For retailers one of the most stressful times of the year is the holiday shopping season. Between new holiday hiring, managing inventory, and sales promotions to get customers into the store, a holiday headache can ensue.
For many customers during this time of year, they rely heavily on store credit to make their holiday purchases. However, many retailers are facing the reality that half of their customers can’t shop at their store because of their limiting credit options. Which begs the question of the retailer, what would you do if half of your customers couldn’t shop at your store?
Here’s a tale (case study) of how retailers, when faced with financing’s past and present, looked to the future of financing to create the best shopping experiences for their customers.
Past: Strenuous Credit Process
In the past, getting credit at point of sale was a time consuming, slow process. Customers associated the process with lengthy applications that sometimes required them to fill it out by hand, and sometimes fill out multiple applications for every credit offer.
For retailers, adding more credit options required costly and long integration processes. This was a less than optimal experience for both the retailer and the customer. However, consumers who did get credit enjoyed more spending power, and retailers enjoyed more sales.
Present: Creating Great Customer Experiences
Today, more and more customers are actively looking for ways to pay for their purchases. 42% of customers say that they are more likely to make a purchase if a retailer offers financing. The problem? Most retailers don’t have credit options for a majority of their customers..
Traditionally, retailers leveraged a single lender that approves customers with a prime credit score. With 47% of customers being turned away for financing, this is having a negative affect on the customer experience. With the constantly evolving customer preference, retailers realize that providing a great customer experience at every part of the financing journey is key in continually bringing customers back into the store and ensuring customer loyalty.
Future: The Rise of the Platform
What does the future of consumer financing look like for retailers? Many retailers have already begun to explore alternative and emerging financing options to help boost their approval rates and be able to offer credit to more of their customers. With the emergence of financing technology, the future of credit programs shifts to financing platforms.
Platforms provide retailers with the ability to house multiple lenders, dynamic technology, and a single application all under one roof with a single integration. Gone are the days of filling out several applications for multiple offers. Instead platforms have begun to focus on making this process seamless and accessible for all parties in the financing process.
Retailers are taking a second look at their current financing options, and implementing multi-lender platform solutions to offer credit to more customers and grow sales. And they are beginning to see significant results.
“We’ve always had financing, but we’ve never been able to reach so many customers, and 25 percent of our total volume is now matched to a lender through the Vyze platform,” says Lary Sinewitz of BrandsMart, an electronics retailer that has used a POS financing solution for the past two years.
“Not only has Vyze allowed us to deliver a superior credit experience to all of our customers, it has also resulted in newly acquired customers, increased customer loyalty, and higher sales,” says David Dirven, VP of operations at ABC Warehouse. Such results speak for themselves.
With a multi-lender platform solution, retailers have seen:
- 80% of sales driven through the platform were new sales
- A financing offer rate that increased 282% year over year
- Increased repeat sales by 191% in one year
As retailers begin evaluating their 2017 credit strategy, they should look at their current performance metrics. Making the shift from consumer financing’s past to the future can make all the difference in the customer experience and revenue growth in the New Year.
Looking for more ways retailers are using financing platforms to get ahead of their competition in 2017? Read all about their stories and their path to making more of their customers happy here.