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portrait of a project manager presenting the companys activity while his colleague is SBI 325537141

Checkout finance offers a way to maximise sales across the peak period

By: Mike Dawson, CEO of Deko

The festive shopping season is almost upon us and, more than ever, this year it will be critical for retailers. Making up revenues lost during the lockdowns and boosting their sales are clear priorities, but supply chain constraints and labour shortages threaten to reduce stock levels, pushing up prices and squeezing retailers’ margins.

To address these issues, boost performance and optimise sales this peak season and beyond, retailers are increasingly taking advantage of the significant advances in payment options, which enable them to maximise their power at checkout.

The importance of the peak period for retailers is hard to overstate. Due to the rise in annual seasonal sales, consumer activity begins to intensify in November. In 2019, transaction values for the Black Friday event increased by 16.5% on the year before, with volumes up 7.2%.[1] Whilst sales saw a fall in November 2020, this was largely due to lockdown and the necessary closure of brick-and-mortar stores, and it is likely that retailers will see an uptick this year.

It is important that merchants are equipped with payment processes that will take full advantage of this extended peak period, building on the usual growth in expenditures in December when Britons spend on average 29% more than in a typical month. These figures would very likely have been even higher if fewer items were left in online shopping bags. Over 2020, for example, a staggering £39.4 billion of shopping was abandoned in online baskets.[2]

Advances in payment options offer a solution

Ensuring a fast and efficient checkout experience and facilitating purchases at the point of sale are two key factors that will help retailers boost sales and give customers the opportunity to purchase what they need.

Ten years ago, more than half of all payments across the UK were made with cash; by 2020, that had fallen to less than 20%.[3] It reflects the changing trend at the checkout. Debit cards have increasingly been replacing cash, traditionally working well for smaller payments that can be readily paid off at the end of the month without incurring interest charges, and increasingly finance has been made more readily available for bigger basket sizes.

There are now a wide range of financing options at checkout and far more shoppers are accessing them. The pandemic has helped to further accelerate this trend, with a dramatic increase in usage of new payment methods as shoppers increasingly switched to online. Some 54% of Britons now say they have used options such as buy now, pay later.[4]

The shift to alternative payment methods looks set to remain as younger consumers increasingly dominate the market. One consequence of the pandemic is that 82% of millennials now say they are more likely to use a financing payment method to counteract squeezed budgets.[5] They, along with consumers of all ages, value the functionality of instalment financing as it provides transparency and clarity on how to repay. For all merchants, it’s noteworthy that for 37% of millennials[6], acceptance is the main driver for trying out new payment methods.

Matching with the right provider is key

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The variety of retail finance options available today range from buy now pay later (BNPL), to revolving credit to bigger ticket loan facilities. What is key is that retailers adopt a solution that ensures the highest proportion of acceptance for customers, to help optimise sales.

Deko, for example, is a multi-product provider and works with far more finance providers than its peers, meaning that a retailers’ customers have much more of an opportunity to be matched with a “yes” decision at the checkout. By facilitating more approvals and increasing sales, it has been shown to improve checkout returns by 24% on average. Alternative payment methods, which utilise multiple lenders, are particularly effective in boosting sales of baskets of £250 and above.

A platform that can be onboarded quickly is also important to minimise delays and maximise opportunity to boost sales. Deko offers unmatched speed of onboarding – in as little as 24 hours.

Retailers need to adopt the right retail finance solution to ensure they maximise sales this Christmas – and over the longer term. Making the shopping experience as easy and frictionless as possible is key to attracting shoppers. Retailers that can adapt their point-of-sale finance solutions will be the winners in the increasingly competitive race for shoppers’ spending.


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