Providing redundancy for Point of Sale Financing during the Coronavirus crisis
That’s it. It’s here. The skies are now closed for flights from/to Europe. The NBA has “postponed” or “suspended” the season because a few players have tested positive for coronavirus, Tom Hanks and his wife, Rita Wilson both tested positive and have already been released from the hospital and yes, we are officially out of toilet paper.
What’s next? Well nobody really knows. What we do know is that the economy must continue to march forward, people must continue to spend and we all have bills to pay.
Welcome to Coronavirus or better known as COVID-19. The going-away gift of 2019 to the next century that just keeps on giving.
The question that is begged to be asked and answered is – what will the effects be on physical retail and eCommerce.
Let’s begin with the obvious. People are staying at home. The White House has asked that people avoid congregating in groups of 10 or more. People are avoiding going to the mall, shopping, going to the movies, going out to eat and in general, are much more conscious about their surroundings. More than ever, there are now many more options available to us all to live comfortably from our homes without having to take a “calculated risk” by stepping out of the door to pick up a new TV or to shop for that new recliner that you always wanted.
We have speedy food delivery by door-dash, a variety of streaming services such as Netflix, Disney+, Youtube etc. to keep us and our children entertained for the next decade if we had to. We have home delivery of every essential that we need from shaving supplies to drone delivered amazon orders or better yet – actual flying pizza pies! But, is coronavirus the final blow to physical retail and malls as we know it? Is this virus which recently took on the new name of an “epidemic” by the WHO what will forever change the way we actually and consume? The answer is no. But, retailers (physical) must begin to adapt their businesses to the ever fluid-changing times that we now face. Retailers must begin to adapt eCommerce offerings, offer more payment options such as contactless payments and Point of Sale Financing options for both in-store and online and options such as buy online pick up in-store which will allow retailers to maintain a stream of foot traffic in the door (FTOD).
How can you help your business and consumers now?
If you have an eCommerce site or a click and mortar business, one of the immediate actions you can take to help ensure and encourage business continuity during these times is to offer Point of Sale Financing to your consumers. This will help consumers have additional methods of payment other than their credit cards and will enable your business to continue to transact at higher cart values and see higher conversion rates.
Not all POS financing offerings and services are the same. There are two types of offerings. Single lenders & Multi lenders
Single lenders are individual banks or brokers who provide a single form of financing from a single source. Typically this financing is offered in large to consumers with super-prime and prime credit. In large, single lenders tend to decline anywhere between 60-70% of all point of sale financing applications. Obviously, during normal economic times, those declines numbers are high and can be somewhat damaging to a business and their abandonment rates. But in an unstable economic environment, declining most of the applications when consumers and you, the business, need them most, can be altering to your continuity and stability.
ChargeAfter offers a “Multi-lender” platform for consumer financing which delivers personalized financing options to consumers at checkout from over 10 different lenders who specialize in Point of Sale Financing to consumers across every credit tier. In a fragile economic environment like we are in now, it’s important to offer a stable and robust financing service that takes each consumer, their individual economic needs and credit into account in order to provide every consumer an equal opportunity at purchasing their products through the easy buy now, pay later options.
ChargeAfter’s Point of Sale Financing platform also ensures that we can service merchants with redundancy and higher than average approval rates by offering financing from multiple lenders across each credit tier that compete for the consumer’s business. Merchants using the ChargeAfter platform have the option to offer various financing offers such as 0% APR deferred interest for periods of 6-48 months, open lines of credit and installments offers. By doing so, ChargeAfter on average approves between 80-85% of all applications for consumer financing on the merchants’ site in less than 2 seconds.
ChargeAfter can help ensure you have that extra layer of security and stability for your business continuity, and shopper financing when you need it most. Knowing that in the event that consumers become less eligible for certain financing offers, your business can be backed up with multiple additional lenders from prime, near-prime and sub-prime in a single platform and ensure undisturbed continuous business operations during these times with up to 85% approval rates.
