Buy now, pay later (BNPL) has quickly become the preferred choice for consumers, particularly millennials. In fact, nearly 40% of millennials have utilized BNPL in the last year, outpacing other age groups.
Recent data by PYMNTS Intelligence reveals that this payment method has a significant impact on subscriber loyalty. Millennials, who dominate the VIP subscriber pack, appreciate flexible payment plans, with the availability of BNPL options being among the top features driving subscription sign-ups.
Additionally, millennials heavily rely on retail subscriptions for their daily shopping needs, and they are also the most demanding when it comes to security and convenience. Subscribers who are reliant on retail subscriptions are more likely to cancel if a BNPL option is unavailable at checkout or if there is no security certification displayed on the site.
The research also highlights that 20% of subscribers plan to cancel their subscriptions after introductory discounts expire. Leveraging BNPL can address this trend by shifting from fixed payment models to flexible ones that match subscriber preferences. Furthermore, providing the option to pay later can sustain their interest and commitment beyond the initial discount phase, as indicated by the data.
Against this backdrop, subscription merchants have a chance to boost customer satisfaction, expand their market presence, and transform occasional discount users into loyal customers by incorporating secure BNPL solutions into their payment options.
As the study notes, embracing this solution not only caters to the needs of valuable subscribers, and fosters retention, but also addresses the demands of millennials, providing the assurance, reliability, and trustworthiness they seek from merchants.
Read more: Subscription Merchants Implement BNPL to Woo Budget-Strapped Consumers
For subscription merchants aiming to capitalize on BNPL for business growth, employing diverse strategies is key. One such effective method involves crafting personalized and flexible plans specifically designed for loyal customers. This approach prioritizes tailoring payment structures to match individual subscriber preferences, ultimately elevating satisfaction levels and fostering stronger customer loyalty.
“Whatever calculus the user performs to determine the payment methods that they want to use, they want more options across more merchants,” Drew Olson, senior director at Google Pay, told PYMNTS CEO Karen Webster in a December interview.
Discussing Google Pay’s recent pilot program with Affirm and Zip, which aims to spotlight multiple BNPL options from these providers at selected apparel/accessory, theater, and travel merchants in the US that offer Google Pay at online checkout, Olson highlighted how offering various choices can boost merchants’ revenues, with Affirm revealing that merchants using its services observe a significant 60% increase in average order values compared to other payment methods.
Capturing millennial attention through experiential bundles stands is another strategy subscription merchants can employ. These bundles combine subscription services with exclusive experiences or additional perks, shaping a compelling value proposition that goes beyond the basic subscription offering.
Another strategy involves leveraging predictive analytics to tailor payment plans. Through thorough analysis of subscriber data and behaviors, merchants can anticipate and offer payment structures aligned with individual financial circumstances and preferences. This proactive approach not only enhances customer satisfaction but also strengthens loyalty.
Additionally, optimizing onboarding processes with incentives is also crucial. By offering incentives such as discounts or complimentary items during the onboarding phase, subscription merchants can motivate subscribers to commit beyond the introductory period, fostering longer-term engagement.
In essence, with the evolution of subscription commerce, subscription merchants must adapt their business models to stay competitive. BNPL stands out as an innovative solution catering to evolving consumer preferences, one with which subscription merchants can reshape subscriber connections, foster loyalty, and pave the path for a more committed and engaged subscriber base.
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