You have a lot of traffic, product pages that are optimized for conversion, and a checkout experience that is simple and straightforward. Although your conversion rate for online sales is only 2 percent to 3 percent, that’s considered a good conversion rate in the industry. What is it about your visitors that isn’t converting?
Customers aren’t hesitant to buy from you because of your items, your brand, or your website design, according to several shops. It is entirely up to you to set the price.
When it comes to online shopping, up to 87 percent of customers claim that price is the most important element in their purchasing choice. Due to unanticipated additional expenditures, over half of all shoppers (49 percent) abandon their shopping baskets.
Price is also one of the most frequently encountered roadblocks for buyers. It’s also where Buy Now, Pay Later (BNPL) can prove to be a valuable secret weapon for eCommerce retailers.
Shoppers can afford to make more frequent or higher-value purchases when the total cost of a transaction is divided into many instalment payments, and you can increase your conversion rate as a result of doing so.
The Great Recession (2008) started a general movement in consumer behaviour away from credit and toward alternative payment alternatives such as BNPL, debit cards, and digital wallets during the past decade and a half. It is estimated that digital and mobile wallets currently account for 45 percent of all eCommerce payments. A big portion of the reason for this shift away from credit cards may be attributed to millennials. In addition to having lived through two global financial crises first-hand (the Great Recession and the COVID-19 pandemic), an increasing cost of living, and overwhelming college debt (which is 300 percent higher than that of Generation X), millennials have accumulated more debt than any other generation. As a result, they are highly cautious when it comes to credit cards and the potential for debt accumulation.
Millennials are nearly one-quarter of the population who do not have a credit card; nevertheless, they are not the only ones who are saddled with credit card debt. On average, members of Generation X and Baby Boomers have greater credit card debt than members of the millennial generation. Many consumers have moved to less hazardous payment solutions, such as digital wallets, debit cards, and BNPL, in order to avoid getting into debt. BNPL is the only one of these that allows consumers to purchase products without needing to have cash on hand, in a manner comparable to using a credit card. However, unlike credit cards, BNPL has the distinct advantage of having no impact on the borrower’s credit score. The fact that up to one-third of shoppers use BNPL particularly to avoid using credit cards should come as no surprise to anyone.
BNPL users are currently dominated by Generation Z and millennials, who account for approximately 75% of the total. The Gen Xers and baby boomers will nibble away at that percentage, eventually accounting for approximately one-third of all BNPL users by 2020. According to expert projections, as Generation Z continues to accumulate spending power, the use of BNPL will only continue to increase.
The use of BNPL is becoming more popular — and more swiftly. With a global epidemic straining people’s wallets and customers purchasing online at an all-time high, the past year has seen a significant acceleration in its growth. In just fifteen months since the outbreak of the pandemic, the number of people using BNPL has increased by 85 percent.
It is easy to use, and it allows customers to stretch their payments over a longer period of time, which is why more than half of BNPL users choose BNPL for their online purchases. One interesting fact about flexible payment methods is that nearly four out of every ten buyers prefer them expressly because they “trust” them.