Chico’s FAS On Offering BNPL And Why Payment Options Are Not One-Size-Fits-All

Retailers need to keep up to date on how consumers’ payment preferences are changing to remain appealing and drive revenues. Consumers may be juggling a variety of financing and payments decisions when they debate whether to go through with purchasing coveted items, after all, and they tend to debate whether they truly need to nab certain items while the products are still available or if they would rather risk waiting until after payday or for a sale. Being able to select compelling credit or deferred payment options with straightforward fee structures when checking out with merchants could help more consumers feel secure in making the decision to buy.

The pandemic has accelerated consumers’ shifts toward digital shopping, making desirable online payment methods key to meeting their needs, Stacey Blicker, vice president of digital for fashion retailer Chico’s FAS, said in a recent PYMNTS interview.

Serving the modern consumer means offering a wide array of transaction choices so that they can select the ones best suited to their particular circumstances and priorities. Blicker said that adding flexible installment payment plans to online checkout has been valuable for the fashion retailer as it aims to please shoppers who are eager to get items but who may not be able to easily pay for them all in one go.

“Giving consumers multiple options at checkout — including buy now, pay later — allows them to continue to shop however and whenever they want, thus removing budgetary constraints,” Blicker said.

Need-To-Have-It Moments

Many households have become more cautious about when and how they take on debt, especially during the pandemic. Solutions that allow them to defer portions of payments while still enabling them to receive the items right away are desirable during the economic downturn, when consumers may be less financially secure. These consumers may be concerned that the items will go out of stock if they wait to buy, or they may have immediate needs for the purchases, Blicker said.

Installment payment options like BNPL can help such shoppers quickly acquire items that they do not want to finance with credit cards but that they may not be ready to pay for out of pocket.

“The buy now, pay later payment option … gives customers their products immediately. They do not have to wait until it’s paid in full,” Blicker said.

Chico’s currently offers BNPL only at online checkouts, where many consumers are primarily shopping during the pandemic. The retailer has not yet moved to enable this purchasing option at point-of-sale (POS) terminals in its physical retail locations because most visitors to its brick-and-mortar stores come in for style consultations before ultimately completing their transactions online, Blicker said. She said that the company could easily launch in-person BNPL options should the demand become more apparent.

Deferring Payments

BNPL offerings may particularly appeal to shoppers who need financing but whose interest in credit cards has cooled. Some consumers are particularly wary of taking on credit card debt because they know they will be charged interest if they fail to pay their card bills on time, Blicker said. These shoppers may prefer to use BNPL options that instead charge them flat fees for late payments.

Merchants that offer BNPL plans may also better appeal to consumers who do not want to go through all the steps that are typically involved in applying for credit cards, which can include providing personally identifying details. Individuals who do not have the credit scores to qualify for card options also may find BNPL to be particularly helpful.

“It was important that our customers did not have a hard credit check or need to provide a Social Security number to obtain credit,” she said. “Offering a buy now, pay later option showcases our commitment to speed and innovation. There are no credit checks, no interest and instant approval for all customers.”

Merchants are working hard to keep up as shopping trends and consumers’ needs change. Staying current has meant enhancing eCommerce presences and offering a variety of checkout offerings. Consumers’ payment preferences are not one-size-fits-all, and retailers may find that they need to present a wider array of payment options if they wish to attract the most customers possible. Keeping shoppers satisfied now more than ever means providing checkout offerings that align with consumers’ priorities. Those who want to be able to buy items right when they need them — while still avoiding the risk of being charged credit card-like interest — may be eager to use fee-based BNPL options to help them more comfortably finance purchases.