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There’s a modern spin on layaway, and customers don’t have to wait until their goods are paid to bring them home.
Buy now, pay later (BNPL) is a popular payment option that lets customers pay for products and services in installments through short-term financing. For the past few years, BNPL has only been offered by larger merchants. But now, a new generation of BNPL service providers like Afterpay are bringing the payment method to small- and medium-size businesses, allowing them to get a slice of a burgeoning US$9.2 billion market.
For merchants of any size, there’s a compelling reason to offer BNPL: driving overall sales revenue. The payment option can help increase orders, boost average cart size, and attract new and more frequent customers. Research shows using BNPL increases average basket value by as much as 50 per cent, while average orders increase by 85 per cent when BNPL is offered. In addition, Afterpay customers shop 50 per cent more frequently than traditional customers.
When it comes to customer reach, BNPL can help attract customers who have credit cards and those who don’t. People without access to credit often have to postpone or abandon purchases, or opt for a lower-grade product or service. BNPL doesn’t require a credit card and the approval process is fast and easy. For those with credit cards, BNPL is an enticing alternative because these services tend to be interest-free. While interest may be charged if the customer opts for a longer payment term, it typically costs much less than using a credit card.
Adding a BNPL option is also a great way to attract younger shoppers. Research shows Canadians 18 to 34 are significantly more likely to use BNPL now and in the next 12 months for purchasing in store or online than Canadians 55+. The appeal for younger Canadians is BNPL makes it easier to budget spending, it’s a more convenient and easy way to pay, and they don’t have to pay for a purchase upfront.
BNPL is also easy for merchants to set up and manage. With a BNPL service, simply integrate the service with your existing website payment page or real-world tills. If you are using Square with Afterpay, this is already done for you. The customer is then offered BNPL as part of the standard payment options. If they accept, they usually pay a deposit. Then, they sign an agreement to pay the balance in installments, which can range anywhere from six weeks to 12 months for major purchases.
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How to promote BNPL to your customers
Signing up with a BNPL service is a great start. The next step is to ensure your customers know you offer it. You may also need to educate some customers on what BNPL is.
Online website messaging: Ideally, mention your BNPL offering on every page of your website. This will guarantee your customers learn you offer it. At a minimum, have information about BNPL on your homepage, special landing pages, product pages, checkout page, and in your FAQ section. If you use a chatbot, make sure it can explain BNPL to any customers who don’t know about it. Likewise, if you employ staff for human chat, make them aware you’ve added the option to your website.
Social media messaging and promotion: Incorporate your BNPL offering into your social media messaging. Adjust the level of prominence according to the content. For example, if you produce educational content, mention your BNPL service in the comments. You can also tag Afterpay so people can visit the company’s profile if they wish. If you’re producing more promotional- or sales-driven content, highlight your BNPL option. This makes it immediately obvious to potential customers there’s an easy and convenient way to pay.
In-store signage: In-store signage is one of the simplest but most effective ways to let customers know you offer BNPL. Have clear decals on your doors and windows and place signage in key areas throughout the store, as well as on the way to the checkout.
Email marketing: To comply with privacy laws, your email marketing list must only contain customers who have actively opted in to receive marketing emails. These customers are likely to be highly engaged with your company and learning you now offer BNPL will be exciting news. Make it even more exciting by introducing it with a special promotion.
Once you’ve made the initial announcement, keep up the momentum by mentioning your BNPL offer regularly. Again, adjust the level of prominence to suit your overall message. This reminds existing customers of the service and ensures new ones get to hear about it.
Word-of-mouth marketing: Train your staff to mention BNPL whenever they think it’s appropriate. At a minimum, have them remind customers it’s available if they’re making a bigger-ticket purchase. If you work with influencers, ask them to mention it too. Encourage your most loyal customers to mention it to their friends and consider offering an incentive for doing so.
Ready to get started? Square customers now have the added flexibility of Afterpay. Afterpay is now integrated with all Square eCommerce products, including Square Online, Square Online Checkout, and Virtual Terminal.
Advertising feature provided by Square. The Globe and Mail’s editorial department was not involved.