Bridal Boutiques: Surviving The Covid-19 Pandemic With Buy Now Pay Later Consumer Financing
The Covid-19 pandemic has impacted most industries that exist today, with the wedding space being hit the hardest, an industry that was valued at $74 billion in the US alone. According to surveys, 4% of the 450,000 weddings planned for March 2020 were canceled. While that seems like a small number, it has had a severe impact on wedding vendors. With large gatherings banned and strict protocols in place, many wedding vendors have to adapt to the changing times to avoid shutting their doors for good.
The good news is that there is a light at the end of the tunnel for the wedding industry. Many brides and grooms are still planning their weddings albeit further into the future or cut down to micro ceremonies. The demand is clearly still present for the industry of love, but it may just look a little different.
The key is to meet the demands of the consumer and here is how offering Buy Now Pay Later (BNPL) financing from ChargeAfter can help:
A Future Without Crippling Debt
Planning a wedding does not come cheap and with the ‘new expectations’ created by popular social platforms like Instagram and Pinterest, some brides and grooms go to extreme lengths to plan their perfect day to ensure it is just as picture-perfect as portrayed in the many lavish and filtered images circulating these social platforms. Feeling this pressure, engaged couples often turn to interest heavy lines of credits and loans to afford these price tags, which can take years to pay back. A new marriage formed on debt can be extremely stressful for both parties. The hefty interest rates bump up the total cost of the loan meaning that some couples land up paying far more for their wedding than the actual cost!
While the pandemic has forced couples to reevaluate their priorities for the big day, there are still many that need to turn to credit to afford even just the necessities.
Making the sale is also proving harder for most bridal vendors, with many brides opting to purchase simpler, non-traditional dresses for their big day to cut costs. This is where offering Buy Now Pay Later consumer financing becomes an indispensable tool for your business and customers. Instead of shoppers having to choose between the dress and their budget you are able to give them another payment option that is flexible and suited to their unique financial needs.
How Does BNPL Work?
Unlike traditional credit, Buy Now, Pay Later consumer financing is exactly how it sounds, it is a transparent and affordable payment plan that does not require much effort or an in-depth analysis of credit history, and the total amount can be paid back over 6 to 12 months. It is presented on checkout and only takes a few minutes to complete. There are also various terms and payback plans available for the customer to choose from without having to increase their credit limit usage or affect their credit score! To add to the customer’s benefit, some merchants may even offer a 0% APR if paid back in full within 6 to12 months, which will directly contribute to more savings.
How Does Offering BNPL Benefit Your Bridal Store?
The model of Point Of Sale financing is not just beneficial to your customers but also beneficial to your store. Here are a few benefits you can enjoy from Buy Now Pay Later as a merchant:
Due to Covid-19, many businesses have had to create a digital presence in order to adapt and meet the demand. With ChargeAfter’s technology, you are able to offer POS financing online, in your store, or even through your call centers. The ChargeAfter platform can be integrated into your existing systems, making it easy to offer this convenient solution to every customer across the globe. ChargeAfter’s digital solutions include:
- Integrated Buy Now Pay Later services for Magento and Magento 2 platforms
- Integrated Buy Now Pay Later services for Shopify platforms
- Integrated Buy Now Pay Later services for Woocommerce platforms
- Integrated Buy Now Pay Later services for Shopify platforms
- Integrated Buy Now Pay Later services for Big Commerce platforms
- Integrated Buy Now Pay Later services for Hybris platforms
And many more.
One of the many things that make this form of consumer financing outshine other methods of credit is that the approvals for this type of financing are much higher. This means that a customer has more chance of getting financing from a lender than if they had to apply for a credit card. But not all BNPL solutions are created equal either. ChargeAfter’s technology uses a network of different lenders who offer various payback rates and terms. Thanks to this waterfall financing method, customer approval rates for BNPL services are 85% and over! Other POS financing providers who work with single lenders have approval rates of between 60 to 65%. This means that by using ChargeAfter’s technology, you are able to get up to 20% more BNPL sales. The higher the approval rates, the more sales you close.
You Get The Money Upfront
Ultimately, when you close any sale, you want to ensure you get the money upfront without having to manage the admin that comes with other financing options like in-store accounts and layaways. Having to take on the admin of recouping costs and collecting monthly payments is also a very tedious and labor-intensive exercise. With BNPL financing, you are paid upfront while the lender deals with the rest. This not only alleviates the stress but also gives you more time to focus on adapting and building your business during the pandemic.
As we mentioned before, the pandemic has changed the way consumers purchase. They are prioritizing the necessities and forgoing the things they consider to be luxuries. This means brides are swapping out their dream gowns for something more affordable instead. But with BNPL financing, you are giving them an affordable payment solution that allows shoppers to get their dream dress or suit without breaking the bank. It also opens the door for higher-value sales. For a couple of extra dollars a month, consumers are more willing to take the more expensive option. They have more buying power and more flexibility to get exactly what they want.
It is a win-win for both parties. Your AOVs increase while your customers are able to afford the gowns and suits they have been dreaming about to really make their special day a truly memorable one!