What is point-of-sale finance?
Point-of-sale (POS) finance is consumer credit offered at the point of purchase – when customers have reached the decision to purchase.
Other examples of consumer credit include traditional credit cards and store cards, as well as increasingly popular online Buy-Now-Pay-Later offerings, such as Klarna and PayPal Credit.
The way customers shop is evolving rapidly – POS finance helps your business stay competitive.
Changing consumer behavior
Customers demand more choice and flexible payment options
Bricks-and-mortar retail is struggling to compete against e-commerce. People can shop anywhere, anytime, thanks to smartphones and greater PC use. They also expect fast and free (or cheap) delivery, easy returns and flexible payment options. Today, consumers demand convenience and choice.
Despite this, there are some sectors where customers still prefer to purchase in-store – Home Improvements is one of them.
The impact of COVID-19 on Home improvements
- COVID-19 has fueled a surge in the Home Improvement market
- People are spending more time at home
- Need for home offices/workspaces more prevalent
The ‘don’t move: improve’ ethos was already gaining traction, but when the first lockdown hit in March, we suddenly found ourselves spending more time at home than ever before. Naturally, people wanted to make their homes as comfortable and functional as possible.
Needs changed, too, with home offices required for the shift to remote work and, amid travel restrictions, gardening’s popularity soared with people keen to both find a hobby and transform their outdoor spaces.
The impact of COVID-19 on finances
- Consumer confidence wavering
- Economic uncertainty
- Customers less willing to pay for big purchases upfront
Despite home improvement sales remaining relatively resilient throughout the COVID crisis, the pandemic has caused widespread economic damage which has now dented consumer confidence. Though showing signs of recovery from the minus 36-point low in June (according to GfK’s Consumer Confidence Index), ongoing uncertainty over job losses means customers are wary of making big purchases upfront. Many people do not have access to savings or wish to dip into them. Point-of-sale finance helps customers get what they need now while giving them the ability to plan their finances and spread the cost.
Why you should provide POS finance
- Your customers want flexible payment options
- POS finance boosts sales
Point-of-sale finance is easier than ever to provide. New innovation during the FinTech boom has streamlined the provision and application of retail credit, making the process fast and pain-free for the customer. Millennials are increasingly disenchanted with credit cards with high interest rates and complex terms. Point-of-sale finance offers greater choice and transparency.
Advantages of POS finance
Point-of-sale finance increases sales by 17% on average, as well as boosting order value by 15%, according to research by Forrester.
For your business
- Boosts conversion rates
- Increases average value of sales
- Attracts new customers
- Encourages repeat business
- Builds trust and brand loyalty
- Improves customer satisfaction
- Easy to set-up and use
- Competitive advantage and USP
For your customers
- Spreads the cost of bigger purchases
- Gives complete transparency
- Empowers customers to manage their finances
- Easy application process
- Improves customer experience
What we do
Shermin are an independent, authorised facilitator of consumer finance solutions for your customers. We specialise in providing Consumer Credit.