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How Installment Plans Give both Shoppers and Businesses the Edge on Technological Trends
In a constantly evolving world, keeping up with the latest technological trends and electronic gadgets is somewhat of a financial race. The list of the latest and greatest seems to grow longer by the day. From the latest smartphones, headsets and speakers, to wearables and smart televisions and laptops — there is no shortage of electronic devices or technologically advanced items we have access to.
Additionally, as more people pivot to work from home, attend school, or set up their own businesses all from the comfort of their couch, investing in the latest technology has become mandatory in order to keep up. For some families, it’s not only a desire to purchase portable electronics, it’s practically a requirement or risk falling behind.
But investing in electronic devices and the latest technology is not always financially easy for shoppers. Shoppers are still reeling from the effects of COVID-19, and the impact to our lives and wallets. This is where installment plans, such as Splitit, offer shoppers greater flexibility and businesses the opportunity to grow.
As enticing and thrilling as innovation can be, it can also leave us dizzy with the constant tug on our brains and wallets. Let’s look more closely at how Splitit gives both shoppers and businesses the advantage when it comes to taking on the technological trends.
How installment plans benefit shoppers
Buy Now Pay Later, or BNPL, offers numerous benefits to shoppers. These benefits are even more valuable when used for high-ticket purchases such as electronics and technology.
Allows shoppers to budget accordingly
The average price paid for a laptop in 2019 was $733. For many families and businesses, this is an expense equivalent to a mortgage or rent payment, or a month’s worth of groceries. Yet as the world came to a screeching halt in 2020 and students (and parents) had to learn to work remotely, the need for electronic devices like laptops became paramount.
A $733 purchase is more manageable to a budget when you can break it into smaller, monthly installments. This allows shoppers to budget accordingly each month.
Breaking payments into installments may be just the tipping point needed for shoppers to spend more for a quality item, such as a laptop with faster processing speeds or more memory. The right monthly installment plan allows the shopper to not only afford a higher quality item, but also stretch a bit and get something previously out of reach.
No additional interest or fees
Another benefit for shoppers when using Splitit installments is not having to pay any additional interest or fees. Splitit works with a shoppers existing credit card. Because the credit line is already established, there is no additional paperwork, additional interest, or monthly fees. Using Splitit literally costs shoppers nothing, and yet it frees up a large amount of room within their budget — and their cash on hand.
Because Splitit does not charge additional fees, it is another example of how responsible a shopper can be with a purchase. They do not have to take on new debt, but rather have a sensible way of paying for a larger technological purchase.
Shopper’s credit score is not impacted
While store credit cards are possible to use for these larger electronic purchases, applying for another credit card does impact a shopper’s credit score. When a shopper gives permission for a lender to run a credit check, this produces a hard inquiry on the consumer’s credit report. These inquiries may stay on a report for up to two years and have the potential to lower a score.
Because Splitit uses existing credit, a shopper does not need to worry about the application causing an inquiry or mark on their credit report. The shopper simply adds the Splitit option during the checkout process, selects the number of monthly installments, and continues with the normal steps for the checkout.
Splitit is a company that has been dedicated to financial responsibility from day one and has built its payment system as a consumer-friendly, frictionless payment option that requires no additional credit checks or applications from shoppers.
How installment plans benefit a business owner
If you’re a business owner, it helps to see as much from your shopper’s perspective as possible. You can see from the benefits mentioned above how a BNPL like Splitit can help them make larger technology purchases and stay within a reasonable monthly budget. And we all know the latest gadgets tend to hit us right in the wallet.
But what does this mean for you, as an e-commerce or brick and mortar store owner (or possibly both)? How many benefits do you see from adding Splitit as a payment option for your shoppers?
Turns out, there’s quite a bit.
Higher order value
When it comes to e-commerce, there’s quite an emphasis put on average order value, or AOV. This is a metric that simply indicates how much a shopper spends when they’ve completed the checkout process on your site.
Naturally, the higher the AOV you obtain, the more revenue you bring in. And while it sounds easy in theory, convincing your shoppers to spend more money with you is easier said than done.
This is where Splitit makes a difference. After multiple case studies and working closely with business owners, Splitit has shown a 20% increase with AOV when a business offers it as a payment option to their shoppers. This means the shoppers are spending 20% more than previously, simply by offering this convenient option.
Higher AOV equals higher revenues for your business. And when you have more money coming in, you can use it to invest in better technology for your business and shoppers.
Higher conversion rates
AOV is not the only metric that keeps e-commerce owners up at night. Conversion rates are another major metric, and rightly so. Conversion refers to taking someone from browsing all the way through the purchase process. Getting someone to go from “just looking” to a full-fledged purchase is no easy feat, but there are ways to increase your odds.
If someone is purchasing an item, such as a pricey electronic device, offering the option to pay with Splitit may be just the competitive edge your business needs to convert the browser to a buyer. Since tech and electronic devices are available from numerous sites and shops, Splitit is yet another way to set you apart from the competition.
Other businesses have seen the benefit with Splitit too. For instance, Omnipemf, which is a wearable PEMF (Pulsed Electromagnetic Field Therapy) technology offering for personal health management, also began offering Splitit for their shoppers. Their shoppers wanted to invest in the technology, but needed affordable payment options to do so.
Once Omnipemf offered Splitit, the company saw a 17% decrease in cart abandonment and a 5% increase in conversions. By allowing shoppers the opportunity to pay with Splitit, they can invest in technology that may be out of their reach. As a result, Omnipemf saw a difference with its bottom line.
Greater customer loyalty
Another major benefit to adding Splitit as a way to pay for large electronic and technology-driven purchases is the increase in customer loyalty. Splitit has surveyed hundreds and found 85% of shoppers would return to a store because it offers an installment payments solution.
When you are offering a solution that impacts your shopper’s wallets on a big purchase, the shoppers will remember it the next time they need to purchase something else your business offers.
In the competitive technology sector, offering Splitit gives your shopper greater buying power. In turn, you are rewarded with greater customer loyalty and satisfaction.
Allows a business owner to invest in technology
Splitit offers benefits for both your business and your shoppers. But it’s entirely possible you could benefit as both the business and the shopper.
By using Splitit as a business owner, you can purchase your own electronic needs to support your business. For instance, if you need to invest in new laptops or larger monitors to run your business more efficiently. If you are unsure about tying up your capital with these purchases, you could benefit from Splitit with the monthly installments too.
Staying ahead of technological advances or the need for smart technology is its own unique challenge. But whether you find yourself in a position as a shopper or a business owner, Splitit offers a smart payment solution to manage the rising costs that accompany these types of purchases. While Splitit can’t guarantee you will finally get your hands on the latest smartphone, Splitit does offer a way to responsibly pay for one if you do finally snag the latest and greatest.
If you’re a shopper, you can rest easy knowing you have a way to afford the electronics that are usually out of reach. And if you’re a business owner, you can rest easy too knowing you are offering a smart payment solution that has been shown to increase your revenue and shopper loyalty.