By Katapult on May 25, 2023 1:00:38 PM
In today's competitive retail landscape, optimizing online sales is crucial for business growth. One effective strategy gaining traction is offering alternative payment options to customers. By providing these solutions, retailers can significantly increase cart conversion rates and boost overall sales. Here are five ways integrating alternative payment options, such as lease to own (LTO), can enhance the customer experience and maximize sales opportunities.
1. Empowering Purchasing Decisions: By incorporating alternative options at checkout, retailers empower customers to make immediate purchasing decisions without worrying about upfront costs. This flexibility appeals to shoppers who may have budget constraints or prefer spreading payments over time. Payment solutions, such as LTO (lease-to-own), play a vital role in benefiting both merchants and consumers. Not only do retailers reach a large and loyal consumer base, but formerly excluded consumers can now take home much-needed products. In fact, a reported 67% of LTO users stated that they would not have been able to purchase durable goods without the option to finance. By removing financial barriers, retailers can tap into a broader customer base and increase the likelihood of conversion.
2. Enhancing Customer Experience: Payment options like LTO not only provide financial convenience but also improve the overall shopping experience. With a seamless integration of LTO technology, customers can select their preferred payment plan during checkout, offering a personalized and hassle-free lease plan that fits their schedule and cash flow. The availability of LTO also adds a layer of convenience that aligns with evolving consumer preferences, resulting in higher customer satisfaction and loyalty. In fact, over half of Americans (54%) would be more inclined to shop at a retailer that offers flexible payment alternatives, such as LTO or Buy Now, Pay Later (BNPL). Younger generations, in particular, are highly motivated to use non-traditional payment methods, with 60% of Gen Z and millennials indicating that they would be more likely to shop from a vendor that provides flexible payment options.
3. Boosting Cart Value: Alternative payment options encourage customers to explore additional products or upgrade to higher-priced items. This increase in cart value translates into higher sales for retailers, ultimately driving revenue growth. In fact, electronics retailer, Maxandfix, saw a 30% increase in average order value (AOV) once they offered LTO at checkout.
4. Attracting New Customers: Integrating alternative payment options can attract new customers who may have been hesitant or unable to make a purchase due to the absence of flexible payment solutions. Traditional financing options overlook an estimated 30% of shoppers, but by offering LTO at checkout, retailers can unlock the door to millions of potential new customers who seek more accessible and convenient payment methods. By providing financial opportunities through flexible payment options, merchants have the potential to cultivate strong customer relationships, fostering enduring loyalty and ensuring higher customer retention rates.
5. Mitigating Cart Abandonment: Cart abandonment is a significant challenge for online retailers. Unexpected extra costs at checkout are a leading cause of cart abandonment. By offering alternative payment options like LTO, retailers can address this pain point, giving customers the ability to pay over time with a flexible purchase plan and avoid sticker shock. This reduction in cart abandonment rates directly impacts sales, leading to increased revenue and profitability.
Integrating alterative payment options such as LTO into the checkout process presents a compelling opportunity for retailers to increase cart conversion rates and incremental revenue. By empowering customers with flexible payment solutions, enhancing their shopping experience, and mitigating cart abandonment, alternative payment options serve as a powerful tool in driving revenue growth. As consumer preferences continue to evolve, embracing payment options such as LTO can position retailers ahead of the curve, capturing the attention and loyalty of a broader customer base.
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