Buy Now, Pay Later Tactics for Building Better Ecommerce Sites

Ecommerce Best Practices | 6 mins

If you’re familiar with the benefits of offering buy now, pay later options on your ecommerce site, you already know they provide your customers with more options and flexibility at checkout. This, in turn, increases the likelihood that they’ll make a purchase, and that these purchases will be larger. 48% of Baby Boomers report that they wouldn’t have made a purchase online without financing, while 44% of Millennials report buying something more expensive than they were originally considering when financing was an option. These options can result in a 17% increase in incremental sales, plus, our own data shows that consumer financing can triple average order values.

However, there is nuance in how and when to implement buy now, pay later options on your ecommerce site. Not all verticals are created equal. We’re going to dive into the specific strategies we’ve seen work for home goods, electronics, and fashion brands.

Home Brands

The home space—furniture, appliances, and renovations—is one of the purchasing decisions that consumers belabor the most. Our research has found that customers consider offerings from an average of 3.1 stores before buying, more than any other type of purchase. How they’ll end up paying for their purchase is a key part of this consideration as well. 78% of shoppers say they want to pay for home goods items in installments. Separately, 38% have a favorite furniture or appliance store, and their top reasons for shopping there are due to a wide selection of products, interest-free installments, and fast delivery.

Strategy: Use Cart Abandonment Emails to Make Buy Now, Pay Later More Effective

Home goods are a hotly contested and highly considered space. Customers are looking for a cost-effective way to remodel or redecorate, and financing can be a great way to set you apart and reach more potential buyers. Our partner The RTA Store knew that if they could find a way to make large cabinet purchases feel less daunting, they could increase sales significantly. By partnering with Bread, The RTA Store was able to offer and extend credit to a broader range of customers without making any sacrifices to their products, services, or revenue.

To stand out and reach customers who may not be aware of the buy now, pay later options that are available to them, The RTA Store sent reminder emails to customers who added items to their cart but left their site without checking out. They saw that emails that included a personalized financing offer saw a 3X improvement in email conversion rates and drove a 155% increase in revenue. In addition, emails that included the personalized financing checkout links saw a 38% lift in click-through-rate and 86% higher AOV.

Electronics Brands

Behind home products, electronics is the next vertical where the demand for buy now, pay later options is highest, with 76% of shoppers saying they would prefer to pay in installments. Millennials in particular are 50% more likely than older shoppers to say that they would shop more at retailers that offer interest-free installments. Electronics shoppers also ranked low prices as the top reason they buy from retailers. Financing options are especially appealing to these price-sensitive customers, but how do you break through to an audience that is so heavily saturated with marketing messages?

Strategy: Fully-integrated, Full-funnel Buy Now, Pay Later Options

Buy now, pay later options can be a deciding factor for shoppers who prioritize price, so surfacing your financing options to have a presence throughout your site is crucial. With Bread, high-powered gaming computer brand Digital Storm was able to enhance their already strong path-to-purchase by taking advantage of Bread’s full-funnel approach. The integration with their previous financing provider made it hard for their customers to discover the financing option, but with Bread, customers can pre-qualify from anywhere on the site, not just at checkout. This led to incredible lifts in both AOV and sales attributed to financing.

In a year-over-year comparison of Black Friday, Bread outperformed Digital Storm’s previous financing partner twofold. After switching to Bread from their previous financing partner, Digital Storm saw a 2.65x year-over-year increase in financed sales and a 1.5x increase in the AOV of financed sales. As a result of this full-funnel integration, Bread has since contributed to 34.9% of Digital Storm’s overall sales, a 2.27x increase versus their previous financing partner.

Fashion Brands

Bread’s research has found that offering installment payments are as or more effective at driving retail sales than recommendations by friends, short checkout lines, and advertising. Buy now, pay later options are extremely efficient within an online shopping experience, but fashion and apparel have an in-person element that can’t be ignored. Many of these brands drive a majority of their sales through their brick-and-mortar presence, and naturally customers want to try on apparel and accessories in person before they commit to paying full price. How can you reap the benefits of offering buy now, pay later options if you also rely on in-store sales?

Strategy: Offer an Omnichannel POS Financing Solution.

An in-store financing integration lets your shoppers discover and learn about their purchasing power while they browse, increasing the odds that they’ll make a purchase while they’re on the showroom floor, instead of waiting to return to a computer. This minimizes friction and improves brand loyalty across the brick-and-mortar shopping journey.

Bread’s white-label solution and in-store capabilities have helped optimize vintage jeweler EraGem’s customer financing experience. Their consumer journey goes beyond ecommerce, demonstrated by their high-touch showroom in Bellevue, Washington. Customers frequently come into their showroom because they’ve seen a product on their website and wanted to see the jewelry in person. If they’re already pre-qualified for financing online, they can simply try the items in-store and complete their purchase at the register. Or, if they’re interested in a piece and want to find out their monthly rate with financing, they’re able to get a quote right there on the showroom floor. The jeweler’s integration of Bread’s array of financing options in-store has empowered customers to walk into their showroom and pay over time, now driving 11% of sales. Since partnering with Bread, EraGem’s financed AOV has risen by 17%, while total financed sales with Bread are 241% higher than with their previous financing provider.

Finding and implementing the right buy now, pay later strategy for your ecommerce site and brand can maximize your conversions and revenue. Every industry is different, so make sure you find the best solution for your unique vertical and business model.