ATLANTA, GA – July 18, 2022 – How we pay and when we pay for goods and services have been evolving over centuries. In today’s world, businesses have adopted payment policies that provide their clientele with seamless payment options. Online retailers in particular are beginning to implement ‘Buy Now, Pay Later’ (BNPL) policies as the newest form of payment, reshaping the online retail industry to target younger consumers.
In fact, according to Forbes, from 2019 to 2021, the percentage of Gen Zers in the United States using BNPL has grown six-fold, from 6% to 36%. Millennials’ use of BNPL has more than doubled since 2019 to 41%. Ideally, millennials favor a payment system where they don’t have to pay all at once, or one that enables them to pay in installments.
Deepak “Dee” Agarwal, an experienced entrepreneur and business leader in the eCommerce space, believes that ‘Buy Now, Pay Later’ policies are essential for online retailers, no matter your target customer’s age. Having had his own experience leading the retail industry, he gives an inside look into five reasons why BNPL policies are elevating the eCommerce industry for consumers and business owners alike.
The BNPL system not only allows businesses to stay in touch with the customer as they continue to settle their balances, but they also trust them to make the payments. The customer is given a sense of control over their purchase by choosing when to make the installment payments.
“By understanding and fulfilling the need to extend payments over time, you meet the customer where they are. If a customer prefers to complete the purchase over the course of weeks or months, by allowing them to do so you’re not only securing their purchase, but building loyalty and trust with that customer,” Dee Agarwal says.
The more a customer can relate to a business with them, the tighter the bond and loyalty. Clients who have confidence in a business will most likely keep coming back to buy more.
Increases Customer’s Lifetime Value
The summed value a customer adds to a business over the course of their relationship is called the ‘customer lifetime’ value. By offering customers the option to pay later, businesses show existing and potential customers that they are valued, in return making them repeat clients and extending their lifetime value. Additionally, the presence of the BNPL option may influence the frequency with which customers make purchases, thus increasing their lifetime value.
Creates Better Customer Experience
A quality customer experience gives customers a reason to keep coming back. While there are many ways to ensure a memorable customer experience, the BNPL policy is the most reliable.
“Through this method, you reveal to customers that you are willing to work with them and offer different payment options. It draws them to your business and, accordingly, boosts your sales. With an excellent customer experience, having repetitive customers becomes the standard for a business,” Dee Agarwal says.
Not only does this create a better online shopping experience, but certain companies have also introduced BNPL policies to their brick-and-mortar stores, allowing customers a variety of payment options for both in-store and online purchases. The endless options allow the customer to have a customized retail experience, all the way down to the form of payment and when they pay.
Attracts New Customers and Retains Current Ones
One of the most stressful matters for business owners is how to retain and attract customers.
“In order for them to keep coming back, show them that you value and trust them,” says Dee Agarwal. “Nothing conveys this value more than allowing customers to start using goods immediately without full payment.”
Customers who once could not afford to shop at more luxurious retail stores now have the opportunity to acquire the brands they love with BNPL policies. Instead of one large payment that would set them back, they can space them out over time, easing the overall cost.
Keeps Up With the Competition
Given the benefits of BNPL policies, businesses around the world have already implemented this as an option to be competitive and take advantage of current trends, increase sales, new customers, and returning customers.
“Implementing BNPL for your business is an easy way to stay ahead of the competition, improve the overall customer experience, and grow your business,” says Dee Agarwal.
Allowing customers to possess products and merchandise without a complete payment can be a painstaking concept to get on board with as a business owner or leader, “However giving consumers a frictionless and convenient way to pay not only sets your business apart from the competition, but keeps them coming back, and spreading the word to new customers” says Dee Agarwal.