How can offering financing increase sales on consumer electronics?

Consumer electronics are a core part of our lives today. They help us get our work done, stay in touch with friends and relatives, entertain us in our free time, and assist us with our domestic chores. They’re necessary in so many areas of modern life, but they can also be very expensive, to the point that paying for new kit or to replace something broken can be difficult to fund up-front.

In this guide, we’ll explore how financing can help you increase sales, and give you all the key information you need if you’re new to the world of retail finance.

What types of consumer electronics can be financed?

Pretty much every type of consumer electronic hardware is suitable to be financed, as long as it’s worth a reasonable amount. It is possible to finance small-ticket purchases, but this is rarely needed.

Items suitable for financing include (and are not necessarily limited to):

• Audio-visual: such as TVs, speakers, sound bars

• Computing: such as smartphones, tablets, PCs and laptops

• Domestic: such as washing machines, tumble dryers and dishwashers

Why offering finance on electronics purchases is a win-win situation

Consumer electronics financing doesn’t have to favour one party over another when a deal is agreed: it really can be a positive for buyers and sellers alike, for a variety of different reasons:

Benefits for your customers

For starters, it gives customers much-needed flexibility: they can spread the cost of a purchase that they wouldn’t otherwise be able to afford to pay for in full up-front, and avoid the high interest rates that come with loans or credit cards. This in turn allows them easier access to the latest technology, which could prove particularly important for the increased numbers of people working from home. 

In some cases, financing gives consumers the chance to ‘try before they buy’ and return any goods they aren’t satisfied with before handing over any money.

Benefits for your business

Sellers can gain from increased sales as the potential customer base is widened: they are no longer restricted to only those who can afford to pay up front. There’s also a chance to encourage purchasing from customers that are more impulsive, as any mental barriers to the purchase are removed if they can see that there’s a good financing option immediately available to them.

There’s also the indirect benefit of being seen to be more flexible with payment options. Many customers will appreciate a business that is willing to adjust to their needs, and this can inspire greater customer loyalty. At a time when it’s been easier than ever for customers to shop around, and harder than ever for retailers to retain customers long-term, the value of this loyalty can’t be underestimated.

What to consider before offering finance options to customers

There are lots of things to take into account when establishing how customers can finance electronics purchases. You’ll need to consider how customers will find out about the finance options available, how the offers will be structured, and ensure you’re complying with financial regulations. In particular, make sure you cover these two

areas:

Online integration

It should be just as easy for your customers to access financing online as it is for them to do so when purchasing in person at a store. Clearly displayed and easy-to-understand information that’s embedded into the customer journey is vital for easing the consumer experience.

Point-of-sale advertising

Being able to advertise flexible payment options is a great way to entice people into your store, and an easy process at the point of sale is just as important for completing the sale. Banners, posters, signage, leaflets and stickers for the till area are just some of the resources that can help maximise the use of financing.

How to offer finance as a retailer

Once you feel like you’re ready to go with consumer electronics financing, and you’re happy with your customer-facing strategy, then it’s time to consider how things will work behind the scenes. This means working out how to proceed from a financial and provider point of view:

Select financing options

One important decision to make is to decide the type of finance you want to offer. These could be 0% interest deals, interest-bearing finance which effectively acts as a loan, or multi-tier options where credit terms can be varied to suit the credit score of the customer.

Whichever case you choose, there will also be fees to pay to the financing provider you work with. These are called subsidies, and you will have a decision to make on whether or not to pass the cost onto the customer or not. If you do, then your profitability will be greater, but the finance options you offer will be less attractive. If you cover it yourself, then you’ll be able to offer genuine 0% deals to customers that will stand out in the marketplace.

Choose a provider

There are lots of providers in the marketplace that can help you with consumer electronic finance, and it can be hard to know which one is right for you. The best thing to look out for is flexibility: every business and customer is different, so a provider that can adapt and tailor its finance options to suit your characteristics is ideal.

Why use Duologi?

Duologi works with retail businesses just like yours to make financing as simple as possible, for you and your customers. We can get your finance options set up in a matter of days, adjust them to perfectly complement your consumer electronics offering, and give you extra support to maximise your marketing investment. Talk to us today to find out more on what we do and how we do it.