Furniture & POS financing: Gaining a competitive edge

The furniture and home goods industry, encompassing the manufacturing, distribution, and retail of home furnishings, is undergoing significant changes. This includes household decor, soft furnishings like draperies and curtains, appliances, cookware, and gardening equipment. The 2008 recession dramatically impacted the global home industry as consumers cut back on non-essential spending. As disposable incomes dropped, home improvement projects were put on hold.

While the economy has since recovered, consumer spending habits have shifted, particularly among Millennials. The 2008 financial crisis divided this generation into two distinct groups. Older Millennials, Gen X, and Baby Boomers faced challenging job markets and stagnant wages, making saving difficult. On the other hand, younger Millennials, who entered the workforce post-recession, have become more risk-averse, having witnessed the financial difficulties firsthand. This change in economic behavior is evident in their attitudes toward credit and consumer financing.

According to The Washington Post, Americans aged 18-35 have decreased their net worth by 34% since 1996. Middle-class life is 30% more expensive than it was two decades ago, with rising rent and college education costs. However, as the economy stabilizes, consumers regain confidence and demand more flexible payment options, particularly when purchasing big-ticket items like furniture.

Changing consumer behavior: The rise of POS financing

InfluencedToday by the recession and their parents’ experiences with credit card debt, today’s young adults are increasingly favoring debit cards. 63% of Millennials and Generation Z do not own a single credit card, even though they will make up more than half of the consumer market in the coming years. As merchants, it’s crucial to consider how the declining use of credit cards might affect your sales.

This is where point-of-sale (POS) financing comes in. By offering flexible payment options like POS lending and BNPL white-label solutions, you can cater to younger consumers who either can’t or don’t want to apply for traditional credit cards. According to American Banker, short-term installment loans have gained popularity in recent years, with 87% of consumers expressing interest in paying for large purchases via monthly installments.

What is POS financing and how does it work?

POS financing, also known as embedded financing, offers consumers an alternative payment method without relying on credit cards. Customers can choose in-store or e-commerce financing at checkout alongside traditional methods like Visa and PayPal. Once selected, the consumer completes a simple financing application directly on the merchant’s website.

The process is powered by an embedded finance platform integrated with a white-label POS system. This ensures a seamless user experience with no redirects. The financing application goes through an embedded lending network, where lenders compete to offer the best financing terms. Customers can pay over 6, 12, 18, or even 48 months, often with 0% APR when specific terms are met. Thanks to their extensive embedded lending platform, solutions like ChargeAfter report 85% approval rates.

How POS financing benefits furniture retailers

As consumer spending habits evolve, furniture retailers must adapt to new payment trends to remain competitive. POS financing platforms like ChargeAfter provide retailers with tools to offer omnichannel financing, helping to boost sales both online and in-store. By integrating in-store financing options, furniture merchants can provide customers more flexibility at checkout, encouraging higher purchase amounts without the upfront financial burden.

According to recent studies, furniture retailers who utilize POS lending have seen their average order value increase by 45%. This rise in order value is primarily driven by the ability to break down large purchases into smaller, manageable payments. For furniture, which is often a high-ticket item, offering BNPL white label or white label BNPL solutions can significantly improve customer satisfaction and increase conversion rates.

By providing embedded finance solutions, furniture retailers cater to the growing preference for installment payments and enhance their brand’s overall shopping experience. Whether an e-commerce platform or a physical store, offering white-label POS systems ensures seamless transactions, keeping customers engaged throughout the purchasing journey.

The importance of embedded lending in furniture sales

Implementing embedded lending solutions is becoming increasingly essential for furniture retailers. Consumers are now looking for more than just product quality—they want flexibility and convenience when it comes to financing. With an embedded lending platform, merchants can offer tailored financing solutions based on individual customer needs, increasing approval rates and helping convert hesitant buyers into loyal customers.

The embedded finance platform works in real time to connect consumers with various financing options, allowing them to choose the most suitable terms without leaving the retailer’s site. This integration eliminates friction in the purchasing process, ensuring a seamless and stress-free experience for the merchant and the buyer.

Retailers who incorporate embedded lending solutions see a higher rate of completed sales, as customers appreciate the ease of financing and the range of options available. Omnichannel lending options, in-store or online, give consumers more control over their financial decisions, increasing customer loyalty and long-term growth.

Increase sales with in-store and e-commerce financing

In the furniture industry, where purchases represent significant financial commitments, flexible payment options like in-store financing and e-commerce financing can be a crucial differentiator. Many customers may hesitate to make large purchases due to financial constraints, but offering POS financing allows them to break up the payment into manageable installments. This not only makes the purchase more accessible but also encourages consumers to buy higher-value items.

For retailers, adopting embedded financing solutions helps to increase overall sales volume. By integrating these options into physical and digital stores, merchants can provide a consistent shopping experience across channels. According to recent data, businesses that offer POS financing platforms see a significant reduction in cart abandonment rates, especially for higher-priced products like furniture.

This omnichannel approach to financing expands the reach of a furniture store and enhances the customer journey, ensuring that whether a customer is shopping online or in-store, they have access to flexible payment options. As more retailers adopt embedded finance platforms, those who fail to do so risk losing out on a growing market of budget-conscious, tech-savvy consumers.

The power of embedded lending networks for furniture retailers

For furniture retailers looking to optimize their sales process, leveraging an embedded lending network can be transformative. This network connects retailers with multiple lenders, allowing them to offer personalized financing options to customers with various credit profiles. Merchants can significantly increase approval rates by providing tailored financing solutions, ensuring more customers can complete their purchases.

Using an embedded lending platform means financing options are seamlessly integrated into the checkout process without redirects or third-party interactions. Customers appreciate this convenience and are more likely to complete their purchase when they can select from several financing options that match their needs.

Retailers benefit from embedded lending because it removes traditional barriers to financing, such as lengthy approval processes and high rejection rates. This approach is efficient in the furniture market, where big-ticket items often require financing. Merchants that utilize an embedded finance platform position themselves as flexible, customer-friendly brands, which can ultimately lead to increased customer loyalty and higher lifetime value.

Omnichannel financing: Future-proofing furniture sales

As consumer preferences evolve, omnichannel financing will play an increasingly important role in future-proofing the furniture industry. Retailers who offer POS financing across multiple platforms—in-store, online, or through mobile channels—will have a distinct advantage in capturing a larger market share.

Today’s consumers expect flexibility not only in how they pay but also in where they shop. An embedded finance platform that supports omnichannel lending ensures that customers can access the same financing options no matter where they make their purchase. This seamless integration across channels helps build customer trust and increases the likelihood of higher purchase volumes.

Furniture retailers that adopt this approach are setting themselves up for success in a rapidly changing retail environment. By offering embedded finance solutions catering to the modern consumer’s desire for flexibility, merchants can attract new customers, improve conversion rates, and drive growth for years.