Consumer insights into POS Finance: what we learned

It’s no secret that retail faced a number of challenges in 2018. Amidst low consumer confidence in the run-up to Brexit, declining footfall on the high street, store closures and ever more agile online competitors, retailers across the board are having to work harder than ever to drive sales, loyalty and customer interest. 

But there’s life in the British high street yet. According to some new research, town centre spending is expected to increase by 4.9% (£5.3bn) over the next five years.

As consumer habits change, businesses are demonstrating remarkable resilience; embracing new trends, evolving their offerings and nurturing deeper relationships with customers. Point-of-sale (POS) finance is playing a significant role in this shift, giving customers the freedom and confidence to make larger purchases on their own terms.

To help our clients and their customers navigate the changing world of point-of-sale finance, our first consumer survey unravels customer motivations, attitudes and requirements.

Why do people choose point-of-sale finance?

To understand what customers are looking for in a finance product, it is important to understand why people might want to use point-of-sale finance in the first place. According to our research, convenience (47%), ability to budget (44%), good value (41%) and ease of the application process (35%) are the top of the list of possible motivations.

Two-thirds of respondents took out finance to purchase furniture (60%), making this the most popular product to buy on finance, followed by cars at 37 per cent. In many cases, how we use finance seems to reflect our demographic. Men (41%) are more likely than women to use point-of-sale finance to pay for electronics, whereas women are more likely to finance a furniture purchase than men (57%).

Affordability is absolutely key. More than half of respondents say they wouldn’t have been able to make the same purchase if point-of-sale finance hadn’t been available (54%) and 83 per cent indicated the availability of finance allowed them to spend more than they would otherwise have done. 

What do customers look for in a point-of-sale finance product?

The size of the monthly payment the single most important factor for consumers (57%), with many happy to spend a little more on interest or spread payments over a longer period of time to keep payments low. This is closely followed by APR (50%), with the overall loan amount another key consideration (39%). The results indicate the importance of clear signage and explicit break down of costs to simplify the decision-making process for customers. Less concrete factors like existing commitments (22%) and deposit amount (20%) should also be discussed with consumers to help them make a truly informed decision.

Where do consumers go to research their next big purchase?

As consumer behaviour evolves, online research is having a huge impact in many areas of retail. Online product reviews are by far the most trusted by consumers (37%), followed by expert reviews (19%) and family and friends (15%). Our survey also revealed an interesting gender divide; men are more likely to research purchases via desktop, while women are more likely to use their smartphones.

With a significant proportion of respondents visiting store websites (52%), using search engines (50%) and browsing manufacturer websites (39%) to find out more, it’s vital to ensure information online is easy to find and understand. Two-thirds of respondents use laptops or smartphones to carry out this research, and 19% use desktop computers. This underlines the need for a strong mobile strategy and responsive buying journeys that work effectively across all devices.

While digital requires a lot of attention these days, it’s important not to underestimate the importance of offline research. One third of respondents said they discuss bigger purchases with trusted family and friends (33%) and almost half of respondents said they tend to research their purchases in-store (46%), highlighting the need for clear signage and well-informed and approachable colleagues.

Opportunities for businesses

Adapting to customers’ changing expectations and embracing innovation will be key concerns for retailers looking to stay competitive. The emergence of concept stores, brand experiences and in-store amenities like wifi and coffee shops are all indicative of a growing trend^* for experience-focused retail.

Creating a great experience for the customer isn’t just about coffee and wifi. Attention to detail should be visible at every level of the shopping experience from store layout to customer service. Is it easy for the customer to find what they are looking for? How quickly can their purchase be delivered? What payment options are available? Get the basics right and everything else will fall into place.

Buy, Apply, Confirm, Sign

In retail, the moment where the shopper decides to buy is often called the “moment of truth”. In an instant the customer can decide to buy from you or take their custom elsewhere. This decision can be based on many factors; from price to speed of delivery, quality of customer service and/or overall experience.

As expectations and attitudes have changed, a seamless purchasing journey has become a priority for retailers and customers alike. With this in mind, Barclays Partner Finance have launched Sign Anywhere; a digital one-click application process that makes it easy for customers to review and sign their finance agreements on any device, at a time that suits them.

By delivering the agreement in easy-to-read, bite-sized information, Sign Anywhere minimises scrolling, making for a more efficient journey and delivering better customer outcomes.

2019 will be a pivotal moment for retail. Customers require a consistent and reassuring customer experience to drive conversion and boost profitability. Against an uncertain economic backdrop, retailers will need to adopt a holistic approach where online, bricks-and-mortar, experiences and payments all work as one.