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.

Encouraging customers to buy well

As the country continues to adapt and overcome coronavirus challenges, many households have had to rethink their budgets. When asked, 78% of respondents said their spending plans had been impacted by the UK’s lockdown measures. But of those, nearly half (47%, as opposed to 57% pre-lockdown) were still planning on using their savings for larger purchases.³

If your customers are weighing up a pricey purchase and a less-costly alternative, it’s worth explaining that the expensive product may outlast the cheaper, meaning they’ll be buying less – and spending a lot less in the long run.

So, instead of making do with a lower spec TV, they’ll be glad they looked at all available payment options – especially when they can binge-watch the show that’s on everyone’s lips in glorious 4K.

Benefits of budgeting

Something that instantly comes to mind when thinking about budgeting is freeing up funds. Maybe more than ever, it’s important to think about what could happen further down the line and save for that rainy day.

Last July, McKinsey released a report highlighting how attitudes of financial decision makers in the UK had changed during the pandemic. Results show that a third of consumers reported a reduction in savings – and of those, half had decreased their spending in the previous month.¹

As a result, this has affected many businesses. However, revising your pricing plan, offering discounts and exploring alternative payment options are just a few ways that may help to draw in sales and increase customer loyalty.

“Spreading the cost with point-of-sale finance is a great way to support your customers when budgeting. It could help them make those key decisions when making important purchases, as well as helping to increase and convert valuable sales opportunities. As the market changes, so does the way customers shop and borrow, which will continue to evolve. As a retailer, adapting to these changes can ensure you remain competitive, and meet the needs of today’s buyers.” says Richard Brassey, Head of Partnerships.

Also, identifying trends early on could help you plan a more effective sales strategy and get your timing right for promotional periods.

In the run up to Christmas, spending skyrockets for many consumers. The Bank of England reported that on average, shoppers will spend 29% more compared to a typical month.2 But with events such as Black Friday and Cyber Monday becoming increasingly popular, more shoppers will take the opportunity to bag a bargain.

Help to spread the cost into affordable chunks

From payment plans to virtual money-saving pots, there’s a host of tools readily available to help customers plan for the future and also afford the items they really want to purchase.

Retail finance can help spread the cost and this can come in handy when looking at monthly budgets. Our research shows that two-thirds (66%) of people between ages 16-24 and 61% between ages 25-39 said that it’s a more affordable way to pay, and having it as an option made them more likely to make a big buy.³

Lockdowns have also been a key factor in these numbers, soaring across all age brackets. 5% of respondents overall would now prefer to purchase an item using retail finance, compared to 0.97% pre-lockdown – that’s almost a 400% increase. And 31% have needed to re-consider their preferred payment method due to monthly budgeting – this was a main priority for younger consumers, who have less capital.³

Remember, retail finance isn’t one-size-fits-all. Offering a variety of payment options could help your customers make that dream purchase, whilst fitting within their monthly budget.