CEO of Duologi Gary Little talks about the difficulties the retail sector has faced in 2018 and a potential solution to combat online sales: flexible finance.

2018 has been difficult for the retail sector.

With Homebase entering a Company Voluntary Agreement (CVA), it is clear that no retailer – large or small – is completely immune to the ongoing high-street ‘crisis’.

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The KBB sector in particular is characterised by expensive, big-ticket purchases.

These naturally bring with them a great deal of pre-purchase hesitation – and potential “buyer’s remorse” – due to being costly and difficult to reverse.

The answer to alleviating this hesitation – as well as providing a way to entice shoppers back to high street stores – may lie in flexible payment plans.

This could be something like point-of-sale retail finance, which allows the customer to split the cost of their purchase over time, at no extra cost.

But how can KBB retailers effectively offer retail finance?

Flexibility is crucial

While there may be a psychological barrier against paying for an expensive purchase upfront, splitting the cost into smaller, more manageable monthly payments can help to allay consumer concerns and drastically increase retailers’ sales.

However, it is critically important to offer customers the payment option which best suits their unique needs.

0% finance, interest-bearing finance, and buy-now-pay-later being just a few key examples.

Remove friction

If finance is to be embraced as a viable alternative to more traditional payment methods (such as credit cards or personal loans), it cannot create additional friction for customers.

Indeed, almost half (46%) of online shopping baskets are abandoned at the payment stage, which highlights the importance of ensuring that this process is as streamlined as possible.

Ideally, point-of-sale finance should be as seamless for customers to use as any other payment method.

Indeed, we recommend that a customer waits no longer than a few seconds to find out whether they are eligible for credit or not.

Offer omnichannel solution

Many customers now prefer to research products online ahead of going in-store to make a purchase.

This customer – known informally as the ROPO (research online, purchase offline) customer – must be effectively catered for.

A customer should be able to apply for credit no matter where they are – whether this be online, via mobile, or in-store – receive confirmation of eligibility within seconds, and then proceed with their purchase.

Rather than being tied to the traditional retail showroom, customers now expect to shop where they want, when they want and – importantly – how they want.

With this in mind, it is the retailers that can offer customers this flexibility that will be best-placed to thrive in the ever-changing retail landscape.

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