How big is too big? In the case of baskets at checkout, there’s never a size limit. That’s because large basket sizes are the name of the game for retailers that want to encourage their customers to spend on big-ticket items. But how do you get customers shopping with more confidence to make expensive purchases? In this guide, we’re looking at how flexible finance is one of the best ways to ensure your customers spend more at checkout.
The problem with basket sizes
Along with cart abandonment, basket sizes are one of the biggest problems faced by merchants. Ideally, retailers would see big-ticket items fly off their virtual shelves. However, too often, customers are restricted by what they can purchase because of a lack of financial options at the checkout.
This leads to smaller purchases or, even worse, cart abandonment. One is significantly worse for merchants than the other, but even smaller purchases can come with their frustrations. Therefore, there’s a need to support customers to make larger purchases, but doing so requires more flexibility.
The consumer journey for big-ticket items is an entirely different experience than the one for everyday purchases – it requires a new approach to gain customer trust and empower them to make those expensive purchases.
What’s the solution?
There are several ways you can encourage customers to spend higher volumes with your business on those larger-priced items. But the primary method involves offering flexible finance to create a seamless shopping experience.
Alternative payment methods like buy now, pay later, and digital credit increases the range of options customers have at the checkout stage. Buy now, pay later, for example, allows them to spread the cost over four separate payments without incurring any interest.
Flexible finance provides freedom, with options like eWallets, the favoured purchasing method for many consumers online. The more flexibility you offer at checkout, the higher the chances of seeing an increase in sales for bigger-ticket items.
Why do customers prefer flexible finance?
Debit and credit cards have long been the golden standard in payments, both online and in-store. However, with the advancement of technology, consumers are now finding they have access to an increasing number of ways to pay.
Some of the most important buying demographics, such as millennials, are actively seeking alternative payment methods when they shop. Around 60 per cent of millennials are already using buy now, pay later to buy items, thanks to its zero interest and flexible repayments capabilities.
It’s no longer good enough for customers to pay with one single method (no matter their age). Instead, a fluid payment system is required to meet the needs of modern-day consumers, and businesses that don’t adapt run the risk of being left behind.
How does flexible finance help merchants?
What’s good for customers is also beneficial for merchants. Offering flexible finance at checkout will lead to more conversions, with merchants like Steven Stone – a high-end jeweller – seeing a 30 per cent increase in sales when it switched to flexible finance options.
As well as increased conversions, you can also expect to see an uptick in customers purchasing from your business. People actively seek out brands that provide them with a range of options at checkout, and flexible finance is a great way to boost numbers while seeing higher acceptance rates on finance.
Alternative payment methods are particularly important in the aftermath of Covid. At Deko, we saw a 50-plus per cent hike during the first lockdown, as customers spent more time shopping online while simultaneously becoming more responsible with their finances.
Having flexible finance in place safeguards merchants and shows they’re willing to adapt to market trends as they happen. It puts the customer first, which will help build trust while giving them more ways to pay.
Different types of finance
Flexibility is key for offering a better checkout experience that leads to big-ticket sales, but what are the different options you can give customers?
Monthly payment options allow customers to spread the cost of their purchase. It’s easily manageable for them, and they can keep track of what they owe and when it’s due. If you have a multi-lender working in the background, the chances of acceptance for methods like monthly pay increases considerably.
Pay in 4
Pay in 4 offers buy now, pay later finance options for customers. And, most importantly, it’s interest-free, which is hugely beneficial as consumers can manage their finances without incurring interest on purchases. Pay in 4 requires the buyer to pay back the price of the purchase over four separate instalments.
An increasingly popular finance option, digital credit is a simple and flexible way for customers to pay for higher-priced items up to £2,500. They can split bigger buys into smaller payments and enjoy a straightforward way to pay back the purchase price.
Summary: big-ticket winners
With more options available, customers can increase their spending power and won’t be afraid to get the items they usually disregard because of price. Offering flexible finance makes a considerable difference to the purchase size at checkout, and you can increase sales for big-ticket items while gaining more customers by providing smarter ways to pay.