To say that e-commerce has been transformed in the past two years would be a vast understatement.
Digital sales volumes ballooned. Businesses raced to shift their operations online. A vast array of new payment methods – from digital wallets to installment payments – became standard fare at e-checkouts. And while volumes have slipped from their peaks with the return to brick-and-mortar shopping, analysts see strong growth ahead. Retail is not going back to the way it was.
It has been nothing short of a revolution, one driven as much by customers as by retailers. Denied the freedom to shop in person by pandemic-related restrictions, shoppers seemed increasingly inclined to demand freedom online.
Choice is now king, particularly when it comes to payment options. Customers who want new ways to pay beyond traditional credit cards and PayPal have flocked to buy now, pay later (BNPL), which allows them to spread the cost of a purchase over the space of several weeks.
A Superhighway to Revenue Growth
Retailers who offer BNPL report significant increases in key metrics, including aggregate revenue, conversion rates, average order value and return visits. And since shoppers have come to both demand and expect choice, those that offer more than one have only amplified these benefits.
According to 2020 data from BNPL provider Zip, 60% merchants offering BNPL in Australia – an early adopter of the payment option – offer access to more than one provider. The number is even higher in the beauty and personal care sectors.
And this has yielded benefits. Some 91% of the retailers with multiple providers at checkout saw positive changes, including rising conversion rates and growth in new customers. Fully 42% reported an increase in overall sales.
At Optty, we’ve seen first-hand evidence of the benefits having a rich BNPL offering can yield. One of our retailers boosted its sales overnight by 40%, simply by going from one to three lenders.
Having an array of options can make a retailer look more flexible and up-to-date than competitors while providing insurance against the possibility that a provider might run into financial issues or that it can’t or won’t approve a given shopper.
It’s clear that offering multiple BNPL providers gives a powerful benefit to retailers. So why are customers also demanding a range of choices?
Research suggests that many simply want the same ability to shop around that they have with the products they buy. They want to compare and contrast such factors as sign-up incentives, fees and repayment schedules before deciding which provider would work best with their habits and lifestyle.
This is particularly true for younger shoppers, BNPL’s most enthusiastic advocates. As digital natives, Millennials and Generation Z have grown up expecting that online retailers will meet their needs quickly and conveniently.
According to Optty’s proprietary data, 16% of BNPL users investigate two providers before using a third to check out. That’s 16% of shoppers who might have gone on to buy the item they wanted from another retailer if they’d only found one, or completely abandoned their shopping cart when faced with paying in full.
Higher revenues, greater customer loyalty and satisfaction, increased conversion rates, a buffer against default risk – with Optty, retailers can tap into all these benefits quickly and easily via a single integration exercise. Vendors simply connect using their preferred e-commerce platform and go through a straightforward integration. From then on, they can switch on each new BNPL and next gen payment provider they wish to add in a matter of minutes.
With over 200 global integrations with 50 BNPL solutions, including Afterpay, Affirm, Atome, Grab, Klarna, Scalapay, and ShopBack PayLater, Optty is all about options. It’s in the name, after all.