With so many options when shopping online, offering appropriate payment options can be crucial to differentiate yourself from the competition. Here’s what the Buy Now, Pay Later (BNPL) option entails and how it can help you increase your online fashion sales.
In 2021, the fashion industry recorded the third-highest abandoned cart rate at 88.57 percent. Buying women’s outerwear was at the top. 58.6 percent of consumers said they weren’t ready to buy or didn’t have the funds right now. Some retailers have therefore decided to introduce the “Buy Now, Pay Later” (BNPL) option in their online shops.
What is Buy Now, Pay Later (BNPL)?
Put simply, the Buy Now, Pay Later (BNPL) option allows buyers to split and pay the purchase price in installments over an agreed period of time. Some offers, like Openpay’s, require consumers to pay a small portion of the cost of the item upfront and the rest later. Others, like Klarna, don’t require upfront payment, instead allowing consumers to pay all or the remainder of the purchase price in equal monthly installments or all at once later.
Why is BNPL so attractive to customers?
Such solutions have been around since 2010. However, since the pandemic, their popularity has increased as more and more consumers want flexibility, financial control and transparency in their payment options.
According to a study by RFI Global, consumers value the absence of interest charges (33 percent), the convenience (33 percent), better cash flow management, which means that other expenses can be paid for (28 percent), of the BNPL options. and assistance with budgeting (31 percent).
The simple BNPL credit model allows buyers to spread the cost of their purchases over time, encouraging them to buy and spend more.
The benefits of BNPL for online fashion retail
A BNPL option helps consumers strike a balance between long-term budgetary goals and the immediacy of product purchase. This can increase brand loyalty, increase average order value, and simplify the checkout process. BNPL also means financial security for brands as they are paid in full up front and BNPL manages consumer payments and returns.
A survey by Cardify found that 48 percent of consumers say they can spend 10 to 20 percent more with BNPL solutions than when using credit cards.
According to research from Klarna, retailers benefit from a 60% increase in sales per order when consumers use their financing solution and a 20% increase in conversions. The flexibility offered by payment options helps fashion brands increase their profits while providing financial support to customers.
How can you integrate the solution into your online shop?
Today, most e-commerce platforms allow merchants to connect to the BNPL providers of their choice, ensuring a smooth and seamless integration. Depending on which BNPL provider you prefer, some require minimum order amounts to qualify for financing. Be sure to check the terms and conditions of each BNPL provider before connecting them to your ecommerce platform.
To maximize success with BNPL, you need to educate your customers on how the payment option works. Don’t be afraid to mention the new BNPL option in several places on your website, e.g. B. on your homepage and your product page.
BNPL is a key tool to better analyze and understand your customers’ payment preferences and offer them the options they want when shopping. It is an optimal solution to convert more consumers into customers and increase sales and brand loyalty. That’s why brands today need a BNPL solution.
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