Convenience is key in the retail sector, especially in eCommerce, where merchants with frustrating or complicated online shopping processes can easily lose customers. Avoiding such an exodus means retailers must be flexible when developing the tools consumers use to make purchases.
Millennials have matured financially, but many remain wary of using traditional credit to buy even routine or small-ticket items. Merchants that support only credit or debit payments thus risk losing these shoppers to more unconventional competitors. Online retailer and brand aggregator Verishop took a fresh approach to this problem and immediately began offering buy now pay later (BNPL) payment solutions to its consumers, company Co-founder Cate Khan noted in a recent interview with PYMNTS.
“Verishop launched in June 2019, and [we] pretty much launched with our [BNPL] payment option,” Khan said. “It was a philosophy right from the beginning that we care about our customers and wanted them to have the most convenience, and so we wanted them to have the payment convenience as well.”
Flexibility is essential to creating the easy, seamless shopping experiences Verishop strives to offer. Younger demographics are searching for retailers that grant numerous product options and payment methods as they continue to eschew credit cards and loans. These customers are also searching for payments that maintain flexibility across multiple channels, including mobile-optimized sites or apps.
How Millennials Are Driving BNPL Growth
Verishop targets consumers aged 25 to 45, a demographic that encompasses older millennials with more disposable income and the youngest of Generation X. This group has plenty of payment and retail quirks, however. Millennials are notoriously brand-agnostic and credit-shy, for example, with one study finding that just 29 percent routinely make purchases from the same brand. This makes supporting innovative payment methods a must as these options promote higher comfort levels for millennial shoppers.
BNPL is not a new payment method. It is rooted in layaway at physical retail chains, in which consumers are invited to lay down installments to pay for pricier goods. Khan noted that BNPL’s impact on millennials can be unique, however.
“People do not want to get their products later, which is how layaway works,” she explained. “[Customers] get [their] products at the end. Right now, with BNPL, [they] get [their] products upfront and then pay in installments, and I think millennials want that type of flexibility. They want the gratification of getting the product now, but they may need more flexibility in payment, so this is a great option for them.”
Offering BNPL can be key to building trust between younger consumers and the retailers in question, Khan noted, as it shows the latter group is looking to provide more personalized support.
“We are already getting different customers than your typical department store [in our first six months],” she said. “I think that what people see is an offer that is compelling to millennial customers, and they feel like they are being spoken to. I think that having flexible payments [says], ‘You understand us. You understand what motivates us, and you know how to speak to us.’”
Retailers must do more than add installments and flexible payment options to their sites to win younger consumers’ loyalties, however. This flexibility must be ubiquitous across all channels on which their customers shop and interact, which increasingly means supporting such payments on mobile devices.
Mobile And The Future Of BNPL
Mobile shopping is an area of intense interest for most retailers, including Verishop. The company currently supports such purchases for consumers using Apple devices, allowing them to utilize BNPL to pay for their purchases.
“I definitely think that we will see more [BNPL] usage on mobile, but that is because mobile usage itself is growing,” Khan said. “[At] Verishop, we see more engagement and mobile usage versus the industry, and I think that is because of millennial users. I think, as time goes on, mobile is going to become a bigger piece of the traffic for everybody.”
Verishop will continue to innovate its payment and commerce offerings in the mobile space, and it is planning to launch an Android mobile app. Supporting flexible mobile payments will likely be critical to retailers’ future successes, and those that fail to offer such convenience could lose out to their more in-tune competitors.