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Building a sustainable future for customers and retail

The combination of the coronavirus health crisis and uncertainty around rising inflation costs and energy costs have caused - and continue to create – a great deal of volatility and insecurity for consumers and businesses of all types and sizes.

It’s no surprise to see that consumer spending habits have been affected1. This can make it challenging for retailers, as the customers they once knew are changing – from what they buy to how they pay. Our research has shown that two thirds (66%) of consumers has said that their spending plans have been impacted since the start of the pandemic. And of those wanting to make a high value purchase (£500+) their preferred method of payment has changed since restrictions have been introduced.

Giving your customers a range of payment options to suit their individual needs makes sense in the current economic climate, and retail finance has become even more relevant as an option for consumers. However, as a lender, it’s now more important than ever that we act in the most responsible way for our customers, writes Richard Brassey, Head of Partnerships.

Brassey continues; “As a fully regulated business, we ask customers who apply for loans, questions to help us determine the affordability of their loan repayments, both now and for the life of the loan. We pride ourselves on continually introducing changes that have a positive impact on our customers, and we will continue to review and refine our processes as the market continues to evolve.”

Ensuring new loans are affordable for the customer remains a key focus for the Financial Conduct Authority (FCA). This was highlighted in the findings of the Woolard Review2, commissioned by the FCA that were released last year to look at how regulation can support a healthy unsecured lending market, across all sections including retail finance

The findings suggested that more needed to be done to ensure a healthy, sustainable unsecured credit market – particularly in relation to any currently unregulated firms offering products such as Buy Now, Pay Later.

Joshua Fabian Miller, Product & Proposition Director comments: “We recognise that it’s a challenging time for retailers, and we pride ourselves on forming long term partnerships, which create shared value for both our clients and our customers.

“We enable customers to spread the cost of payments at point of need, and in doing so help our clients build their businesses. We pride ourselves on our customer-centric strategy – through creating positive customer outcomes and experiences, we build trust that helps our partners drive future sales and business growth.”

Retail finance can be a great payment option for customers. If you’re a business looking for a new finance provider, then it’s important to check they are taking robust steps to ensure finance is affordable to customers, with no adverse consequences. Minimising customers’ financial burdens should be the responsibility of the lender, but is also a key consideration for the retailer; choosing the right finance provider, and creating the best possible outcomes for their customers.

For more insights relevant to your business and how we can support you, contact us today.

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To discuss your business requirements and how Barclays can support you, contact us today.

INSIGHTS

How retail finance could ease customer fears

The changing retail environment post Covid-19 means the shopping experience for Customers is constantly evolving, but what does that mean for your business?

INSIGHTS

Supporting your customers as spending evolves

We all know the disappointment when we have to rethink our budgets to afford that must-have purchase. But as a retailer, there are things you can do to help your customers feel more confident when it comes to exploring payment options.

References

1 Barclays Partner Finance consumer research based on the responses of 1,006 UK consumers, June 2021.

2 fca.org.uk/about/woolard-review-unsecured-credit