Maintaining a competitive edge in the retail business is a relentless challenge. Today’s consumers are empowered by information and choice. They know that a hyper competitive retail market offers plenty of alternatives, both online and in stores, so they will shop elsewhere if their expectations are not met.
Retailers work hard to create compelling experiences to gain preference for their brand and get customer’s buying. However, even the most carefully considered retail path can quickly unravel if a customer faces hurdles at that crucial moment when they are ready to buy.
Until recently, delivering credit to every customer profile was a huge hurdle for retailers. The Vyze financing platform has set out to remove that complexity. We spoke to Don Kingsborough, one of the most respected names in retail, to gain his opinion what the Vyze platform means for retailers and consumers.
Vyze: Less than half of retail purchases are exposed to a credit program and only 11% of retail sales are made using financing. Where do you see the opportunity to innovate in financing?
Don: For me, innovating in retail financing is quickly becoming a necessity. Today’s consumer is accustomed to flexibility, so any retailer unable to offer this stands to lose out. Not so long ago, offering more than one financing product meant a complex and costly task of negotiating separate deals and integrating them into one system. Now, using the Vyze financing platform means all that is taken care of. Retailers can focus on what they do best – creating the value and experiences that win sales – while Vyze ensures that consumers have better options to purchase where and how they like.
Vyze: What do financing platforms mean to retailers?
Don: Retailers are familiar with other platform plays, just not in the financing space. The goal of any retail business is to sell more and the best opportunities come when the consumer is motivated to buy. Vyze provides retailers with plug-and-play financing options that are seamless – there’s no need for individual integrations. The exciting part is that the platform lets retailers adapt to changing market conditions: Vyze helps take the cost and complexity out of adding or subtracting financing products. In time, it may serve to enhance those products by making the marketplace more competitive.
Vyze: Currently, almost half of applications for finance are declined. Do you believe platform technologies can change this by making it easier for retailers to match the right financing product to their customers?
Don: The ability to offer a range of financing products to suit different profiles of customers was not really viable before a platform like Vyze came along. A plug and play solution for financing allows retailers to experiment and learn what works best for their sales figures and the wants and needs of their customers. Doing that without a platform is so painstaking that it’s often not worth the effort. Vyze makes it easy and that will help more consumers find appropriate financing.
Vyze: Does the platform help with seasonality?
Don: Yes. Access to a broader marketplace of financing players and the different types of financial products that Vyze offers means retailers can now compete more effectively throughout the year. The cost of customer acquisition can come down and this creates more opportunity to adjust other factors that can yield more sales.
Vyze: The customer experience is a hot topic for retailers right now, what role do you think financing plays in this?
Don: I think the ease for the consumer is the real magic. At the moment they have to anticipate a credit need need in advance, or follow up after seeing something they want. In either case, that sale opportunity is easily dissipated. Now, Vyze allows the timing of wanting and buying to be aligned with zero hassle.
Vyze: What about loyalty?
Don: Once you realize the flexibility that comes from purchasing with financing, you’ll prefer to shop with retailers which offer it. Retailers that take a lead of bringing that flexibility to their customers can gain a competitive advantage.
Vyze: How does Vyze support secondary purchasing?
Don: It comes back to that flexibility for the consumer to buy what they want, when they want it. That helps increase basket size or incentivizes the consumer to return to make subsequent purchases. I’d expect this to happen more quickly when they know financing is available. Consumers increasingly expect on-demand service like this, but few retailers were equipped to offer it. Vyze allows them to capture pent up demand much faster than waiting for consumers to pay down their credit card balance, gain a bonus, or some other event. This on-demand service is especially important to younger consumers. They regard credit as an enabler for doing something on their schedule, not that of their financial institution.
Vyze: What can Vyze do for bricks and mortar retailers?
Don: Vyze gives more consumers flexibility to spend, so retailers are able to offer a broader range of products. It starts with things that have higher ticket value which might previously have been out of reach for their usual customer base. After that it becomes a convenience for all purchasing, giving consumers the option to choose the timing that works for them. It also modernizes the experience, making credit applications akin to quick and easy mobile transactions. This is important for bricks and mortar retailers in a world of digitally savvy consumers.
Vyze: Thank you for your insights. Are they any final points you’d like to make?
Don: I’ll just say how important it is for retailers to offer their customers a seamless experience. The great thing about Vyze is that customers in different financial situations can all enjoy the same retail experience. It doesn’t matter that they are purchasing using different financial products. As retailers compete more and more on experience, this seamlessness will become an essential part of their strategy. Right now there is a competitive advantage in adding flexibility, but soon there will be a competitive disadvantage of not offering it.