The financial benefits of BNPL and how to communicate them to your customer base
Recent research conducted by Clearpay and The Future Laboratory shows that a growing number of Millennials (those born between 1981 and 1996) and Gen Z consumers (born between 1996 and 2010) are turning away from credit cards and the negative connotations associated with debt. Instead, they are looking for more straight-forward and low-commitment payment solutions, such as Clearpay, that offer Buy Now Pay Later (BNPL) payment options at over 1,900 top retailers.
At Clearpay, this new attitude towards financial wellness has led to rapid growth with a +47% year-on-year increase in new U.K. customers from 2019 to 2020 during our peak trading season. This, in turn, has opened up plenty of new potential for online retailers resulting in a 460% increase in the number of Shop Directory referrals sent to global merchants, up from 2019.
How could this work for your business in 2021 and beyond? Let’s take a look at the financial benefits of BNPL and how you can communicate them to your customer base.
BNPL helps to attract and convert new customers
Many customers who like the flexibility of BNPL will use Clearpay’s brand directory to find out if their favourite retailers offer the service before shopping. The directory can also be used in the same way to discover new brands and help retailers attract and convert a whole new customer base. Research also shows that when a customer knows a retailer offers BNPL at checkout, they are more likely to return and become a loyal customer.
In addition to appearing on a brand directory, you should also clearly display that you offer a BNPL payment option across your website – from homepage banners, to product pages, marketing emails and social posts.
BNPL allows customers to budget and pay in instalments
BNPL options such as Clearpay are always interest free, and free from fees when instalments are paid on time, so it offers a simple way for customers to pay for their purchases in a more flexible manner. At Clearpay, the cost of a purchase is split into four instalments which are deducted automatically every two weeks from the card used at checkout. This is a particularly attractive concept for customers who budget their monthly finances carefully.
Retailers signed up with Clearpay, advertise the usual retail price of a product and clearly list the instalment price below, available through Clearpay. This gives customers more options at checkout and makes the instalment breakdown completely transparent.
BNPL increases basket size and AOV
Research shows that BNPL options at checkout increase an average basket size by 20–30%, while reducing the risk of abandoned baskets at checkout. Why? First of all the ‘sticker shock’ value decreases significantly and it encourages customers to try more items on at home, safe in the knowledge that they won’t be charged for them in full, just yet.
Research by UPS shows that 66% of customers check the returns policy before making a purchase. BNPL allows time and flexibility to return unwanted items before the full basket is deducted from a customer’s bank account, making shopping more convenient and stress free.
CTA: Interested in learning more about how Clearpay can help your business? Schedule a meeting with one of our Retailer Team Members today at [email protected].
Categories