Following an unprecedented 2020, retailers are pivoting to digital as the pandemic fuels the shift away from brick-and-mortar retailing to omnichannel commerce.
However, challenges faced by retailers – including cart abandonment, checkout conversion, increasing basket size – remain the same as they navigate and adapt to this new normal. The solution? Buy Now, Pay Later.
What is Buy Now, Pay Later?
Buy Now, Pay Later (BNPL) is a payment option that splits consumers’ purchases into three interest-free monthly repayments using debit or credit, while solving retailers’ biggest challenges around driving conversion and basket size, as well as encouraging new customers to visit and return. The product is focused on making the shopping experience more seamless for users, rather than acting as a line of credit.
Why are retailers embracing BNPL?
As people are becoming more thoughtful about price and appreciate the importance of personal cash flow in the wake of the pandemic, not only do consumers want more flexibility and transparency in how they pay; consumer preference is also shifting towards debit over credit.
Offering BNPL at checkout thus offers consumers more choice, more convenience, and greater affordability. It also increases the consumers’ purchasing power, which in turns increases the AOV and basket size for the merchant, resulting in an uptick in sales. For instance, a consumer who is prepared to purchase a $200 couch upfront is more likely to end up buying a $600 couch at a retailer that offers BNPL as a payment option.
Reaping the benefits with hoolah
Retailers see a number of benefits when it comes to partnering with hoolah, and have reported an average of 20 to 40% increase in conversion and basket size.
A case in point is Sennheiser in Singapore. For a brand that is accustomed to dealing with customers across different generations in the past 70 years, reaching out to that burgeoning younger demographic is key to understanding and shaping new trends. To do so, Sennheiser Singapore leveraged hoolah’s BNPL payment system to help the younger demographic afford the brand’s competitively priced products. Not only did Sennheiser see a 30% increase in sales made via hoolah in just five months, it also now sees more customers completing their basket purchases, an increase in website traffic from hoolah’s store directory page to Sennheiser’s website, as well as an 80% increase in GMV.
In addition, there is no risk for merchants, as hoolah shoulders all risk associated with repayment. Merchants receive the total payment for any orders upfront, so their cash flow is not impacted. Furthermore, the onboarding process is completely fuss-free for them as it is entirely digital, allowing them to deploy hoolah on their physical and online stores contact-free and with ease. This is especially beneficial during this time as it helps sustain their business through recovery and onto growth.
With hoolah, retailers in Asia now have a solution that is proven to deliver these outcomes at a fraction of the cost, without having to heavily discount or spend more dollars on marketing.
About the author
Launched in February 2018, hoolah is Asia’s leading omnichannel Buy Now Pay Later platform headquartered in Singapore. Creating mutual value for both consumers and merchants through responsible affordability, hoolah empowers consumers to buy the things they need today and pay later via 3 interest-free monthly repayments, while delivering on proven checkout conversion and loyalty for merchants. Active in Singapore, Malaysia and Hong Kong with over 2,800 retail store partners including Nike, OSIM, PUMA, and Samsung, hoolah aims to connect merchants with consumers wherever they are in Asia, promising a convenient, seamless and excellent shopping experience for all. hoolah is backed by investors including Allectus Capital, iGlobe Ventures and Genting Ventures. For more information, please visit www.hoolah.co.