Minimize supply chain pain by offering longer terms
With supply chain blockages creating new challenges daily, you may be facing hard decisions about raising prices and preserving margins. While higher prices could deter customers just as the holiday shopping season arrives, you can soften the impact for many shoppers by offering pay-over-time plans—especially with longer terms.
The sticker shock of an $1800 sofa, for example, can put less stress on a shopper’s budget when the total cost can be divided and paid over 18 months.
Offering longer terms (beyond 12 months) is a good way to help shoppers retain more spending power despite rising prices in the current economic environment. The resulting lower monthly payments can reframe the total purchase price in a more budget-friendly way. For example, the payments for a high-tech piece of fitness equipment could become similar to a monthly gym membership.
You can unlock maximum benefits from longer terms by making sure shoppers know they have a pay-over-time option before checkout. Onsite banners, messages on product display pages, and social media placements are just some of the ways you can direct attention to the option of longer terms early in shoppers’ decision process.
Displaying as low as monthly payment calculations alongside an item’s price is one method. This can reduce friction at checkout when shoppers see they don’t have to pay the total cost immediately. After seeing a comparison display—like these from Casper and Room & Board—customers may also opt to upgrade or add another item they might not have bought otherwise.
The displays can increase average order value (AOV) for your business, as shoppers discover they may be able to afford more if they spread the payments over time. In fact, furniture/homeware businesses that partner with Affirm to offer pay-over-time options saw an average 89.5% lift in AOV during September.
The predictions of supply chain pain will likely limit the discounting options of many retailers in the coming months. But there is a way to reduce the impact that higher prices may have for your customers and your business: offering payment plans with longer monthly terms from Affirm. It may be just the thing to brighten your holiday season.
Learn more about how Affirm can help increase sales for your business.