Payment Processing: Online Payment Systems Come of Age for American Eagle, Orvis
American Eagle has been able to build a system wherein online purchases made using PayPal are noted in companywide invoices that store cash registers can access. Individual stores can offer customers store credit or cash back for their online PayPal purchases, Katruska said.
"Ideally, we'd like to credit the online payment back," she said. "But whenever customers are adamant on what they'd like, we provide it."
In partnering with PayPal, American Eagle — which targets teenagers on through adults in their early 30s — mostly looks to tap into cash-paying customers. "We look to drive that incremental customer to our site," Katruska said. "So when we tell our executives that we have 40 million PayPal customers, that's a good hook."
Bad Reputation Undeserved
The early days of the internet left Orvis executives believing alternative payment programs were for customers with bad credit, said Brad Wolansky, Orvis's vice president of global e-commerce during his part of the eTail presentation. (Wolansky left Orvis in September to become CEO of The Golf Warehouse.)
"We felt [alternative payment] wasn't our customer base," he said. "But over time, it became apparent that our customer base was the opposite of that. We tried to figure who the incremental customers would be as a result."
For Orvis, which works with Bill Me Later, finding the right partner proved challenging. Along the way, the outdoor sporting goods marketer took into consideration finance, operations, stores, catalogs and the web. Among other payment processes, Google Checkout "didn't go on time," he said. "We had to teach them lots of stuff."
But upon settling on a payment vendor, Orvis enjoyed an increase in average order value. "If our AOV is $150 and Bill Me Later pushes that up to $175, it doesn't cost me much to offer a promo," Wolansky said. "And we share the promo cost with Bill Me Later. So if we're giving customers 90 days of free cash, they take it. It's been a win for them, and they're coming to us."