Why are more retailers adding buy now, pay later options?
Atome's buy-now-pay-later services can help retail partners increase customer spending and conversion rates by breaking purchases into smaller amounts. Photo: Atome
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A growing number of retailers are adopting solutions that let their customers spread their payments into interest-free instalments to improve their shopping experience
As we gear up for Chinese New Year, everyone is thinking of ways to treat themselves or their loved ones, especially after a challenging 2020.
At beauty retail chain Sephora, it’s easy to fill up a shopping cart from their range of cosmetics, skincare and haircare products. A visit to fashion retailer Zara could also be on the cards for some fresh threads.
However, with tightening budgets amid the recession brought on by the pandemic, shoppers are understandably deterred by purchases that require a lump-sum payment.
Let’s say a customer is looking to buy the baseline model of the new MacBook Air from iStudio. Paying for it in full would cost S$1,449. Whether that customer is a student or a reasonably well-established corporate warrior, that’s still a relatively large financial commitment, especially in these times of economic uncertainty.
With Atome, one of the leading platforms that offer buy now pay later (BNPL) options, the same MacBook Air model could be bought for S$483 per month, paid over three instalments with zero interest or hidden fees, making that big-ticket purchase more affordable.
Over at Sephora and Zara, purchases from as little as S$10 can be paid over three interest-free payments using Atome.
Consumers increasingly expect payment convenience and flexibility when they shop at their favourite retailers.
THE BUY NOW, PAY LATER DIFFERENCE
Atome partners leading retailers from several categories including beauty (Sephora, Beauty Fresh), fashion (Zara, Charles & Keith, Pull&Bear, Aldo), lifestyle (Marks & Spencer, Eu Yan Sang) and travel (Agoda, Fullerton Hotel) helping them enhance their customer shopping and payment experience.
With a growing number of retailers adding BNPL services to their payment options, let’s break down exactly how merchants benefit:
- Higher customer conversions: How often have we added items to our checkout cart only to baulk when we see the final tally at the checkout screen? BNPL reduces the upfront cost, making the purchase more manageable by paying one-third of the price and spreading out the rest over two months. This increases the likelihood of customers “checking out” their purchases and reduces abandonment of shopping carts.
- Bigger basket sizes: When given the choice of spreading out payments over time, retailers have seen consumer basket sizes grow, without having to resort to discounts or promotions. In Atome’s case, their retail partners have experienced an average 17-per-cent increase in their ticket order size and 30-per-cent higher conversion during checkout.
- Better customer experience: If there is one thing that today's consumers expect from their shopping experience – especially Gen Zs and Millennials – it’s personalisation and choice. Offering payment choice and flexibility improves the customer experience, building a stronger long-term relationship between retailer and consumer.
A SHOT IN THE ARM FOR RETAIL SALES
This has been the experience of retailers such as IUIGA, a seller of premium quality home goods, from furniture and bedding to bathroom accessories. IUIGA co-founder Jaslyn Chan is a firm believer in improving her customers’ shopping experience and said the Atome partnership is a step in the right direction.
“Our customers are now able to buy their favourite bedding, kitchenware and lifestyle essentials today, and pay over three interest-free payments in a transparent and easy experience,” she said.
BNPL can also help to broaden a retailer’s customer base to include younger Gen Z and Millennial consumers, who have less disposable income. It may also attract customers who are concerned about the economic uncertainties wrought by COVID-19 and want to better manage their budget and finances.
This can translate into increased sales, as Ms Chan discovered.
“Our very first Atome Exclusive Day doubled my average basket size and increased the total number of transactions by 15 times in a single day,” she said.
IUIGA's Atome partnership has seen the retailer's basket size double and order volumes increase by as much as 15 times.
In the growing BNPL space, Atome has emerged as a leading brand that has the technology and capital to work with big and small retail partners, both online and across brick-and-mortar stores.
Atome’s industry-leading AI-based credit-and-risk assessment technology minimises the risk of extending credit to customers who may not be able to afford certain purchases. On the merchant side, Atome pays their merchant partners the full amount within three days, eliminating any risk on their side.
IMPROVING THE CUSTOMER EXPERIENCE
In just under a year, Atome has grown to partner over 2,000 leading online and offline retailers across the fashion, beauty, homeware, travel and lifestyle segments in Singapore, Malaysia, Indonesia, Hong Kong, Vietnam and mainland China.
This represents a ready-made opportunity for Singapore retailers who want to expand into these markets.
Ultimately, Atome aims to leverage the benefits of BNPL to help retailers reach and engage a new generation of tech-savvy consumers by offering them a better shopping and payment experience. This deepens the brand’s relationship with their customers, increases loyalty, and in the long run, improves sales.
Find out how partnering with Atome can help businesses grow.
