The eCommerce realm experienced a massive shift in 2020. Without the ability to shop in-store due to the pandemic, retailers turned to eCommerce. But something else shifted. Not only did online shopping skyrocket — in the United States alone, eCommerce generated $374 B in sales — but consumer behavior changed, too. The uncertainty of the pandemic called for more flexible payment options, like buy now, pay later (BNPL) solutions. BNPL payment methods give customers more financial freedom to buy the things they need and want.
In this article, we dive into:
- What is a BNPL solution?
- The 4 benefits of implementing a BNPL solution to your online store
What is a Buy Now, Pay Later solution?
A buy now, pay later solution is a payment option that allows customers to pay for products in bi-weekly or monthly payments rather than all at once at the time of checkout.
Some buy now, pay later solutions (including Sezzle) are interest-free, while some charge varying interest rates depending on the payment plan selected.
This unique payment option has been growing rapidly over recent years. According to the Motley Fool, the number of customers using BNPL solutions has increased by a whopping 48.2% since July 2020. This makes the BNPL market quite competitive for industry providers.
BNPL solutions like Sezzle helps brands reach new customers and increase their average order value (AOV), all without any risk. Sezzle users can also enjoy Sezzle Up, which helps users build credit and boost their buying power.
The Benefits of Adding Sezzle
Reach an audience of over 2 million of active Sezzle users.
Splitting payments into four installments encourages larger orders.
We assume all credit risk. You get paid in full immediately.
Sounds almost too good to be true.
BNPL payment solutions are impactful for many reasons from the customer perspective, which is why so many merchants have added them to their online store.
In fact, according to a report from eMarketer, 38.4% of customers opt to use a BNPL method over traditional payment methods to make payments that otherwise would not fit their budget.
The same report found that 37.7% of US consumers have used a BNPL payment option. What’s more, an analysis from Bank of America found that the BNPL industry could grow as much as fifteenfold to an annual value of $1 trillion by 2025. That’s a lot of growth in just a few years.
In other words, customers are looking for financial security and flexibility. Buy now, pay later solutions offer both security and flexibility within an innovative, convenient, accessible shopping experience.
4 Benefits of implementing a BNPL solution
The adoption of buy now, pay later solutions is increasing, and merchants are seeing the impact.
Let’s look at a few of the leading benefits of adding a buy now, pay later solution to your online shopping experience.
1. Boost your sales growth and lifecycle marketing
Making your products more accessible to a wider net of customers means increasing your opportunities for sales growth.
It’s simple math, really: More customers + payment flexibility = more sales
BNPL solutions give merchants the ability to tap into a bigger scope of customers while increasing the likelihood of another purchase. In fact, of the purchases made through Sezzle, 89.8% of them are from repeat customers. What’s more, 59% of Sezzle users cross-shop across other stores, which serves as another opportunity to increase your conversion rates.
Besides increasing sales, BNPL solutions like Sezzle allow merchants to boost their lifecycle marketing. In other words, you can attract customers who are at different stages of the buyer’s journey.
If you want to market to customers who are towards the top of the buyer’s journey (in the awareness stage), you can close the time gap between this stage and the decision stage.
Let’s say you have a pool of customers who is skeptical about purchasing due to factors like price and quality.
With a BNPL solution, not only are you giving them the option to purchase the upfront item on a payment plan, but they can try the product out for themselves without going “all in” on the total payment. If they decide they don’t like the product, they can return it and get their money back, no questions asked.
2. Financially empower the next generation of consumers
As Millennials and Gen Z-ers move into the next stage of their life and start to make bigger purchases, like homes, cars, and other big-ticket items, it’s essential to consider how their shopping behavior differs from other generations.
Younger generations want financial flexibility and stability but don’t necessarily have the credit. According to a report from TransUnion, only 50% of Gen Z-ers have credit cards. What’s more, Millennial debt has increased more than any other generation, followed by Gen Z.
BNPL payment methods like Sezzle that offer credit-building capabilities for customers give younger generations the ability to establish a good credit score and take control of their finances.
3. Improve your market adaptability
As consumer behavior continues to change, it’s imperative that merchants keep up. According to data from McKinsey & Company, consumers across the globe are being more cognizant about their spending. Consumers in the United States, in particular, are cutting back on spending in areas like apparel, transportation, and outside entertainment by as much as 50% depending on the item.
While it might be difficult to predict exactly how consumer behavior will change without seeing into the future (hello, pandemic!), offering financing options now is a great way to stay ahead of the game.
BNPL payment methods give you a leg up. People’s financial situations change all the time, so giving them the option to pay on their terms is not only empowering for the customer, but it positions you as a secure, trustworthy brand.
4. Add social good to your customer experience
Social good never goes out of style. If anything, the world needs it now more than ever.
Plus, making social good a pillar of your business is, well, good for business. Implementing these efforts helps you connect with customers who share your values. In fact, according to the Porter Novelli/Cone Purpose Biometrics Study, nine in ten customers are likely to purchase from purpose-driven companies. According to a recent survey by Sezzle, 81% of consumers will go out of their way to shop and pay with brands that are aligned with their social values.
A BNPL solution like Sezzle has the best interests of our merchants and their customers at heart. The company recently obtained B-Corp status Sezzle attains B Corp certification due to its commitment to social good initiatives .
Sezzle’s mission is to ‘financially empower the next generation.’ We aim to go beyond finance by supporting empowerment across many facets of users’ lives, creating a better world for the next generation through ethical initiatives. New generations are set to inherit the environmental and social crises unfolding today. Sezzle and its community of B Corp brands prove that all industries — even payments — can do their part to provide solutions and make a positive impact today and into the future.
Our platform enables features like:
- Exclusively lend only what customers can afford to pay back
- Built-in budgeting
- Free rescheduling of payments
- Ability to build credit through Sezzle Up
Choosing a buy now, pay later solution like Sezzle means you’re not just positively impacting the lives of your customers, but you’re helping your community as well.
Buy now, pay later solutions pave the way for a financially-sound future
Adding a BNPL solution to your online shopping experience is a powerful way to boost your bottom line, grow your customer base, and stay equipped for whatever the future may have in store for eCommerce.
While we can’t always know what the future holds, leaning into flexibility and empowering customers to take control of their finances and boost their purchasing power is always a smart business decision.
Learn more about how a BNPL solution like Sezzle can help grow your business: https://dashboard.sezzle.com/merchant/signup