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With consumers spending on the increasing towards the start of the year, and the popularity of online shopping continues to increase across all age groups, merchants face both more potential and greater competition for the dollars of consumers. It is essential to find innovative ways to cater to the demands of customers and giving them more reasons to shop your brand or site. One of the best places to start is the checkout process -- identifying opportunities to both streamline this important last step in the sale and provide the option of payment to your customers to enhance their shopping experience.
One of the trends that has rapidly grown in popularity for online purchases has been the "Buy Now and pay Later" (BNPL) option at checkout. BNPL is an alternative payment method that allows shoppers to divide the price of their purchase into low-cost installments which are distributed over timesometimes in a couple of weeks while in others, it's spread over several months.
Pay later, buy now is gaining popularity
A growing number of consumers are making use of pay-over-time payment options in the event that they become readily available. In 2023, merchants on the internet saw a significant rise in the number of purchases that were made using BNPL, with the volume increasing by 42.5% from year to year. As a result, BNPL put some $16.6 billion on merchant books over the course of the final 2 months in 2023 alone -- a trend that Adobe expects to continue until 2024.
Roughly 93.3 million consumers will be using BNPL by 2024, according to EMarketer and American Banker reported that the BNPL market in the US may reach as high up to $8.3 billion by 2028. BNPL is also being used more and more by online retail giants like Amazon.com -- further accelerating its growth and making the choice more accessible to those who shop on the internet.
This means that BNPL an option merchants must consider when competing in an increasingly crowded online market.
Offering buy now, make payment later: Some things to consider
The addition of BNPL choices at checkout earlier rather than later offers retailers more opportunities to attract new customers as well as establish a long-term relationship.
For merchants that don't yet offer the BNPL option when they checkout, this could be the perfect opportunity to introduce one into the list of options. In the case of merchants that do offer it, placing the BNPL option prominently displayed on their websites, specifically during checkout or by announcing its availability through marketing, could help make their brands stand out and increase the shopping experience for their clients.
The more visible the BNPL option is displayed on the site of a retailer and the earlier they promote the feature via emails and on social networks, the more likely customers will want to learn more -- helping the seller bring more customers to their site to close the transaction.
BNPL will allow merchants to expand the reach of customers who want to buy today, but also want to control their cash flow without using credit. With the ability to split the cost of a purchase into for instance, four installments of interest-free payment each two weeks, buyers have the ability to get their needs without delay. A few BNPL providers, such as Affirm, also offer longer terms of a few months or even 3 years for carts with large sizes or expensive products.
When adding a new payment type to the back end of an online store may appear daunting for smaller businesses who are already working on their time However, there are alternatives readily available for quick and straightforward installation that will simplify the whole process for the merchant. For example, merchants are often able to take advantage of pre-built ecommerce integrations, such as the AffirmPayments extension, to easily add the BNPL option to their current checkout experience.
Advantages of offering buy now, pay later on your Woo store
What benefits can the BNPL integration provide? For one, using an integration can streamline the purchasing procedure for the increasing variety of shoppers who would prefer to pay over time. Making sure that customers are on your website as they move towards your checkout page is also important, especially with younger consumers who are accustomed to internet-based shopping. Actually it is reported by it is reported by the National Retail Federation reports that more than 50% (46 percent) of Gen Z respondents consider a effortless checkout process to be essential for their shopping experience.
One of the most important aspects to consider for integration is the user experience for the buyer. It's crucial that the buyer has the ability to see their payment options as well as go through the process of approval without being required to navigate to a different site. By using an integrated system, retailers ensure that the transaction is as easy and easy as they can for customers, ensuring that the choice doesn't get in the way of making a sale.
A seamless checkout experience can assist in reducing abandonment of carts. An earlier Baymard Institute metastudy of 49 reports found that cart abandonment rates still hovers around 70 percent but hasn't drastically changed within the last decade. The top reason for abandonment: A checkout process that was too long or complex (22 percent of times) and also the site didn't offer sufficient payment options (responsible to 13% abandonments). By integrating a tight BNPL system, merchants are able to solve both customers' concerns in one go.
How to choose a buy now or pay later option?
Picking the BNPL service that is compatible with your needs as a business and with customer requirements is a crucial aspect to determine the most suitable solution. Affirm, for instance, Affirm provides custom payment solutions for merchants -- these can include the short to the long-term as well as the option of 0% APR. Offering the right payment option that is in tune with customer needs and typical price points, merchants can increase affordability for consumers and even gain a customer over the competition.
One of the unique features offered by Affirm is the Adaptive Checkout technology, which gives you the most pertinent ways to pay your customers depending on the item's price point and the total cart value. With personalization the name of the game online, Affirm tailors the term duration and APR for each purchase -- delivering several appropriate options for paying over time to the customer, in an easy-to-use user experience.
What can you do to let your customers, both current and future, inform them about the BNPL option before checkout? Based on the market you are targeting You may wish to consider promoting it via social media sites. Retail Dive states that 83% of the customers' purchase choices are influenced through social media. Therefore, advertising the possibility of offering BNPL through those channels could be an edge. In case you're trying to reach Gen Z be aware that 45% of respondents have cited TikTok as well as Instagram as top apps in influencing their purchase purchases.
As summer can be a slow time for businesses and businesses, it's a great time for merchants to focus on getting BNPL operational on their websites, ahead of when the Back to School rush signals the start of the hectic period leading up to winter holidays. It gives them the opportunity to think carefully regarding vendors, resolve any technical issues as well as launch the marketing efforts to announce the introduction to BNPL as a fresh payment method that is available during checkout.
The availability of the BNPL option at checkout and publicizing it on social media could make a difference for businesses looking to get more online spend--and outplay other merchants.
Are you ready to include flexible payment options to your online checkout? Apply to Affirm for a start and use the Affirm Extension for Payments to provide payment-over-time options through your checkout.
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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 by these lending partners: affirm.com/lenders.