Today's point-of-sale (POS) systems are far more than a cash register on an iPad. They're jam-packed with features that make small businesses operate more smoothly. If you're starting a café, a convenience store, or a gourmet food truck, there's POS finance that'll work for you.
Consumer credit at the point of sale has changed dramatically in recent years. Merchants are constantly looking for ways to make their goods more available to consumers, from standard credit cards and retail branded cards to layaways and on-account sales. A new financing option is known as "buy now, pay later" or "point-of-sale financing" has begun to make waves in the retail sector.
POS financing is a popular choice, particularly among younger generations who are less receptive to credit cards than their parents and grandparents. Closed-end credit products have become a standard payment option for these customers, both online and in-store. POS financing will help merchants gain more buyers, increase order prices, and increase the number of people who complete transactions.
A rise in average order value without a reduction in margins can significantly boost a company's profitability. However, not all businesses have the necessary working capital to provide in-house funding. There is still hope if this describes your business.
Essential features of POS financing
Customer relationship management
Customer relationship management (CRM) is a feature of a point-of-sale system that allows you to keep track of your customers' purchasing habits, build customer profiles, and recognize your most valued customers. You can use this app to develop loyalty and incentive plans, personalize customer communications, and use other marketing strategies to leave a lasting impression on people who purchase your product or service.
It is a computerized system that allows small business owners to collect data in real-time, monitor top-selling products, and quickly replenish stock. You can receive, monitor, and sell products in real-time using barcode recognition technology.
That means you won't have to deal with the hassle of keeping track of revenue and inventory levels on your own.
You can maximize your face-to-face time with customers.
When talking with customers, you want to be on top of your game, so having quick and accurate details about your inventory is crucial. Imagine being able to answer a customer's question about the availability of a particular item in seconds rather than having to sift through mounds of inventory in your back room. One of the advantages of a POS system with inventory management capabilities is improved customer support. Know what things you have on hand to make the most of your face-to-face time with customers.
Ways to know that POS financing is suitable for your business
Average Order Values are High (AOV)
Customers would undoubtedly appreciate the opportunity to break down their transactions into installments if your company already has high AOVs. Not only does this give them more financial flexibility and eliminate bulk purchases, but point-of-sale funding has also been shown to increase order prices even more. Using point-of-sale financing, you can make your goods more attractive and affordable to customers who can't afford to pay in full. People are more likely to complete a transaction when they feel they can spread their payments out—and many will even buy more while they're at it.
E-commerce is a significant sales channel.
POS financing is one of the most eCommerce-friendly credit solutions for your customers if you do a lot of business online. Layaways are too inconvenient to sell digitally, and branded store credit cards take time to accept. On the other hand, applying for POS financing takes just a few minutes and can be completed directly on your website. When online shoppers can obtain instant credit without leaving the store, they are more likely to complete the checkout process and become paying customers.
You also have branded credit cards.
If you're already offering a private label credit card to your customers (and they're using it), it's a positive sign that they're interested in credit. Modern consumers, especially millennials, are wary of credit and store-branded cards, as previously stated. As a result, point-of-sale financing can be a viable credit option for younger consumers who want to shop with you but don't want to apply for a credit card. Consider it Credit 2.0. It's an advanced financing option that's both easy and adaptable, making it even more appealing to today's shoppers.
Products are long-lasting and durable.
If you sell sturdy, long-lasting items like furniture or jewelry, POS financing makes a lot of sense. Unlike consumables like toothpaste or cereal, shoppers prefer to think about a purchase for a longer time if it's something they'll use for a long time. Customers are now more likely to consider all of their choices and spend more time evaluating various merchants. As a result, a shopper-friendly credit option like point-of-sale financing might be just what you need to stand out. When done correctly, it will help consumers move through the checkout process more quickly.
You have Problems With Cart Abandonment.
If you're having trouble can conversions on your eCommerce platform, POS financing might be able to help. High prices, along with a shortage of payment choices and shipping costs, are among the most common reasons for shopping cart abandonment. Customers typically come to a halt when it comes to finalizing an order and begin weighing the costs. The availability of POS financing alleviates this problem. Purchases are more affordable thanks to daily installments, and consumers are more likely to complete their orders.
It would be best if you improved customer satisfaction.
Retailers must compete on experience in a world where customers have more options than ever before. If you want to succeed in today's retail environment, you must create a pleasant and comfortable shopping experience. Although product availability and customer service are important factors, the checkout process can significantly impact the shopping experience. Customers will leave your shop and go elsewhere if they cannot complete their transactions most conveniently for them. You may avoid this by providing flexible payment solutions, such as POS finance. This will significantly improve the checkout process, resulting in higher conversion rates and a better overall view of your brand.
Traditional forms of credit are not available to customers.
Payment cards and other types of credit will continue to play an essential role in many people's financial lives, but you must keep in mind that they are not available to everyone. Furthermore, some people may want an alternative to conventional credit. This is where point-of-sale financing will help. You may attract consumers who don't have access to traditional credit by providing an alternative payment option. Options for POS funding and closed-ended credit Enable shoppers to budget for their purchases by breaking down payments into predictable installments.
To summarise, if you sell high-ticket or long-lasting and durable goods and are having trouble with people leaving their purchases, especially online, POS financing might be right for you. Furthermore, if you appeal to younger, card-averse customers or want to boost the overall shopping experience, you can investigate and use point-of-sale financing to increase revenue.
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