One of the biggest challenges facing merchants right now is cart abandonment, with the current rate sitting at around 70%. The cost-of-living crisis is likely to push this figure even higher, so retailers must find ways to lower the number of potential customers dropping out of the purchase journey. One solution involves offering flexible finance, like buy now pay later (BNPL). Here, we look at how offering BNPL solutions at checkout can help your eCommerce store reduce cart abandonment and increase sales.
How BNPL can reduce cart abandonment (in short)
- It eases the financial pressure on customers making a purchases
- Has the ability to increase the no. of customers shopping with your store
- Its flexibility removes friction and gives consumers greater choice and control
- It empowers shoppers to buy more of the items they really want
4 reasons why buy now pay later solutions help reduce abandonment
Eases the financial pressure on purchases
The number of customers putting items in multiple shopping carts and comparing prices with different online stores is on the rise. As a result, eCommerce stores find themselves needing to be competitive and doing more to encourage shoppers to hit that ‘buy now’ button on their store and not someone else’s.
Leveraging flexible payments like BNPL is one way to get customers from browsing to buying. This is especially true for big-ticket items, where the upfront affordability factor is even more apparent. Shoppers who can spread the cost over several months are more likely to transact on higher-priced purchases or buy more because they’ve got the flexibility to pay the amount back on their terms.
Increase the number of customers at your store
Buy now pay later is becoming increasingly popular with important buying demographics like millennials and younger groups, such as Generation Z.
These demographics typically want more freedom of choice for how to pay, so offering BNPL at your eCommerce store is a smart way to increase customer numbers. If they see you offering their preferred payment method, they’re more likely to complete the buying journey with you while telling others about your store and its range payment options.
Eliminates friction through flexibility
People in the UK are feeling the pinch and customers are choosing to postpone larger purchases. For many people, the financial burden of paying for a high-ticket item in one go is too much. BNPL, therefore, provides an important alternative and allows customers to bring forward important purchase decisions. This is because having the flexibility to spread the cost over several instalments alleviates some of this monetary burden and gives customers greater financial confidence.
When shoppers can pay for an item on terms that suit their financial situation, they’re more likely to complete the purchase. This is why flexibility in terms of payment can be so important in reducing your business’ basket abandonment rate.
As well as giving customers more flexibility, BNPL can empower them to buy more of the items they really want. For instance, a customer may have had reservations about buying a diamond engagement ring, and may be thinking of choosing a cheaper alternative. But knowing they can pay it back over several instalments allows them to buy the item they really want.
Shoppers feel confident spending more if they know they’re in control of the repayments. Instead of worrying about when and how they’ll repay an item, BNPL gives them set payments that they can budget for and pay off relatively quickly compared to other types of credit. This empowerment not only increases conversion rates but as demonstrated above can boost average order values.
Selling more with BNPL
The increased popularity of buy now pay later is an indicator of how times are changing and the ways in which people are ready to embrace new methods of paying. For businesses, it offers you the chance to get ahead of the curve and be seen as a forward-thinking eCommerce store offering payment options its customers desire. The result will be fewer consumers dropping off at the checkout stage, giving you the chance to turn some of that 70% into more customers.