Synchrony, the premier consumer financial services company, recently released its “Major Purchase Journey Study,” which reveals some interesting little tidbits about the connection between financing and consumer purchasing psychology.
I’m personally familiar with Synchrony since it provides the financing for at least three of the credit cards that I use. No doubt that many of you are using Synchrony, Wells Fargo or other financial institutions to provide credit for your customers.
Here are some highlights from the report:
- In a survey of 3,600 individuals who have made a significant purchase of $500 or more within the past six months, 5% more people obtained financing for large purchases compared with two years ago.
- 77% of major purchase shoppers use retail credit cards to take advantage of unique benefits. (In my mind that’s points, cash back or a special financing offer.)
- 58% did in-store research before making a major purchase.
- 65% said the in-store experience is an essential part of retail shopping.
- 81% directly interacted with the salesperson while shopping for most-recent purchases while 68% make their purchase in-store.
- The percentage of younger shoppers using mobile wallets was double that of every other group surveyed.
- Younger shoppers continue to follow more of a digital journey, with 61% of shoppers aged 18-44 saying they conducted research through mobile channels.
So, what does all this mean to your retail store? For one, to get the most from financing, your salespeople must offer it to each customer as an option when they come into your store. Credit is a way for your customers to trade up to higher-priced goods or even additional renovations in other rooms. Take advantage of the special offers the cards have—it might be deferred payments or special financing options. Market these on social media.
However, be sure to broach the subject of credit early on in the sales process. Offering it at the end, as a way to close the sale, can sometimes backfire. For example, you may discover in the end that the customer might not qualify. If they do qualify, it’s doubtful they will go back and reselect a better product. It just takes too much time to rethink their purchase.
Not only do you need to take credit cards, but it’s important for you to understand the different types of cards out there and how to get the consumer to use them. Take private-label credit cards, for example—these are the cards that feature the retailer’s logo on it. Experts say this not only strengthens the retailer’s brand position, but it also encourages and fosters consumer loyalty when it comes to future potential purchases.
Don’t leave money—or trade-up sales opportunities—on the table by shunning financing. In fact, I would heavily promote the fact that you offer financing in your store(s). You’ll be glad that you did.
Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at lcalandrino@nycap.rr.com.
