Buy Now, Pay Later Boosts Small Retailers
As the pandemic continues, online retail purchases have been skyrocketing as consumers have shifted from in-person shopping to using eCommerce sites. According to recent data, U.S. consumers have spent approximately $347 billion at eCommerce retailers within the first six months of 2020, whereas they spent $267 billion during the same period of time in 2019.
But who is really seeing the benefits of this windfall? Large retailers, like Amazon, have the infrastructure to keep up with this demand and have seen record sales this year as a result. Small- to medium-sized businesses (SMBs) do not have the same framework and are feeling the weight of increased competition and have fewer resources than their much larger competitors to draw upon. Enter buy now, pay later (BNPL) solutions which can encourage higher sales and give SMBs a brighter future.
BNPL Helps Small Retailers Stay in the Game
Considering this new challenge, small eCommerce retailers are discovering how to leverage this new BNPL option to not only boost customer engagement and loyalty, but also add to their own bottom lines. Installment payments allow customers feeling the stress of the economic decline to pay off their purchases over time while providing steady revenue streams for small businesses that keep them afloat. And BNPL can help SMBs compete with their larger counterparts with lower price points by reducing the upfront cost.
Markesha Tillman, founder of The Slay Brand, a women’s eCommerce clothing business, first learned about BNPL services about two years ago. “After reading up on it, I thought this would be something my customers would be interested in,” Tillman said. After signing up, Tillman integrated her system with BNPL payment options and quickly promoted the flexible installment options via email and social media to her customers and prospects.
The Slay Brand’s sales have climbed nearly 40 percent since Tillman began offering BNPL payments and sales have been further buoyed by the recent surge in online shopping, she explained. Average monthly sales have quadrupled for the company during the pandemic. “This year will probably be the biggest year for me in sales,” Tillman said.
Why Should SMBs Take Advantage of BNPL?
BNPL offerings have proven to increase the average order value by placing items within financial reach for customers who would have probably abandoned a purchase because of the high ticket price. Tillman noticed that her customers who use BNPL will order two $90 sweat suits instead of one, for example, and that they are more likely to use BNPL to pay for a luxury item they would not normally purchase.
The BNPL payment option benefits small- to medium-sized eCommerce retailers by:
- Giving consumers more payment options
- Increasing customer loyalty
- Increasing the average order value
- Giving merchants more payment platforms to work with to help keep their businesses competitive and healthy
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