Expanding Market Reach: How Alternative Payments Enable Retailers to Attract New Customer Segments

In today's ever-changing retail environment, drawing in new customers is essential for continued growth and success. Retailers must adapt their strategies and cater to the evolving preferences of diverse customer segments to expand their market reach. Enter Lease to Own (LTO), an effective tool that empowers retailers to tap into new markets and unlock untapped opportunities. Let's explore how LTO enables retailers to attract new customer segments.

Accessibility and Inclusion

Traditional payment methods may present barriers for certain customer segments. In fact, at least 30% of American consumers are overlooked by traditional financing options. This leaves a sizable minority of consumers unable to obtain essential durable goods. As a result, big-ticket items that impact quality of life often remain out of reach, including furniture, tires, electronics, and more.

Buy Now Pay Later (BNPL) has gained traction as a popular alternative payment, however, those with no credit or blemished credit histories often don’t qualify, which leaves them with few options for obtaining the essential items they need.

LTO provides a flexible and inclusive solution with lease plans that can be tailored to fit customers' unique schedules and cash flow needs. This level of accessibility appeals to those who may be unable to qualify for traditional credit options or simply prefer a more flexible payment method. By embracing LTO, retailers can eliminate financial barriers and open their doors to a wider range of customers, including those who have been previously underserved.

Millennial and Gen Z Appeal

Millennials and Gen Z are increasingly influential consumer segments with unique preferences and purchasing behaviors. They tend to prioritize convenience, financial flexibility, and transparency. A survey by Katapult revealed that Gen Z and millennials are 60% more likely to shop from a merchant that offers flexible payment options, compared to their older counterparts. Additionally, younger consumers have a 6% higher likelihood of having used LTO previously, making it an attractive option for retailers looking to attract this demographic.

By offering LTO, retailers can capture the attention and loyalty of these younger demographics, building long-term relationships and positioning themselves as brands that understand and cater to their needs.

Targeting the Budget-Conscious

Customers who prioritize budget management and cost-control represent a significant market segment. LTO appeals to these budget-conscious individuals by allowing them to apply for hyper-flexible purchase plans that allow them to pay over time and purchase anytime. This flexibility enables customers to align their purchases with their financial circumstances, fostering confidence and reducing financial stress. Retailers that offer LTO options can capture the attention of these customers and position themselves as budget-friendly shopping destinations.

LTO not only opens doors to untapped markets but also positions retailers as forward-thinking, customer-centric, and inclusive brands. By incorporating LTO into their business strategies, retailers can thrive in a competitive retail landscape and realize their full market potential.