Customer Footfall Analysis
February 12, 2025
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Buy Now Pay Later (BNPL) is the latest buzzword in the retail industry. The media has been full of debates about the benefits and drawbacks of Buy Now Pay Later (BNPL) from the consumers point of view. However, when it comes to the point of view of the merchant or the seller, there has not been much discussion.
It needs to be understood that the pros and cons of Buy Now Pay Later (BNPL) financing are just as important for the merchant as well.
In this article, we will have a closer look at some of the common advantages of Buy Now Pay Later (BNPL) financing.
In almost every case, more than 50% of the retailers have agreed that Buy Now Pay Later (BNPL) financing leads to higher conversion rates. This is because of the fact that this financing makes products more affordable to end consumers by providing them with the flexibility to make payments over an extended period of time.
Merchants who offer Buy Now Pay Later (BNPL) financing online have observed that customers who opt for such financing have a significantly lower rate of cart abandonment as compared to other customers.
It is relatively easy to upsell to such customers by focusing on perceived higher quality of expensive products. Hence, retailers can generate higher sales and even higher margins as a result of Buy Now Pay Later (BNPL) financing.
Almost all advertisements of such service providers also list their retail partners. Hence, retailers are able to get free publicity which increases their brand awareness amongst consumers. This is especially important for small and medium retail companies. It is also common for retail companies to see an influx of customers who are being redirected from the advertisement or website links created by the Buy Now Pay Later (BNPL) service providers.
For example, college students or young professionals are able to purchase expensive gadgets or fashionable clothing thanks to these financing schemes. Before the advent of Buy Now Pay Later (BNPL) financing, many of these people were window shoppers and not paying customers. Now, more people are driven to retailer stores. When this information is combined with point number one mentioned above i.e. higher conversion rates, we can understand why Buy Now Pay Later (BNPL) financing has become the darling of the retail sector.
Buy Now Pay Later (BNPL) financing provides a route for the consumer to buy the consumer good that they always wanted or take that vacation that they have been longing to take for years.
In fact, retailers which sell products such as apparel, accessories and footwear have noticed a higher percentage of impulse spends coming from Buy Now Pay Later (BNPL) financing customers. It has been estimated that close to 60% of all millennial customers have made some form of impulse purchase using Buy Now Pay Later (BNPL) financing in the past year.
The soft credit check happens almost instantaneously. As a result, the checkout experience is not inconvenient for the customers. This is also a key aspect since higher checkout times have been correlated with higher cart abandonment both in the online setting as well as in brick-and-mortar stores.
There is no doubt about the fact that Buy Now Pay Later (BNPL) offers some very attractive benefits to retail stores. This is the reason that the trend to use such financing has caught on like wildfire.
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