How to offer finance options to customers at Christmas

Traditionally a bumper time for both shoppers and businesses, Christmas and the sale season provide a unique opportunity for retailers to catch-up on goals, shift excess stock and finish the year on a high. 

If you’re looking to maximise profits and sales this Christmas, then we suggest looking at offering financing options to your customers. Here we’ll look at consumer spending behaviour at Christmas, how to offer finance options to your customers this year and the benefits a finance option provides.

Consumer spending behaviour at Christmas

A cornerstone of the retail sector’s ‘golden quarter’, the Christmas period is usually characterised by vast sales, huge shopping baskets and indulgent purchases. Last year, Brits planned to spend more than £25 billion at Christmas. This equated to £548 per person.

This year, research shows that many Brits are planning to reduce the amount they’re spending. Currently, 59% of Brits say they will have less cash to spend overall during the festive period. However, even in the midst of a cost of living crisis, only 8% of those surveyed say they plan to skip gift-buying altogether.

As such, Christmas 2022 looks set to be a huge event for both online and in-store retailers. After all, experts still predict that overall spending in the UK will reach the £15-£20 billion mark. 

Plus, in past years when reductions in overall spending have been forecasted, they’ve largely proven unfounded, so there’s still a good chance that overall spending in 2022 will match the levels we saw in 2021.

Although it’s still only November, research shows that more than a quarter of Brits have already started their Christmas shopping and that the majority of Brits plan to finish their Christmas shopping early. In fact, earlier this year, a survey found that 48% of Brits were hoping to have their Christmas shopping finished before the Black Friday sales began.

As a result, these trends show us that the sooner your business gears up for Christmas, the better.  

How finance options affect customer behaviour at checkout

By offering finance options at the checkout, you can positively affect customer behaviour. This is because finance options not only increase customer choice, but they also increase convenience and improve the customer experience.

When you give customers the ability to complete their purchase using finance, you allow them to spread their payments. This means that customers are more likely to complete their purchases and you can reduce cart abandonment rates.

Other benefits of offering finance

Finance options provide benefits to customers and businesses alike. Let’s look at the full range of benefits you’ll receive from offering finance in greater detail.

Improved conversion rates

Due to the flexibility finance provides, customers are more likely to complete their purchases at the checkout stage. This is because finance provides an alternative payment option if they’ve spent more than they budgeted for, or if they’d prefer to split the cost so they can manage their finances. 

Increased average order value

Similarly, finance can also increase your average order value. This is because spreading the cost of the order allows the customer to spend more in one transaction, rather than returning week-by-week or month-by-month and placing small orders. 

Plus, as financing allows the customer to split the total cost of their purchase over a number of months or years (depending on how much they spend), high-value items become more affordable for customers. This is because they don’t need to have the entirety of the total order value available in their bank account at the time of purchase, and they don’t need to load debt onto a credit card.

Improved cash flow

On top of this, finance options can also improve your cash flow. These improved conversion rates and increased average order value all ultimately mean that your business will receive more money. 

Plus, when a customer uses finance, you’re paid in full upfront and your company is always protected from credit issues and fraud. This means there are no risks to your business and you can maximise business growth.

Expanded customer base

Financing options can also help you expand your customer base. By increasing the number of payment options you provide, you can also increase the number of people who purchase goods from you or use your services. This is particularly the case if your rivals don’t offer finance options, as finance then offers you a big competitive advantage. 

Customer retention

Finally, by providing finance options, you can also improve your customer retention rates. This is because, by offering finance, you’re improving the customer experience and providing the ultimate flexibility. This means that customers will have an enjoyable experience shopping with you and will be more likely to return in future.

Overall, our research shows that a third of people are more likely to spend with a retailer who offers finance and 78% of people are more likely to return to a retailer who offers finance.

Why Christmas is a great time to provide finance options

Christmas is the perfect time to offer finance options. As the cost of living crisis intensifies, more and more customers will be looking to spread the cost of their payments this Christmas and alleviate financial pressure.

With Brits spending around £500 each on Christmas, many will look for ways to spread this cost so the sum doesn’t come out of one pay packet. Offering interest-free finance is a great way of helping customers do this, as it allows the customer to spread their payments over a number of months for no extra cost. This ultimately helps them budget and keep their finances under control. 

Added to this, offering finance at Christmas makes sense as it can help people purchase sale items that would otherwise be unaffordable. It can help people buy gifts in the Black Friday sale before they’re paid, and it can also provide some much-needed financial assistance during the Boxing Day sales, while people are still waiting for their December payslips.

How to offer finance options to customers

Now we’ve discussed the benefits of finance, we need to look at the logistics involved and how finance works. So, here’s more on how to offer finance to your customers and the practical steps it involves.

Pick a finance partner and discuss your options

Before you decide on a finance option for your business, you need to speak to the experts. A dedicated finance partner like Duologi can help make the process of offering a finance option simple. We are the fastest-growing point of sale payments solution provider in the UK market and our team contains money specialists, technologists, digital marketing experts and data analysts from a wide variety of backgrounds.

We work with businesses across the retail sector, from early stage digital start-ups to large multi-channel brands. Whatever financing solution your business needs, we can help.

Select the finance option that’s right for you

At Duologi, we understand that no two retail businesses are the same. For this reason, we’ve created a wide range of services and products for you to choose from.

Whether you need an instant solution for your website or point of sale financing in-store, you need to assess your options closely. With us, you can choose from:

• O% finance – where customers pay monthly and don’t pay interest
• Interest-bearing finance – this is more of a traditional loan where a customer pays a small amount of interest that covers your subsidy costs

Our payment terms range from 3-60 months for purchases between £150 and £15,000.

Get started with your new system

Once you’ve selected your finance option, getting started is simple. Thanks to simple integrations and plugins, we can make sure that your new system is up and running in only a few hours. 

Book a consultation to find out more

Interested in discovering more about how our innovative finance solutions can help your business? Get in touch with our expert team today. We’d love to explain how to offer finance options to your customers and the options you have available. So, give us a call or drop us a line. Whatever you need, we’re on your side.