How can retailers stand out in ecommerce against the might of Amazon? Rob Cottingham, credit director at consumer finance specialist, Duologi looks at how offering flexible payment options can help to build repeat custom and create brand loyalty.
Whilst UK high streets fall victim to ongoing profit warnings and store closures, the online retail market continues to thrive. Indeed, recent figures from Capgemini reveal that more customers now shop online than ever, driven by the convenience offered – as well as the ability to browse around for the best deals.
Unsurprisingly, these conditions have led to an increasing number of brands placing a greater emphasis on their online presence in order to maximise sales. UK stalwart Marks & Spencer, for example, recently highlighted its intention to focus on the e-commerce side of the business following the closure of several stores earlier this year.
The question of the moment, however, is how to stand out in this competitive marketplace against the might of major online retailers such as Amazon, with brands such as Tesco Direct the latest in a long line of e-commerce casualties. The vast majority of brands have little chance of competing on price or convenience alone, so must offer something different if they are to survive.
A great digital experience
The Amazon website is by no means perfect. Whilst its user experience works from a purely functional perspective, it does not offer the sort of inspirational, beautiful or streamlined aesthetic that many smaller retailers have perfected. Its customer service is also notoriously lacking, with very few opportunities to speak with a real person in the event of a problem.
Moreover, for consumers, a key factor in deciding where to spend their money is – by necessity – the availability of those funds. Credit lending continues to grow in the UK, providing a great way for retailers of all types to take advantage of the opportunity.
Flexible retail finance therefore provides a way for online businesses to compete against the likes of Amazon by removing some of the consumer frustrations and concerns around making a costly purchase upfront.
The benefits of offering finance online have even been ignored by many major retail brands that offer finance in-store. Considering a lack of payment options can reduce online sales by up to 30%, this creates a major opportunity for flexible retailers that proactively offer their customers a range of options to pay for their goods. This makes finance a simple, quickly accessible alternative to more traditional payment methods such as credit cards or PayPal.
But how best to do this?
Give your customer a choice – customer needs will differ dependent on which products they are purchasing, when they purchase them, and their current financial situation. With this in mind, adopting a one-size-fits-all approach is not the way forward.
Instead, it’s important to offer customers a more bespoke solution. There are almost as many different consumer lending options as there are consumers, with 0% finance, interest-bearing finance, buy-now-pay-later and multi-tier options loans just a few key examples.
Actively promote the offering – our recent research found that 94% of people wouldn’t even think to think to ask if a merchant offered POS credit, it’s vitally important to promote the finance options available.
Simple tools such as a clearly visible website header can alert potential customers to the benefits of finance solutions, providing a clear reason to purchase from that business in particular.
Offer 0% interest solutions – never underestimate the power of 0% finance. Ensuring that finance costs the customer nothing more than the original cost of purchase is a crucial conversion tool. What’s more, as well as securing the sale, 0% finance can also foster brand loyalty among customers, and thus drive repeat business.
A seamless payment journey – it’s also critically important to consider the payment journey. A protracted, confusing and drawn-out payment process disengages potential customers and is a key reason behind abandoned shopping trolleys.
To avoid this, merchants should ensure that their finance platform of choice works quickly, easily and seamlessly across all online channels – including mobile, where more people now shop than ever – as well as in-store as a fully-integrated part of the payment process. Ideally, a consumer applying for credit at the till should receive confirmation of eligibility in seconds; no longer than it takes to process a traditional card payment.
Overall, at a time when the future of retail hangs in the balance, effectively implementing consumer finance options into the payment journey can hugely benefit businesses looking to sell more online. Not only will this help to attract new business, but – if done right – can help to build repeat custom and create vital brand loyalty amongst customers.
By Rob Cottingham