Global retail sales growth decelerated in 2020 by -5.7% due to the impact of the worldwide pandemic. However, with vaccination drives picking up and economies booming again, retailers are gearing up to provide various offers to attract customers.
A popular sales promotion tool is the ‘order now and pay later’ mechanism. It has been primarily used in B2B businesses but is now getting popular among retailers as well.
Here’s why order now pay later is a blessing for a retail business:
Revenues are often directly proportional to volumes. For instance, certain firms might struggle with low-profit margins but can enjoy higher profitability through increased volumes.
An order now pay later payment scheme generally has a minimum order limit for availing the same. This technique enables the customers to place larger orders, resulting in higher order volume for the retail business. Ultimately, higher volume translates into higher sales for the firm and, in turn, leads to significant profitability.
Increase in the number of re-orders
Consumers often would re-order from businesses wherein they have had a past good experience. The order now pay later scheme allows customers to order the required products right away and pay later and manage their finances conveniently.
The availability of the option makes the customers more likely to re-order from the business, boosting the sales of the retail store. In addition, customer satisfaction plays a vital role in re-orders, and the order now pay later payment option helps businesspeople achieve that.
More attractive than discounts
A business can either offer a discount to their customers or allow them to pay at no cost EMI. The customer may get an immediate discount of 5-10% through a promotional scheme. But, the option to pay in 3-6 months, wherein they can see a low monthly amount through no-cost EMI calculators, is more attractive to them.
Moreover, a customer may not have a large amount immediately but may be able to pay it easily in 3-6 months, making them more likely to buy through this strategy.
Better conversion rates
The pay later payment scheme has better conversion rates for the businesses as cart abandonment decreases. A retail store is more likely to convert a potential customer into a client by allowing them the ability to pay at their convenience.
In fact, an increase in conversion rates to the tune of 20-30% has been noticed by various companies offering the payment system.
Higher and better reach
Sometimes, a retail firm may experience stagnancy when it comes to increasing its customer base. It may have reached a ceiling in terms of the number of customers that visit the store.
The order now pay later payment option enables a retailer to attract new customers, especially those who prefer to purchase on credit. An increased customer base and a more significant conversion rate translate simply into higher sales volumes and amounts.
Revenues and volumes are critical performance indicators based on which businesses are valued. Order now pay later system is an innovative business driver which enables businesses to unlock value. Customers can use no-cost EMI calculator to estimate their EMI payments.