In an uber-competitive ecommerce environment, it’s impossible to put a value on new ways of securing customers. Whether it’s tailored content or loyalty discount schemes, businesses are constantly trying new ways to keep customers on board, and away from the competition.
One potential way of doing that is through customer credit in the form of buy now, pay later. So, how does it work? And would it work for your ecommerce site?
Buy now, pay later
With buy now, pay later, customers get an ongoing line of credit, which can be used to purchase what they need. It’s like a credit card offered by your business to customers, on which they can purchase products and pay later. It means they can get what they need from you even if they don’t have the funds immediately.
This kind of flexibility is hugely useful for small businesses, who may be awaiting payments from their clients. It’s also essential for clients who rely on your products to fuel growth, meaning they need the purchase to trigger the funds. Let’s not forget individuals working to a tight budget, who would simply prefer to have their purchase sooner if they know they will eventually have the funds.
Why use buy now, pay later?
Buy now, pay later is flexible for ecommerce businesses too. You can decide the credit limit for your customers and can restrict the option to regular repeat customers only if you wish. You can even add interest to make up for the inconvenience of waiting for income, though this will no doubt make the option less attractive to consumers.
At this point, however, you might still be wondering what customer credit adds to your business. In short, it’s another stream of income. Many buy now pay later customers will be customers you wouldn’t have had otherwise.
Would you rather have £1,000 paid next month or £0 paid today? Yes, there may be some customers who use buy, now pay later unnecessarily, but they will more than likely be outweighed by a distinct group of buy now, pay later clients.
Implementing buy now, pay later
For big businesses, buy now, pay later is no longer a novelty. Companies like Argos, Currys and Very offer their own credit systems with varying interest levels. Online clothes retailer Asos has recently launched a similar idea where customers can try before they buy. Using online banking platform Klarna, they allow customers to order, try on and return clothes before paying for the products they’re happy with.
This is exactly the approach smaller businesses can take. While it sounds like a handful managing customer credit, the bulk of the legwork can be outsourced to external providers. It’s simply a case of adding the external payment option to your site, with whom the transaction will be completed. Yes, these external providers will take a percentage from your sales – but, as mentioned, it will be a percentage of something you wouldn’t have had otherwise. Again – would you rather have 90% of £1,000 or 100% of £0?
Time for change?
At Fluid Digital, we build bespoke Magento ecommerce sites for business of all shapes and sizes.
Need a site that gives you the flexibility to attract and maintain customers? Our team of Magento-certified developers can assist you every step of the way with a site that’s packed full of innovative features. Whether it’s flexible payment or tailored content, we have all the experience and know-how necessary to deliver for you and your business. Speak to the team today for more information on any of our services.