Boost Your Ecommerce Business with “Buy Now, Pay Later” Options
As the ecommerce industry sees persistent growth, competition becomes voracious. With an array of choices for consumers, WooCommerce discusses the implementation of “Buy Now, Pay Later” (BNPL) options to outperform competitors and fulfill customer needs.
Bottom Line: Incorporating BNPL options in your ecommerce establishment can effectively upscale revenue, elevate conversion rates, and enhance the shopping experience for customers, making it an attractive strategy every ecommerce owner or manager should understand.
In the foreseeable future, buy now, pay later options will likely be a default payment method in most, if not all, ecommerce businesses due to its popularity among customers, especially Gen Z and Millennials. As online credit approval algorithms become more sophisticated and secure, we can expect more innovative BNPL strategies that offer a wide range of attractive benefits to both the customer and the merchant.
Understanding Buy Now, Pay Later
Buy now, pay later is a game-changing solution that allows customers to purchase their items upfront and pay for them over a series of installments. While the customer gets their items right away, WooCommerce stores receive the full payment for each purchase, minus a small fee, in their bank account within days. The best part? Stores don’t have to concern themselves with pulling a customer’s credit score or pursuing late fees for missed payments.
BNPL allows merchants to sell high-value items with greater success since it makes costly purchases more attainable for consumers. As a result, online retailers can significantly increase average order values.
The Benefits of Offering BNPL
Implementing buy now, pay later in your checkout offering reaps numerous rewards:
- Boosts product sales by offering flexible payment methods – By allowing customers to make purchases in monthly installments, Dan Kennedy’s example in his book “Almost Alchemy” demonstrated how this resulted in doubling of unit sales, even with a higher overall price.
- Protects margins on products – People are likely to spend more on the same item for the convenience of a payment plan. This creates a win-win situation as customers can spread their payments and future budget more effectively, leading to an increase in average order value and fostering customer loyalty.
- Increases brand goodwill and customer loyalty – Offering payment options communicates that you are eager to make it possible for the customers to make their purchases. This goodwill, in turn, contributes to positive brand reputation, better reviews, and higher customer loyalty.
- Eliminates administrative problems and maintains revenue – When offering payment plans, frustrating administrative problems may arise. However, with dedicated BNPL solutions like Afterpay and Affirm, once a shopper buys, merchants are paid the full transaction within days, thereby removing the risk of revenue loss.
These BNPL providers also take care of fraud- and repayment-related issues, which leaves the merchants worry-free. With their huge user base, they can drive highly valuable traffic to your online store.
A total of 56% of customers look for various payment options on the checkout page, according to Neil Patel. Moreover, research from LendingTree found that over 70% of businesses using BNPL reported higher conversions, order value, and customer acquisitions. Thus, offering BNPL may not just be a bonus feature, but a necessity for ecommerce stores wanting to get ahead.
Integrating BNPL into Your Ecommerce Business
WooCommerce has simplified the process of adding buy now, pay later options through its WooPayments feature. This integrated payment solution allows merchants to add BNPL options in their store, handle transactions in a single platform, accept various currencies and seamlessly integrate with a variety of tools.
Merchants not using WooPayments can still add a BNPL option by installing an extension from the WooCommerce extension library.
BNPL is a booming trend in online retailing, benefiting consumers and retailers. This win-win payment solution is being increasingly integrated in WooCommerce stores around the globe, elevating average order values and offering a seamless shopping experience to customers. By enabling this feature, retailers can increase conversions, enhance customer loyalty and, ultimately, drive business growth.