Spokesperson: Huw Phillips, Sales Director, Deko
The festive shopping season is upon us and, given the events of the past two years, this year, more than ever, will be critical for retailers. Making up revenues lost during the lockdowns and boosting their sales are clear priorities, but supply chain constraints and labour shortages threaten to reduce stock levels, pushing up prices and squeezing retailers’ margins.
Despite the challenging backdrop, retailers will be hoping that a UK emerging from lockdown can drive a wider business recovery. To increase their chances of success, it is crucial that merchants have the processes in place to help them to capture the maximum amount of revenue as they seek to drive business growth. Ensuring businesses have the right payment processes in place will be a key driver in improving their checkout rates.
Retail finance will play a key role in this success. This technology is continually evolving, and there is now a range of flexible payment products that can facilitate transactions to maximise merchant’s checkout power. As we head into the retails sector’s busiest few months of the year, these options can ensure that businesses secure increased sales – particularly those of a higher basket value.
Capitalise on the expected increase in flexible payments
Traditional payment methods, like cash and then credit cards, have driven sales for decades, but it is becoming increasingly clear that retail finance products can now help businesses of all sizes to reach a much wider customer base. For instance, recent research has found that nearly 9.5 million Britons have avoided buying from retailers that don’t offer buy-now-pay-later (BNPL) options at the checkout. This represents a significant amount of lost income for those UK-based retailers who don’t offer more flexible ways to pay.
The number of consumers using retail finance is also set to grow, with overall BNPL spending in the UK expected to rise from £9.6 billion in 2020 to £26.4 billion in 2024. Merchants that offer a variety of payment options will be able to capitalise on this trend and maximise their checkout power to boost revenue.
Flexible payments, more sales
The checkout finance sector has certainly seen a rapid evolution in recent years, with new options now available that offer not only BNPL but a wide range of products to suit all sectors and basket sizes. These include revolving credit facilities, personalised repayment plans and bigger loan ticket facilities. Each of these has its own advantages, but importantly they all ensure that more sales at checkouts are successfully completed.
At Deko we have found that the best approach is to have a multi-product, multi-lender offering, which has been proven to give a material boost to checkout approval rates. Our platform has been built to provide a range of finance products that are tailored for all business types and basket sizes. Every retail partner at Deko is carefully matched to a range of different lenders, meaning that there is a much higher likelihood that the sale will be completed. On average, Deko has been able to boost checkout conversion by 26% for merchants on its multi-lender platform, allowing us to say yes to more customers.
Moreover, multi-lender retail finance products offer real benefits as basket sizes become bigger. They are particularly helpful for ensuring that purchases above £250 are completed, where the need to access a range of finance providers becomes more crucial. As a result, flexible payment options can mean that retailers secure more sales of larger value, regardless of the size or sector of their business.
Leveraging new consumer habits
The upcoming golden quarter, encompassing the festive season and Black Friday sales, will be a key period for merchants. In 2019, the UK saw more spending during Black Friday than any other European country at £8.6 billion. Merchants should make sure that their payment process is updated to generate maximum sales from this increased activity.
Getting started with these products doesn’t need to disrupt business operations. Technology in the retail finance sector is progressing at a rapid rate, and integrations can happen very quickly – for example, Deko’s payment solutions can be onboarded in as little as 24 hours.
This means that merchants of all sizes and sectors can get extra checkout power almost immediately and be well prepared for the festive sales rush. For independent retailers or businesses in sectors that traditionally see larger basket sizes, this can make all the difference between a completed sale and a purchase that is abandoned at the last moment.
Spurring wider growth
Bespoke retail finance tools can be a driving force behind accelerated growth for a business. Saying ‘yes’ to more customers and the sales this will subsequently generate, will leave a company in a strong position to capitalise on the economic recovery. A range of flexible payment options are now available to all merchants to ensure that customers can complete as many sales as possible, and now is prime time to take advantage of them, and make this festive season extra merry.
Spokesperson: Huw Phillips, Sales Director, Deko