What else can you do?
Communicate! Your consumers want to hear from you. Remember, they have trusted you in the past with their payment details and with orders. Make sure to reach out to them, tell them that your business is functioning. Offer them discounts that can be used now or whenever they need them most. Offer additional shipping options to ensure speedy delivery. Let your consumers know what your company is doing to keep the community virus free. Don’t be embarrassed to take a picture of yourself with gloves and a mask fulfilling an order. This will help your consumers feel more at ease and know that they can trust you now when they (and you) need it most! This will further bond your loyalty and will help boost your sales.
Merchandise your business. If you’re a furniture retailer. You know that half of the world is working from home. Many of us are working from our dining room table with the kids just a few feet away doing their thing. More comfortable chairs, desks, shelving, lighting, etc. is what we all need and want. If you’re a retailer of consumer electronics, think about all of the items that a remote worker may need and what they may be missing from their office, such as an extra monitor or two, wireless keyboard and mouse, a comfortable gel-pad, a reliable headset for their video calls and the list goes on. Create a new “Remote work” or “Work from home” category on your site and make sure to communicate it to your customer base. Tell your consumers – “Hey – we are here, we are ready to help you when you need it most!”
COVID-19 may be an additional push to get those retailers that are not yet online quickly looking to start their eCommerce operations. This virus may also be a real final push to turn us into a cashless society and to take advantage of all the wonderful payment technologies and options that are now available. It may be the final push to get eCommerce to account for more than just 16% of total retail sales. In fact, in 2019, consumers spent $601.75 billion online in the U.S. which was a 14% jump compared to 2018, but the gap between in-store retail and online is still great.
The truth of the matter is – the economic field will change. The markets are reacting and they will continue to react to every piece of news and to each new victim. The reaction of the market may actually turn into a downturn and nobody knows the extent of it yet and what that actually means for our pockets. We have all seen the news that some of the leading companies have and are editing their earning forecasts for 2020 and with that news, the markets tend to have a negative reaction.
How will this affect us? Nobody really knows but the travel vertical is entering somewhat of a spiral and businesses of all sizes along with their owners and employees will feel the brunt of it. Cash may become tight, consumers may become wearier about their spending and rightfully so, many will start to think twice about their next purchase as history has dictated. Consumers will pay more attention to their bank balance and may be less likely to use their credit cards as freely, as they may need them as an emergency backup. Unfortunately, some people will find themselves having to lean on their credit cards for their important purchases, falling short on scheduled payments and even some may become unemployed.
But as history continues to prove, we are resilient and we always come back. Also, in times like these, people become extra creative and this is when businesses and verticals transform. In fact, the famous jd.com, one of the leading eCommerce giants out of China actually is a SARS epidemic success and a true example of a “phoenix.” Richard Liu leased a 4×4 meter retail unit in Beijing back in 1998. When the SARS outbreak affected the country, Richard saw an opportunity amid the difficulty to harness the potential of the internet (at that time) to support his business and began selling his products online. The Phoenix in this story is that in 2019, Jd.com’s annual revenue was reported at $82+ Billion! There’s a similar story for Alibaba’s Jack Ma who too was able to reinvent during SARS. In fact, Alibaba had over 500 employees quarantine for 12 days and some people in the Hangzhou community suspected Alibaba of spreading SARS in the city, giving the company a bad name. Starting in March 2003, Alibaba’s B2B eCommerce business added 4,000 new members and 9,000 listings each day, a 3-5x increase over the pre-SARS rate. The rest is history.
An immediate response (Phoenix) to corona and to the power of eCommerce comes from none other than the eCommerce giant, Amazon who just announced the hiring of 100,000 new distribution workers to keep up with the online shopping surge caused by coronavirus.
At ChargeAfter we strongly believe in the story of the Phoenix and the power of retail managers, owners, and the US consumer. As a business, this is your time to write your own success story and the next chapter of your business. At ChargeAfter, we will always have a lender for you that will be there for you to help you grow your business.