At the start of 2020 the term ‘lockdown’ was pretty much confined to the pages of sci-fi novels, it certainly wasn’t something that society and business was used to coping with on a regular basis.
Both, however, have had to quickly adapt.
‘Stay at home’, ‘essential journeys’ and perhaps more importantly ‘buying online’ are phrases that will likely play a significant role in our lives throughout 2021.
While lockdown comes with its challenges for many, certain corners of the retail sector are grabbing hold of the significant opportunities that these moments fuel. Demand for products within the hobbies and interests sector, gardening, as well as sport and leisure, for instance, is coming from the captive audiences that lockdown provides.
Alongside this growth in demand comes more customer exposure to retail finance for those merchants with this technology already integrated into their online shopping experience.
The stats that show the spike
There’s evidence to support the claim. Team Deko recorded more than a 50% hike in retail finance application volumes within our merchant community when #LD1 hit back in March 2020.
Retail finance lending peaked for the home improvement sector in the three months of lockdown in 2020 – April, May and June, then eased off as the restrictions lifted in July and into autumn.
And now, as we find ourselves engulfed in another lockdown that could last for months and even be the first of many in 2021, how are merchants better equipping themselves?
What does 12 months of experience teach the retail world in terms of optimising performance in 2021?
What it all means for retail finance
Retail finance, when offered, helps to breakdown larger ticket items and increase basket sizes but there is still a need to explain how it works and enable customers to feel comfortable enough to use it.
If businesses are to optimise their performance during lockdown they have to ensure that the tools at their disposal are being clearly communicated and explained to those visiting their site.
The increase in website traffic will undoubtedly bring a proportion of customers who are new to retail finance – our own figures are a testament to this. So, in peak times, what are you doing to minimise confusion, anxiety and doubt for consumers who might be interested in a buy now pay later option?
We see all too often merchants layering multiple finance providers in front of the consumer all the way through the shopping experience.
Confusion will breed doubt, so keep the offering simple and straight forward. Step-by-step guides that show customers how to buy now pay later and the implications of doing so are recommended, as are links to retail finance providers so consumers can verify authenticity. Dedicated pages on the website that carefully outline what the customer is agreeing to will help those new to finance feel at ease.
And, from an aesthetic point of view it pays to invest time and effort in ensuring that the messaging for finance is presented in the right way. For our merchant clients we offer mock-ups of banners and overlay web messaging to help work out the most effective way to attract visitor attention without over-burdening or impacting the online experience.
Here are a couple of extracts from recommendation documents that we recently provided for new merchants:
“Homepage banners ensure online visitors know finance is available as soon as they hit your website, impacting how they browse your website. We advise adding banners with a click through to the finance information page.”
“A great way to ensure customers are aware that finance is available is by adding a ‘finance’ tab to your
navigation bar with a click through to the finance information page. This will ensure customers are aware that finance is available whilst providing the prospective customer with compliant and informative information.”
Stacking up against the competition
There’s no doubt that clearly defining finance as a payment option is a critical first step in increasing its usage during times of high demand, but how does your finance offering stack up against the competition?
Another important way that Deko supports all new merchants when they on-board new technology is with sector-based benchmarking. Our bespoke merchant research takes a top-level view of the marketplace, helping you to understand the finance offerings that drive the best results.
Small changes to deposit levels and rates can have a significant impact on application, basket size and, of course, sales. There’s more on increasing application success in our recent blog.
Lastly, consider the impact of qualifying consumers for credit within seconds at the start of their shopping experience. So, before they even get to the point where they need to apply for finance, they understand the extent of their financial boundaries. Eliminate the anxiety associated with a full basket and a lengthy approval process for the credit to pay for it.
Let customers make informed decisions and have the confidence to shop in full knowledge of how they are able to pay.
Deko’s Will I Qualify technology does just this and doesn’t leave a blemish on credit scores.
If you want to find out more about Deko and how we partner with our merchant clients to help them increase performance, send a few details to us via this form.
Whatever the rest of 2021 throws at the retail industry we are helping our merchant community strategically increase visibility around retail finance - making sure that surges in demand quickly translate to increased revenue and profitability.
New to retail finance? Read more about our products here and request a call with one of our experts.