Applying Digital Lessons to Layaway
This holiday season, shoppers trying to afford everything on their wish list might need an alternative to paying with plastic. According to Deloitte, about 17 percent of all holiday shoppers will use some sort of layaway program to buy gifts this year. For many shoppers, layaway has served as a traditional alternative to using credit cards to make large purchases.
Today, alternative payment methods (APMs) are bringing payment options like layaway into the digital era with simpler payment structures, an overall better customer experience and increased loyalty. Online retailers should consider these benefits when implementing non-credit card payment options to increase sales.
Look Beyond 'Big Ticket' Items
While layaway is one possible solution for shoppers looking for a credit card-free payment option, it might not be the best answer for consumers looking for a budget-friendly way to pay. A complicated service, plus cancellation and restocking fees as well as strict payment schedules, can make traditional layaway programs too restrictive.
During the holiday, shoppers can use all the breaks they can get. While traditional layaway is typically only considered for more expensive items, it doesn’t address the needs of those who want to pay for all of their holiday shopping over time. Although each item might be affordable individually, those stocking stuffers add up and collectively can put a lot of pressure on a consumer's budget.
Today’s shoppers are used to being catered to, so retailers should look for payment methods that fit their needs and preferences — not the other way around. Modern layaway and financing options are meant to provide flexibility and convenience both in-store and online on all purchases, not just “big ticket” items.
It’s All About the User Experience
One benefit of layaway is that shoppers can put gifts on hold that might sell out before they can afford to purchase them. Depending on the retailer, however, layaway might not be available for every item. For example, more expensive, “big ticket” items like high-end electronics or appliances could be available for layaway, but the season’s must-have toy might not. That’s enough to turn even the happiest of holiday shoppers into a Grinch.
Whether in-store or online, checkout isn’t just about how a customer wants to pay; it’s a chance for retailers to provide value to their shoppers. BI Intelligence found that 46 percent of cart abandonment occurs at the payment stage of checkout. This holiday season, it’s critical for retailers to get their shoppers from “add to cart” all the way to the “thank you” page. Non-credit card payment options offer retailers a chance to do this by enhancing the holiday shopping experience. With multiple payment options that apply to all merchandise, retailers can let shoppers customize their checkout process and payment to fit their personal needs.
For shoppers who don’t like to overuse credit cards, they need other methods to pay for purchases over time. While traditional layaway does provide a great option for budget-conscious shoppers, it doesn’t align with customers’ desire for instant gratification.
Modern versions of layaway bridge the gap between layaway and financing, allowing shoppers to get their goods instantly, yet pay over time in affordable payments. It’s win-win for both shoppers and retailers — shoppers instantly get their purchases, and retailers don’t have to worry about collecting payments and holding stock.
A report by Nielson found that, for online retailers, only 13 percent of shoppers in North America are completely loyal to a brand. Lack of brand loyalty is even more significant during the holidays, when customers’ inboxes are being flooded with promotions from competitors. Letting shoppers make purchases on their own terms is one way for retailers to increase customer loyalty, attract more customers and drive sales.
While layaway is just one alternative helping shoppers check everything off their holiday must-have list, retailers should evaluate the benefits of adding more financing options to keep their customers feeling merry all season long.
Bobbi Leach is the CEO of FuturePay, an e-commerce payment solution for the omnichannel shopper.