The payment option winning more customers for Room & Board
Doing the right thing for your customers can do great things for your business. Room & Board saw it happen after partnering with Affirm to offer pay-over-time options to its customers.
“We wanted to offer an alternative payment method while staying very true to our mission to respect and treat customers fairly,” said Ann Vick, VP of Marketing, about Room & Board’s decision 3 years ago to work with Affirm. “We didn’t want anything that might feel like predatory lending with sneaky fees. It really wasn’t about driving more sales. It really was about offering our customers a payment alternative.”
Zero-interest offer becomes a game-changer
Once the pandemic hit in 2020, the premium furniture company went further: offering 0% APR payment plans with Affirm to benefit customers during a difficult time. “Everyone was starting to work from home, and people needed furniture right away,” she said. “The zero-interest plans were a lever we hadn’t used much, but it helped many customers who were facing hard decisions during that time.”
Soon it became clear the strategy was more than a benefit to customers. “It was helping us fill a sales gap during a time we had to keep stores closed.”
After several months, Vick’s team noticed the vast majority of customers who applied for the 0% APR plans were approved. “We felt good about the number of customers being approved and their take-up rate, so we kept that option as an ‘always on’ alternative.”
The decision was made easier by other results, too. “It was helping with our primary goals—to offer a new payment option, to attract a younger audience, and to increase AOV. All those goals have been met by the zero-interest program,” she said.
The results remain impressive. So far this year, Affirm sales for the Minneapolis-based company had a 28% higher average order value (AOV), and 91% of that volume came with 0% APR loans. Overall sales volume with Affirm was up 16% year-over-year as of April 2022.
“Furniture is a high-ticket item, so we already have a high AOV,” Vick said. “But having an even higher AOV with Affirm is fantastic!”
A ‘great match’ makes an irresistible customer experience
The interest-free offers with Affirm also expanded the customer base for Room & Board. The take-up rate for millennials has increased 45% due to the 0% APR offers, and over 35% of Affirm sales in the last 2 years were new customers for Room & Board.
“We’ve been wanting to engage a next-generation customer for years, and seeing these gains with Affirm among younger customers is really important for our long-term health,” Vick said. “I think it shows our message of quality and service is resonating with them, and they see we have a great payment option that’s already familiar to many of them.”
She said the outlook for Room & Board’s growth is solid, especially now that customers are more comfortable shopping online. They also like using the company’s virtual design services, which helps them do things like furnish a second home without setting foot in a showroom. Vick believes the partnership with Affirm will continue to enhance the Room & Board customer experience.
“We’ve got great strategies in place for how we market Affirm, and it just feels like it’s a normal part of our business now,“ she said. “It's not like, ‘Oh, this is another program we have to manage.’ Working with Affirm is very self-sustaining, and it’s been a great match for us.”
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