Furniture & POS Financing, Plan for the Future While Gaining a Competitive Edge

The “Global Home” goods industry is the manufacturing, distribution, and retail of home furniture. This includes household decorative accessories, soft furnishings (draperies and curtains), appliances, cookware, and gardening equipment. During the economic recession of 2008, the global home industry was negatively impacted because consumers held back on non-essential spending, this put off many home improvement projects due to lower disposable incomes. 

All consumers were impacted by the recession throughout the mid to late 2000s. It changed consumers’ attitudes about spending money, in particular, it affected Millennials and the way they view credit till this very day. The crisis split the generation into two distinct groups. The first group is made up of older Millennials, they dealt with the financial crisis directly along with Gen X and Baby Boomers. They were faced with a tough job market and wage stagnation which made it difficult to save money. The second group is made up of younger Millennials, this group experienced the recovery period. They entered a better job market and have become risk-averse by watching the recession unfold. Both groups were plagued by financial problems which is something Gen X and Baby Boomers did not face at their age. From saving to spending, and financial behaviors in between, attitudes have changed drastically among consumers. Were you aware the net worth of Americans ages 18-35 has decreased by 34% since 1996? According to The Washington Post, Millenials are financially worse off than older generations. In fact, CNBC reported middle-class life is now 30% more expensive than it was 20 years ago, in particular rent and the cost of college. There are signs of economic recovery and consumers have begun to spend comfortably again, however, consumers are taking back control and are demanding more flexibility in their payment options. 

You may be asking yourself, why is this important?
Consumer shopping trends are changing. Many young adults have been reminded of the burden credit card debt entails by their parents (Gen X and Baby Boomer in some cases). It’s necessary for all merchants to acknowledge that Millennials and Generation Zers have favored debit cards, in fact 63% of Millennials and Generation Zers do not own a single credit card and they will be making up more than half of the consumer landscape starting in the mid-2020s.  Think about how the declining use in credit cards could affect your sales. Offering point of sale financing to your consumers can help remove friction for buyers who struggle to qualify for personalized loans or who do not have the desire to apply for credit cards. Short-term installment loans have been on the rise within the past 3-5 years. American Banker reported 87% of surveyed respondents expressed interest in paying for large purchases via monthly installments.

Consumer financing, also known as point of sale financing, is a different purchasing method to the same end result for all shoppers. Point of sale financing is a line of credit that is not associated with a consumer’s credit card. At checkout, customers would have an additional payment option alongside traditional payment methods, like Visa, Mastercard, Paypal etc. Once the customer selects to checkout with financing, the consumer would fill out a short four field financing application directly on the merchant’s website with no redirects to a sub-domain. Then, the financing application goes through a “waterfall” of lenders to provide customers with the best-personalized financing offers for them. Customers may have the option to finance their products over a period of 6, 12, 18 and even 48 months with equal payments all while receiving 0% APR when the terms are met. The point of sale financing platform ChargeAfter provides, offers merchants with 85% approval rates for their consumers due to a network of global lenders.

Point of sale financing is appealing for more reasons than avoiding a big charge upfront, it allows consumers time to budget and plan for future payments all while receiving their products immediately. POS financing allows consumers to purchase their everyday needs or high-value items. Merchants who utilize point of sale financing from ChargeAfter enjoyed seeing a 45% increase in their average order value. Think about the positive impact offering your customers point of sale financing at checkout could have on your business. All parties benefit when point of sale financing is brought into play.