By Michael Bevan, CEO at consumer finance specialist, Duologi
For many people Black Friday is a chance to grab a quick bargain, before cash starts to get tight in the run up to Christmas, and this year is expected to be the biggest Black Friday yet.
Experts have forecast that shoppers will spend an estimated £2.53 billion on November 29, over 3% more than last year – with the four day event from November 29th to Cyber Monday (December 2nd) expecting to bring in a total of £8.57 billion.
However, despite these optimistic figures, some savvy shoppers might still find themselves short of the funds they need for certain items during these flash sales.
Rather than losing out on these customers, forward thinking retailers can use this as an opportunity.
One way to do this is by offering a range of finance options, like point of sale (POS) finance, to attract those who might be priced out of the limited discounts they’re offering. POS finance typically allows customers to defer their payments over a period of time via a ‘buy now, pay later’ system, spreading the cost to maximise affordability.
Our research highlighted the appetite for these solutions, with 42% of shoppers saying that retailers could do more to offer POS finance options. In addition, 34% said they would be more likely to spend with an organisation that offers finance options, highlighting the benefits alternative finance options could bring.
So with this in mind, how can retailers quickly take advantage of the opportunities that alternative payment options present over Black Friday and the Golden Quarter?
Visibility of options
Retailers that decide to implement POS finance need to clearly advertise the alternative payment options from the outset, so customers know what is available.
Advertising finance options solely at the checkout could mean that a lot of customers aren’t aware of the payment methods available to them until they’ve already made their decision to buy a product.
Retailers with physical stores have the option of directly interacting with customers to make them aware of the finance options available. Another way to advertise is by showing the cost of monthly installments next to the full cost of an item, making it easier for consumers to calculate whether it is the right option for them before buying.
Online retailers need to ensure they’re communicating the different finance options available throughout the entire customer journey – these should be visible on the landing page, as well as individual product pages, FAQ pages and at the checkout. As ultimately, this will help to reduce the level of basket abandonment and boost sales and revenues.
Avoid technical terminology
Avoiding confusing terminology and jargon will give customers more confidence when considering payment options – whether they’re online or in a physical store. The financial industry is full of acronyms and it is not always obvious what they stand for. Using information boxes online and clear literature instore will help better inform customers and dispel any unnecessary doubt they may have.
Offer quick decisions
Queuing for hours outside stores and falling over other customers to grab the last product in stock aren’t unusual images associated with Black Friday. As Black Friday is all about quickly grabbing a bargain, consumers want the shopping experience to be as quick and seamless as possible.
However, when it comes to finance, many shoppers might anticipate a grueling process when waiting for a decision to be made on whether they can access finance or not – which could put people off from choosing this option.
Therefore it’s really important to implement a fast, streamlined application service, as this can make all the difference when converting customers who are strapped for time in the mad rush that often comes with days like Black Friday.
Many retailers and finance providers can alienate customers by requiring complicated background checks and asking extensive questions, which don’t really contribute to the overall decision making process.
Fortunately, there are many bespoke POS finance services now available, such as Duologi, that allow retailers to offer quick finance decisions in a matter of minutes, without reams of forms and complicated background checks.
Be transparent and honest
When offering finance, retailers should drop the small print and be open with consumers who opt for this payment option. There are many types of finance options available and there is a big difference between a high interest loan and a point of sale (POS) finance offering with zero interest. If a customer has to pay interest on top of their monthly installments then retailers need to make that clear from the outset.
Each customer is different and a finance option which works for one might not for another, so retailers need to take responsibility for ensuring a customer can understand what they’re applying for by giving simple and coherent advice.
In recent years, Black Friday has come under fire from consumers questioning the authenticity of certain retailer’s sales, so it is essential that businesses bridge the trust gap with consumers – whether it is the size of a product, the price or the payment option. Being honest will help a brand build customer loyalty in the long term.
Black Friday and the Golden Quarter is quickly approaching and retailers looking to gain a competitive edge and maximise their profits should consider seeking out a financial solutions provider which can offer transparent finance options, in a quick and honest way. As well as offering customers an easy payment solution, retailers need to ensure that their customers are being guided through the process in a clear and understandable way, which doesn’t detract from the overall shopping experience.