able to enjoy the present day. If you’ve got a website where you sell luxury goods, then put up an article or blog post on saving for retirement. Show people how they can buy the things they want on your website, and because it’s Splitit-enabled, they can do so in installments that have a minimal impact on their monthly savings plan. Add a few lines to your FAQ and link to it from your product pages.
I Want It, But I’m Not Ready to Spend So Much At Once
This is perhaps the easiest objection to overcome. Splitit was designed to help people manage cashflow, so that they don’t need to spend everything at once, and can now enjoy many of the things they want, rather than waiting until they’ve got enough savings for their purchase. With an installment plan, you don’t have to spend so much at once. You get the item today, and you pay for it over the next several months, interest-free.
Luxury Apparel & Installments – A Perfect Pair
It’s easy to see how an installment payment plan will help customers make the decision to purchase those things that they really want, rather than saving and waiting longer than necessary. Think about some of the other objections you hear as a salesperson, and how you might counter them with Splitit as an option you can offer to your customers. If you see how it can help you improve conversion and to increase average ticket size, then sign up for free and start offering this payment solution to your customers right away.