A quarter of UK retailers are not capitalising on the rise in consumers spending on finance – such as ‘Buy now. Pay later schemes, according to new research.
The study, conducted by innovative finance solutions provider, Duologi, found that consumer finance is on the rise, with 16% of consumers now purchasing on finance, rather than credit cards and bank loans, compared to just 6% in 2017.
Moreover, 83% of consumers said they would consider using point-of-sale (POS) finance in the future, compared to 78% in 2017.
Some retailers have already started to usher in more flexible payments, with the likes of H&M offering shoppers the chance to buy goods and pay in instalments and even M&S offering a similar scheme on its fashions. But it isn’t just the preserve of the larger retailers. Niche plus-sizer boutique and with Growth 2000 retailer Pink Clove is also doing it.
With 168,490 registered SME retailers in the UK, it means that approximately 42,000 businesses are not offering POS finance, and therefore missing out on this growing opportunity.
The report, Finance: an SME issue, surveyed 500 SMEs across a range of retail sectors about their concerns for the future and their knowledge and understanding of point-of-sale (POS) finance.
For the SME retailers that do offer finance as part of their business model, there is a certain degree of awareness around the business benefits it can bring. However, there is also a clear push from consumers. More than a quarter (27%) of retailers said that their customers simply expect finance in the current climate, with another 28% saying that customers were directly asking them to provide it.
Michael Bevan, CEO of Duologi, explains: “Clearly consumer demand for finance is increasing and they are now more willing to borrow funds than ever before. As such, there is a huge opportunity for SME retailers to offer a helping hand, as well as boost sales and their own bottom line.”
Bevan adds: “However, there are still a lot of retailers that aren’t capitalising on this growing market, despite fierce competition and pressure to keep pace with the demands of this ever-changing industry.”
He concludes: “If retailers are to thrive in the future it’s important that they are empowered with the knowledge and tools needed to excel. Fortunately, there are now a range of POS finance options available that are quick and easy to implement and can make paying by finance as easy as paying with a card.”