Retailers who use repayment technology to offer point of sale finance, both in store and online, are seeing improved revenue, enhanced bottom-line profitability, and long-term brand value, according the new research by Hitachi Capital Consumer Finance.
Increasingly, consumers are seeking better service and easier ways to pay and Hitachi’s survey of over 3,000 customers confirmed that the availability of finance has a significant impact on purchasing decisions and spending behaviour, and driving incremental sales.
Lisa Harrison, Head of Retail at Hitachi Capital Consumer Finance, said: “Offering customers the option to pay via a variety of finance options, from Interest Free to Buy Now Pay Later, is a huge advantage in the current market place.
“The research shows that retailers who don’t offer finance risk losing a staggering 44% of customers; with 26% deciding not to go ahead with the purchase or choosing to buy from another. So this could mean the difference between closing a sale and losing the customer to a competitor.”
When Hitachi analysed incremental sales they also found similar trends with, on average, 53% of customers increasing their spending across most sectors.
Different finance products and credit terms also had a direct impact on revenue, increasing the average transaction value for customers.
70% of customers using Interest Bearing Credit said they spend more compared to Interest Free. On average another 16% of customers would increase their spending, if the borrowing was over a longer period.
Lisa Harrison added: “Our research confirms that there is a direct correlation between offering point of sale credit and increased sales. This can be up to 80%, with nearly 50% of customers who take advantage of the credit, increasing their spending in store and online.
“This demonstrates that, used tactically, the availability of different finance options can transform your business, delivering significant levels of incremental sales, higher sales margins whilst increasing brand value.”
- 83% of customers who responded to the survey said that the fact the retailer offered finance heavily influenced their decision to purchase, with nearly 50% saying it played a very important’ role.
- Retailers who don’t offer finance risk losing nearly 44% of customers, with 26% deciding not to go ahead with the purchase, or choosing to buy from another retailer. Another 18% would have second thoughts about buying the product altogether.
- Only 33% of customers would have bought the same day using cash/credit card.
- On average 53% of customers increased their spending when they used point of sale finance across all retail sectors.
This article is based on a press release issued by Hitachi.