Shoppers’ needs are always an important consideration for any business and as consumers are wanting flexible payment options more than evermore businesses are looking to offer retail financing services. Retail finance services offer many benefits to both business and its customers and here we will run through what retail finance actually is so you can decide if it’s the right choice for boosting your business growth.
Contents
- What are Retail Financing Services?
- Types of Retail Financing
- The Benefits of Offering Finance Solutions
What are Retail Financing Services?
A retail finance service allows businesses to offer their customers payment plans, enabling them to spread the cost of purchases over a period of time without a credit card. Retail finance services can operate online or in-store to cover a wide range of products and services. The finance plans can be both interest free or interest bearing depending on the plan chosen by the customer. Terms usually range from 0-24 months, with interest-free periods available depending on the retail finance provider..
Types of Retail Financing:
Finance with interest
Typically, longer payment terms such as 6, 9 or 12 months will include interest. Whilst the order total will be marginally higher than an outright payment, it gives the customer the option to split the cost into more manageable monthly payments. Finance options with interest often allow for more flexibility than shorter payment plans with no interest as customers can choose their deposit amount bringing down the monthly payment and repayment amount .
Interest Free
The interest free finance option is a shorter payment plan, often up to 3 months, that allows customers to split the cost in 3 without paying any interest. This allows them the flexibility, without any additional cost on their order total.
The Benefits of Offering Finance Solutions
Increased affordability: Retail financing services make higher cost purchases more accessible to customers by breaking down payments into smaller, more affordable instalments.
Boost sales: Offering finance options can allow retailers to attract more customers leading to increased sales. As the barrier to high ticket items is reduced, more products become accessible to more customers.
Improved cash flow: By spreading out payments, customers can manage their cash flow better. This reduces financial strain, leading to both a boost in sales and higher AOV for your business.
Better shopping experience: When you offer finance to customers, you are helping improve the overall shopping experience for them by providing them with both flexibility and convenience.
Attract new customers: Many customers will be actively seeking merchants that offer finance to customers, therefore making you stand out from your competitors who don’t offer this.
Retail financing services can provide both business and consumers a practical solution to making shopping more accessible. Understanding retail financing services and the benefits, businesses are able to see a positive impact in sales, customer loyalty and AOV. On the flip side, consumers are able to make more informed decisions and enjoy a flexible shopping experience.
For business use only.