Bridging fashion, price, and sales with buy now pay later

E-commerce financing has transformed how customers approach high-end purchases, particularly in fashion. While some companies thrived during the pandemic, many luxury fashion and skincare brands saw declining sales. One major factor is the gap between price and flexible payment options, which remains challenging for these brands.

Fashion is a fast-paced industry that continually evolves to meet consumer demands. Younger generations, the most eager to stay on trend, often find luxury fashion unattainable due to the high prices. Additionally, they refrain from accumulating debt through traditional credit and in-store cards.

How price flexibility helps customer acquisition

Offering financial flexibility through buy now, pay later (BNPL) solutions bridges the gap between price and accessibility. With rising job losses and student debt, younger consumers—who frequently update their wardrobes—seek flexible solutions to manage their spending. Brands like Nike and Urban Outfitters have embraced BNPL white-label solutions, allowing customers to purchase without upfront costs.

This shift helps fashion retailers expand their customer base, increasing brand loyalty without lowering prices. Instead, brands can provide payment flexibility through POS financing platforms to attract more customers.

How price impacts cart abandonment in fashion

Cart abandonment is a significant issue in online fashion, and price is often why customers abandon their carts. Introducing embedded lending networks and in-store financing options has provided an effective solution. By spreading the cost over several months through POS lending, customers are more likely to follow through with purchases.

The global online fashion industry is expected to generate $7 billion in online sales by 2022. To stay competitive, fashion retailers must reduce cart abandonment rates, which can be achieved by incorporating embedded finance platforms that offer flexible payment solutions.

Increasing sales without lowering price through BNPL

Luxury fashion brands can grow sales without lowering prices by offering BNPL and white-label POS systems. By integrating embedded lending platforms into their e-commerce stores, brands allow customers to finance their purchases over time. This helps customers manage large purchases and ensures that brands maintain their product value.

Statistics have shown that introducing BNPL white-label solutions has led to a significant reduction in cart abandonment and an increase in average order value (AOV). Fashion brands that have adopted these omnichannel financing solutions see lower customer acquisition costs and higher customer retention.