What is Retail Finance & How Does it Work for Businesses?
Monday April 6th, 2020
Retail finance is a better way to shop and a smarter way to pay. For customers, it offers flexibility, affordability and more options when they get to the checkout. Whether online or in-store, the power of retail financing is undeniable. It can help pay for life’s essentials and give people a better way to manage their money. For the consumer, it keeps life moving.
But what is retail finance exactly? And how does it affect businesses? Offering alternative payments is just as beneficial for retailers. Here’s everything you need to know about offering financing to customers, what retail finance is, and why you should be doing it.
What is retail finance?
Financing options can benefit businesses in every industry and sector, but are most popular in the world of retail, due to growing customer demand and the need for a better customer experience (CX).
The definition of retail finance is ‘offering credit facilities or stage payments to suitable, creditworthy customers’.
This allows shoppers to spread the cost of a product, making it easier to afford. If someone doesn’t want to wait until payday, they can access these services and pay the balance at a later stage. Not only does this remove the usual cost barriers for your customers, but it also helps them manage their finances more effectively.
Compared to using a credit card, retail finance is usually much more affordable, with interest-free deals and easy, flexible payment terms.
Types of retail finance
Here are some of the different types of finance you can offer:
Customers spread the cost of their purchase without any interest payments.
Buy now, pay later
Customers can choose to pay the balance of their purchase at a later date, giving them more time to sort out their finances.
Finance with interest
Customers pay for their purchase over a number of months, with interest added on top.
Benefits of offering retail finance
Offering financing to customers not only helps them buy when they want to, but it can keep traffic and footfall moving on your website and in-store. Flexible payment options can increase conversions and boost sales, eradicate basket abandonment, and give your brand a competitive edge.
Being able to spread the cost of purchases can improve the customer experience and expedite their journey, and can be your point of difference when it comes to the competition. Understanding your customers’ needs and making the process seamless isn’t just about getting a spike in sales either; it will nurture relationships and build loyalty and retention for continued growth.
How it works for businesses
The good news is that setting up retail finance is easy, and it won’t impact your cash flow. With Duologi, we can have you set up on the same day and can make the whole process easy for you and your customers.
Loans are agreed between the customer and loan provider, and you will get an instant cash injection. Repayments are managed by the loan provider, meaning retailers are spared from the extra admin work of money collection.
There’s no risk for businesses. You can benefit from increased sales and better customer satisfaction without having to deal with debt collection. And with easy repayments that can be tracked from their mobile, customers will find the shopping experience seamless from start to finish.
New to finance? Find out more here.