Why finance could be the answer to some of your customers’ concerns

The sales journey is evolving. More consumers are changing their buying habits and retailers across the UK are battling to attract and retain new customers in a challenging climate. But promoting finance across the sales journey could help you meet the changing needs of your customers.

We caught up with Costa Stathis, Head of Business Propositions at Barclays Partner Finance, to find out why.

Contact us today to find out how straightforward it is to integrate point of sale finance into your sales journey.

“Understanding consumer needs is key”

Offering a wide range of payment methods to customers is a must in the current situation where individuals are looking to brands to be as flexible as possible when it comes to purchases.

This is where finance can be increasingly beneficial to retailers. It provides an alternative and accessible payment option for larger purchases that many consumers wouldn’t have considered, or known about, before. With 67% of millennials now opting for POS finance ¹ to fulfil that dream purchase, the demand for this payment option continues to grow as younger generations of consumer wish to own and pay for big-ticket items sooner.

The time shared at home during lockdown with those closest has helped consumers focus on how they use their purchase, rather than the purchase itself. A new sofa could mean room for the whole family to spread out, and new tech helps keep in touch with a virtual quiz night or video call. This ‘buy once, buy well’ mantra means consumers are focusing on spending for longevity, rather than replacing items quickly.

It also means they’re willing to spend more to get the best product or service. By offering your customers a flexible and affordable way to pay for the things they really want, point-of-sale (POS) finance can help drive conversions for businesses across a variety of retail sectors – from mobile phones to home improvements.

“The earlier finance is offered, the better”

The path to purchase is often a long process for many consumers, consisting of a number of important steps. When spending more on a purchase than usual, it’s clear they need to feel comfortable with it. And the psychology behind this makes for interesting reading.

Research ² shows us that purchases today no longer involve a simple linear journey for the customer as people change the brands and products on their list through the buying process. During this time, consumers will check reviews, visit locations and get a feel for the brand. So to be effective, you’ll need to appreciate buyer behavior and remind them of the options available to them.

This isn’t uncommon – and it highlights the importance of integrating finance as early as possible in their path to purchase.

For customers provided with finance as a payment option, around 75% decide to finance a large purchase early in their journey ³. The option to pay over time makes affordability and budgeting simpler, helping remove the stress of a large, single payment.

“Retailers have the power to empower”

Making the finance option clear – from research to checkout – is shown to double, even triple, conversion rates for retailers ³. And the way it’s promoted can be a great source of empowerment for consumers.

Think about where you’re advertising goods and consider how finance can be a part of it. Just how can finance help to make the decision to buy that much easier?

A simple and effective method focuses on the price tag. While a large price alone may feel scary, showing the monthly cost of the finance option next to it helps consumers see just how manageable it can be within their budget.

Of course, having a brand facilitate the finance option could also give consumers the confidence to push ahead with their purchase.

“Our own expertise and research help us understand the purchase journey”

No two consumers are the same, but from our own research and analysis, there are some trends that may help retailers understand when’s best to talk to them about finance.

Our customer persona research has highlighted three intriguing consumer types and the way they would benefit from finding out about finance:

• Consumers who won’t buy unless finance is available – they’re most likely to benefit from your initial marketing and awareness raising of finance. They’ll see that something they would usually save for is now readily affordable.
• Consumers intent on making a purchase – because their mind is already set, finance could simply be presented as an alternative payment option at the checkout. They may have blocked out earlier messages about finance.
• Consumers who want to buy and talk – messages about finance on websites or even a link to an eligibility check tool would be most beneficial to these consumers as they browse. They may be concerned they can’t afford a product, or they’re reluctant to use their savings to fund it.

Independent insights like these, coupled with our in-house expertise, have placed us in the perfect position to partner retailers in all industries. And as a leading finance provider in the UK, we’re more focused than ever on supporting our partners to feel confident when offering our loans to customers.

Championing the customer in everything we do

I’m passionate about providing the best possible outcomes for both our retail partners and their customers. Our flexible point of sale credit solutions have already helped millions of customers’ lives easier; giving their customers the confidence to make life’s important purchases.

I’ve spent the last 10 years working with large clients in the banking industry, with the last five spent in a variety of roles across Barclays, from conduct and fraud to transformation projects and customer experience.

As Head of Business Propositions at Barclays Partner Finance I’m responsible for championing the customer in everything we do, from user experience and behaviour to market trends, insights and new propositions. These insights help us to create, build and develop industry leading capabilities that work for the customer, and help our clients to grow their business.

We’re living through extraordinary times for businesses in the UK but we’re rising to the challenge. I’ve been blown away by the creativity and inventiveness that our teams have shown in overcoming some of the obstacles for both retailers and their customers in the ‘new normal’ shopping environment with POS finance as a key payment option.

Contact us today to find out how straightforward it is to integrate point of sale finance into your sales journey.

References

1 https://www.paymentscardsandmobile.com/60-of-millennials-using-point-of-sale-credit-finance-services-when-shopping/

2 https://www.smartinsights.com/marketplace-analysis/consumer-buying-behaviour/what-influences-purchase/?utm_source=basic&utm_medium=pdf&utm_campaign=digital-models

3 www.mckinsey.com/industries/financial-services/our-insights/banking-matters/us-lending-at-point-of-sale-the-next-frontier-of-growth