The UK has the fourth-largest market share for online shopping and it will continue to grow over the coming years despite inflation. That's because the last two years have changed shopping habits forever, with a wave of consumers purchasing products and services digitally. Merchants are therefore left with an exciting challenge: how do you capitalise on the increasing number of people using the web to shop? The answer lies in alternative payment methods, and we've put this guide together with everything you need to know about the current landscape in the digital world of shopping.
1) Flexibility increases your appeal
Offering multiple payment options increases your appeal while removing friction from the checkout process. Customers are increasingly drawn to flexible finance, as it allows them to spread the cost of purchase and buy items they previously couldn’t afford in one go. By offering alternative payment methods, you increase your appeal to shoppers and give them more freedom in how they pay.
2) Finance helps with customer loyalty
Spending through finance options like buy now pay later (BNPL) is expected to double to 26.4 billion by 2024 – it’s a payment method demanded by shoppers. Four in 10 Brits have already used a buy now, pay later product as they become increasingly familiar with different payment options. As an online store, it’s vital that you offer the type of payments people want. Doing so will build trust and show customers that you care about their shopping needs. The result is increased loyalty, with shoppers coming back for repeat purchases because you offer the type of finance that appeals to them. Using payment options shoppers want can increase your repeat business by an impressive 80%.
3) Appeals to a younger demographic
Millennials and Generation Z have already become vital buying demographics, but their importance will only increase in the years ahead. Out of all shoppers, it's these buying demographics who love using alternative payment methods the most. Alternative payment methods will become even more important for online stores over the next decade as these demographics’ spending power increases.
4) Enables higher average order value (AOV)
Finance options empower customers to buy the products and services they really want, increasing average order value (AOV) in the process. This is particularly helpful if you're a business with a comprehensive product range and feature items in the higher pricing brackets. Because shoppers can spread payments – sometimes completely interest-free – over several weeks or months, it gives them more flexibility to manage finances. That increased confidence often leads to businesses seeing higher average order values.
5) That means a better bottom line
Higher average order values help move that bottom line up a notch. But it's not just the AOV that contributes, with flexible financing unleashing increased buying power with consumers, no matter the price of the product or service. So expect to see a growth in sales once you embrace financing, as customers have more means to pay thanks to better finance management brought on by transparent repayment methods that boost customer buying power.
6) It also helps with marketing
For a company to be successful, first, they need a solid marketing plan. It's one of the hardest aspects of a business to get right but can be supercharged by smart financing options. You automatically become more appealing to customers when offering finance and can promote the options you offer in your marketing outreach. Whether that's announcing a new finance partnership, writing a blog post about the benefits of financing for consumers, or including details about the finance offered on your website and in emails, you'll turbocharge marketing efforts with the incentive that is alternative payment methods.
7) Offers a seamless integration into the checkout experience
The best finance partners have a seamless setup and effortlessly integrate new payment options into your website for a fluid shopping experience. From the customer's point of view, it's as simple as clicking the finance option they want and completing their purchase. There's no need to worry about a clunky interface and people's shopping experience being interrupted – everything runs smoothly with seamless integration that doesn't affect the customer journey in the slightest.
8) A multi-lender approach increases approved applications
You can increase your acceptance rate by working with a partner that offers a multi-lender approach. A multi-lender model works effortlessly in the background while a shopper applies for finance. Unlike a single lender, where the customer is rejected if they don’t meet requirements, multi-lender moves them onto the next available option without interrupting their shopping experience. The result is more consumers are approved for finance, which leads to an increase in business.
9) There isn’t a one-size-fits-all approach
It's wrong to pigeonhole all merchants into the same lending product category, as each one is unique and requires its own service. Fortunately, there are financing options available for multiple products that give businesses more variety when it comes to alternative payment methods. Not just any ecommerce finance will improve merchant revenue; it needs to be responsive to the different needs of both businesses and customers.
10) Partnering with Deko can increase your sales by 30%
If you want to increase sales by 30%, Deko’s multi-lender platform is the right retail finance solution for you. We've seen demonstrable benefits with our flexible payment solutions implemented by a range of businesses. By using our multi-lender, multi-product approach, merchants can find the right product for them and increase acceptance rates. As a result, our partners are well-positioned to amplify their revenue and capitalise on the ecommerce boom.