Buy now, pay later isn’t just an addition to add to the checkout – it’s a feature that’s changing e-commerce structure and strategies. As well as offering shoppers more flexibility and diversity on the payment page, BNPL can transform the way retailers interact with their existing and future customers.
Here, we count down some of the ways you can use buy now, pay later to differentiate your business and offer something new and appealing to your target audience.
Attract new customers
BNPL is a tool that can be used for acquisition across different target markets and demographics.
Buy now, pay later appeals most to younger consumers: almost 75% of BNPL users in the U.S. are Gen Z or millennials according to a 2021 study. However, as other age and income groups are increasingly leveraging BNPL, Gen X and baby boomers are expected to account for about 30% of all users by 2025.
There are many ways that BNPL can help businesses appeal to different customer profiles. An existing card-based platform like Splitit can help younger consumers build up their credit without the need to take out an additional line of financing.
It’s also a great way for more financially-established customers to simplify their payment portfolios while leveraging the existing power of their credit card.
Appeal to a modern mindset
The recent climate of extreme uncertainty that we’ve all been living through has impacted our processes for making certain decisions – including the way that we approach new purchases. BNPL has introduced a whole new layer of freedom to the way customers budget their finances when shopping for goods and services.
The ability to pay in installments and break down the cost over time empowers shoppers to be more flexible when it comes to when and how they spend their money. With Splitit there’s no need to take out an additional line of credit or loan, which means customers are simply able to do more with the credit they already have.
This allows retailers to help their customers find a solution that suits their budget while adhering to responsible lending practices.
Increase AOV
The nature of BNPL means that big-ticket purchases become easier to budget for, as customers can divide the cost over a longer period of time.
This serves as a huge value prop for businesses that operate on higher price points, as retailers can offer their customers more flexibility when it comes to paying for large orders or high-cost services – such as how Splitit helped fashion retailer Vestiaire Collective to improve global sales and drive higher AOV through the power of BNPL.
As a result, retailers can expect to see a higher average order value on purchases made through BNPL. With Splitit, AOV can be even higher as there’s no need for customers to apply for a new loan – the limit they’re able to borrow is determined by the available space on their credit card.
Encourage retention
When BNPL is implemented correctly, it can create a positive user experience that builds brand affinity and makes customers more likely to return. The key is to integrate buy now, pay later seamlessly and simply as possible, to reduce friction at the checkout and keep customers on your site and on track with their purchase.
Splitit’s white-label solution is a great way to achieve this. Every aspect of the experience lives within your brand and your ecosystem, so there’s no need to introduce a new brand or confuse customers at the most pivotal part of their journey. And, after a successful transaction, you get the credit for providing a diverse and flexible payment experience!
Build loyalty
Incorporating BNPL on your site means you’re making the entire buy now, pay later ecosystem part of your brand, which is why it’s important to consider the way BNPL providers handle customer data and how this could impact brand loyalty.
Many big buy now, pay later platforms including Afterpay and Klarna will retain customer data and use it for remarketing purposes, which is something that can create a negative association with your brand (and provide your competition with your customers’ information). Splitit does not sell customer data or use it for any marketing purposes, which means customers are protected from potentially irritating ads and retailers are able to retain and protect their own data.
New options for B2B and services
BNPL has traditionally been utilized for e-commerce and retail transactions, but there’s a huge scope of opportunity to leverage buy now, pay later in B2B arrangements and service agreements.
Installment agreements between providers have often been laborious and admin-filled processes that take a substantial amount of time and resources to figure out.
With BNPL, this process becomes streamlined and simplified. Splitit’s existing-card based platform means that organizations don’t need to complicate their finances by taking out additional credit or loans. Learn more about how BNPL works for B2B and services.
Give customers what they’re looking for
As well as opening up your business to new opportunities for acquisition, retention, and marketing in general, implementing a buy now, pay later platform ensures you’re delivering what customers are already looking for.
A 2022 study reported that 59% of shoppers said they were likely to use BNPL in the next 6 months, indicating that it’s not only something that appeals during the decision-making process, but it’s a service that the majority of people are thinking about ahead of time and looking to leverage.
Incorporating BNPL into your strategy ensures that you can stay competitive and provide value to your audience. With Splitit’s white-label solution, you can create a frictionless checkout experience that allows customers to maximize their existing finances to suit their budget. Learn how to get started today.