One of the biggest problems eCommerce stores face is the ghosted basket.
Customers browse a store, add items they want to their cart, then leave the site before they complete the transaction. Ad retargeting and email follow-ups can entice some shoppers back to the site to make the purchase, but often the moment has gone and the sale is lost forever.
Not only has the sale vanished, but so has the chance to earn the trust and build a relationship with the customer that leads to repeat business in the future.
There are many reasons why someone might decide not to complete an order, but one of the most common is not having the funds at hand.
Covid-19’s devastating effect on retail
This problem has become more of an issue in recent times, with many retailers across the world struggling in the face of Covid-19. Now, more than ever, businesses need to work with customers to ensure the sales process meets their needs.
While their funds may be short, many customers haven't been left high and dry during the pandemic. Wage subsidies, increased welfare and stimulus payments have all helped to ease the burden, so even when people don't have expendable cash in their accounts right now, they know they have some coming.
It's in this sort of environment that ‘buy now, pay later’ solutions come into their own, especially for luxury or non-essential items.
How ‘Buy Now, Pay Later’ works
The idea is simple, but highly effective. A customer finds a product he wants but can't quite afford at the moment. In many cases, if customers can't buy it immediately, they won't at all.
However, they know that they will be able to pay for it if they can spread the costs over a few weeks. Most households have a weekly rather than monthly budget, so it's a lot easier to fit a lot of small payments into a plan than one large expenditure.
With BNPL, someone can buy an item immediately and own it without any extra delays. They have the option to defer all or some of the payments, depending on their account limit. So long as the repayments are made on time, the customer has no extra costs to worry about. There are also no sign-up fees and no interest added to purchase amounts.
More importantly, the merchant gets the money as if it were a normal transaction. There's no additional wait time involved, and they carry on as they would with a straight-up purchase.
This is because BNPL providers like Laybuy cover the purchase cost and take on the debt of the customer. They also assume the responsibility of fraud protection and payment defaults, so the retailer is never out of pocket.
The benefits of ‘Buy Now, Pay later’
There are many benefits to the system. Buy now, pay later systems have been proven to grow sales, increase conversions and increase the basket size, all by offering handy credit to shoppers.
So what are the benefits of this solution?
It helps to increase the customer’s LTV
Giving your customers a more payment freedom, you earn their loyalty. There can be a plenty of different reasons why they can’t make the purchase at this moment.
So, if you want to be a ‘friendly host’ in your store, you should give them opportunity to pay when they’re ready to do it. The more loyal the client is, the more often he comes to your store and the more items he purchases. As a result, you increase the durability of his lifetime value.
It converts more visitors into customers
Let’s imagine: you came to the store, you put many items to your shopping cart (not sure that you need them all), you’re ready to buy them, you’re almost holding these things in your hands! But your joy is disappearing when you’re seeing the total sum, which seems too high for you. Your subconscious mind begins to convince you that you do not need all these things. In the end, you’re just going away from the store.
You didn’t purchase items that you wanted, the sale has been lost and the store owner didn’t get his money. And how would things turn out if you had the opportunity to defer the payment and pay later?
Store owners who use BNPL providers report that they have experienced sales growth, conversion rate increases and larger order values of up to 50%.
BNPL increases your sales
Marketing specialists have already proven that the pain of losing money is much stronger than the joy of buying. The more often we spend money, the more we suffer. We’d like to avoid the money loss and this negative emotions as long as it’s possible, that’s why marketing specialists try to convince customers to buy their products.
BNPL partly solves this problem. You can take the item to home right now and feel the positive emotions from the acquisition. At the same time you will delay the moment when you need to pay. This feature of our psychology affects our desire to buy: we are striving to buy more when our regret at losing money is dulled.
Integrating ‘Buy Now, Pay Later’ to your store
After we found out the advantages of using BNPL solution, the most reasonable question is: “What services offer this option?” With so many BNPL operators available to choose from, it can be hard to work out who to pick for your store.
For those looking for an extra angle, you may find it with Laybuy. One of the key factors for their success is a special Boost feature. While other buy now, pay later options give customers a limit they have to stick to for their purchases, Laybuy allows shoppers to combine their spending limit with their own cash, using their limit to boost their spending power.
Moreover, the service is available internationally (so long as it's a region the store sells to), comes with built-in fraud protection, and is available as an omnichannel solution – retailers can have it online, in their store and wherever else they sell (e.g trade shows).
Best of all, for merchants and developers, is the ease of integration. nopCommerce has built Laybuy’s plugin extension made available through the nopCommerce marketplace. It’s fully integrated, simple and straightforward to add Laybuy payment option into your nopCommerce website.
This article was prepared by Laybuy, a nopCommerce Technology Partner. The company helps millions of merchants to provide customers with a 6-instalment, interest-free, weekly repayment choice.