In today’s cash-strapped society, many consumers are postponing major furniture purchases and, instead, opting to buy secondhand items through online channels like Facebook Marketplace and OfferUp. The higher the price point on a piece of furniture, the greater the chance that consumers will go elsewhere. That’s why the most successful furniture retailers are getting creative and offering private label credit cards or flexible installment plans to stay competitive with an already burgeoning resell market.
Here’s exactly how financing can easily expand your retail furniture sales:
- Grow Revenue. If you can lower the financial barrier to entry for a purchase, consumers are more likely to buy. With the financial burden lifted through a credit card option, consumers are also more likely to spend more on their purchase. Studies have shown that consumers often buy 15% more when they are given the ability to pay for their purchase in installments or use a store credit card. You can create promotional add-ons or discounts that are given when customers enroll in various financing programs. This can be an effective way to both advertise your new payment plans as well as to incentivize customers to spend more to unlock greater long-term savings.
- Build Better Customer Profiles. In the retail industry, big data is the key to understanding who your customers are and how they buy. You can examine the types of purchases people put on your store credit card or enroll for flexible monthly payments. For example, if a large portion of your customers are financing bedroom sets, then you can use this to position your marketing and bedroom set promotions to highlight your credit card or flexible payment programs.
- Extend Customer Lifetime Value. By offering financing options you also fundamentally shape consumer behavior. You give them access to the products they want, that now they can afford, and you nurture them along the buying process with your customer support. That’s why 93% of first-time consumer credit users say they would use a store’s consumer credit again for other purchases. In this way, you have created a longer and more profitable relationship with your customers.
There are a host of other ways that credit financing and payment plans can be used to drive furniture sales. The key is in creating payment options that appeal to your customers, figuring out what products financing likely will be used for, and being clear in your marketing messaging around the distinct benefits of your financing options.