Now that the UK has emerged from lockdown, retailers will be hoping to hit the accelerator on business recovery. It is crucial that they are equipped with the tools that will help them to capture the maximum amount of revenue as they seek to drive business growth. Fundamentally, this will rely on having optimum payment processes in place.
Retail finance will play a key role in this success. This technology is continually evolving, and there is now a range of flexible payment products that can facilitate transactions to maximise checkout power for merchants of all sizes. As we head into the busiest few months of the year for the retail sector, these options can ensure that businesses secure increased sales – particularly those of a higher basket value.
Significant increase expected in flexible payments
Traditional payment methods, like cash and then credit cards, have driven sales for decades, but it is becoming increasingly clear that retail finance products can now help businesses of all sizes to reach a much wider customer base. For instance, recent research has found that nearly 9.5 million Britons have avoided buying from retailers that don’t offer buy-now-pay-later (BNPL) options at the checkout. This represents a significant amount of lost income for those UK-based retailers who don’t offer more flexible ways to pay.
The number of consumers using retail finance is also set to grow, with overall BNPL spending in the UK expected to rise from £9.6billion in 2020 to £26.4billion in 2024. Merchants that offer a variety of payment options will be able to capitalize on this trend and maximize their checkout power to boost revenue.
Flexible payment options mean more sales
The retail finance sector has certainly seen a rapid evolution in recent years, with new options now available that offer not only BNPL but a wide range of products to suit all sectors and basket sizes. These include revolving credit facilities, personalised repayment plans and bigger loan ticket facilities. Each of these has its own advantages, but importantly they all ensure that more sales at checkouts are successfully completed.
At Deko we have found that the best approach is to have a multi-product, multi-lender offering, which has been proven to give a material boost to checkout approval rates. Our platform has been built to provide products that are tailored for all business types and basket sizes. Each offering automatically and efficiently presents customers to a range of different lenders, meaning that there is a much higher likelihood that the sale will be completed. On average, Deko has been able to boost checkout conversion by 24% for merchants on its multi-lender platform.
Moreover, multi-lender retail finance products offer real benefits as basket sizes become bigger. They are particularly helpful for ensuring that purchases above £250 are completed, where the need to access a range of finance providers becomes more crucial. As a result, alternative payment options can mean that retailers secure more sales of larger value, regardless of the size or sector of their business.
Making the most of new consumer habits
The upcoming so-called golden quarter, encompassing the festive season and Black Friday sales, will be a key period for merchants. In 2019, the UK saw more spending during Black Friday than any other European country at £8.6 billion. Merchants should make sure that their payment process is updated to generate maximum sales from this increased activity.
Getting started with these products doesn’t need to disrupt business operations. Technology in the retail finance sector is progressing at a rapid rate, and integrations can happen very quickly – for example, Deko’s payment solutions can be onboarded in as little as 24 hours.
This means that merchants of all sizes and sectors can get extra checkout power almost immediately, and be well prepared for the festive sales rush. For independent retailers or businesses in sectors that traditionally see larger basket sizes, this can make all the difference between a completed sale and a purchase that is abandoned at the last moment.
Spurring wider economic growth
Making sure that merchants of all sizes and sectors have the capability to maximise their checkout power will be crucial to accelerating post-pandemic recovery. Bespoke retail finance tools can play a central role in this, as they are all about generating the optimum number of sales. A range of flexible payment options are now available to all merchants to ensure that customers can complete as many sales as possible, and now is prime time to take advantage of them. Economic growth needs a kickstart, and the right technology is here to provide it.