How can you make it easier for customers to complete their purchase? Offer them a painless payment plan. Kevin Wild of Sezzle explains why this is a win/win for you and your customers.
Covid-19 has us all guessing about this gifting season. Although sales have been skyrocketing for many online businesses, many households are experiencing reduced incomes and financial worries. Data from the US Department of Commerce’s Bureau of Economic Analysis shows that overall income, as well as disposable personal income, decreased in May, July, and August.
Offering financing options on your store will give customers buying power they wouldn’t have had otherwise. On top of that, it can lead to an increase in customers and higher average order values. It can also ensure that customers return to your store more frequently and are less likely to return items.
Sezzle, a partner of ShopCreatify, is one financing option available for merchants. The ‘buy now pay later’ payment platform allows customers to pay for their purchases in four installments of equal value, over six weeks, with zero interest. It can be easily integrated with Shopify stores.
Kevin Wild, the head of ecommerce partnerships at Sezzle says:
“Whenever somebody can pay over time, it makes it easier for them to get what they really wanted to buy. That flexibility and the fact that they’re not paying any extra for it is why shoppers love the service so much.”
Sezzle saw a boom in merchant and customer sign-ups after Covid-19 started. “Merchants have been looking for ways to support their shoppers and increase their buying power during this tough time. But shoppers have also been demanding Sezzle more and more. Merchants have probably started noticing the uptick in requests and acted on it,” says Wild.
Because so many more people have moved to shop online as a result of the pandemic, Wild predicts that ecommerce stores are going to do especially well during this year’s holiday season. Offering Sezzle as a payment option gives customers whose financial situation may have been negatively affected by Covid-19 the ability to participate too.
“Solutions like Sezzle are great for holidays because people are always stretching their dollars as much as they can to be able to buy gifts for the people they love. The benefit of Sezzle is that you can buy all your gifts at one time instead of waiting for money to come in. And instead of having a big balloon payment, it would be split over time.”
To inject a bit of fun into this year’s holiday season, Sezzle has launched a “Save the holiday $20K giveaway” campaign. It runs from 1 November to 31 December 2020 and merchants who use Sezzle can become promotional partners if they wish.
During the campaign, customers who buy with Sezzle have a chance to win discounts, gift cards, merchandise, and a chance at the 20K grand prize.
Sezzle doesn’t only benefit shoppers. According to Wild, merchants who offer buy now pay later solutions will see increased average order values (AOV) of up to 10% because more people will spend more. “We’ve seen it time and again. People spend more when they have the ability to pay over time,” he says.
A number of the service’s customers can attest to receiving higher order values after implementing the app. Blackstone Labs, which sells supplements, saw a 122% lift in AOV after it added Sezzle in the first quarter of 2020. Crunchyroll anime store saw a 35.7% increase in AOV on nearly a quarter of purchases in the same time period.
Another Sezzle client, Melt Cosmetics, often releases high priced collections and bundles which can cause price sensitivity and increase cart abandonment. It added Sezzle just before the 2018 holiday season and saw a 30% increase in revenue. In the 2019 holiday season, Sezzle accounted for 34.6% of Melt’s checkout and a 32.2% increase in AOV.
Alfonso Perez, Melt Cosmetics’ COO commented: “Like any online merchant, we like that this app has made us more money. The set up was super easy, and Sezzle has been very helpful and responsive in the year we’ve worked with them. It really does feel like Sezzle cares that we work as partners and not just a hired service provider.”
Wild says that customers return to stores that offer Sezzle more frequently and they return fewer items, most probably because they don’t experience buyer’s remorse – the way a shopper might when they receive their credit card statement.
Financing is something that has historically been difficult for merchants to offer. The process to set it up is long and arduous and it carries a significant amount of risk, especially for smaller businesses.
Offering a buy now pay later option, like Sezzle, gives merchants a better chance against much larger ecommerce stores that offer numerous payment and financing options. “Sezzle is available to anybody who is actively selling online,” says Wild. “By bringing payment services to as many merchants as possible, we can level the playing field a bit.”
Merchants can sign up for the service in Shopify’s settings and have it running on their store within a day. What’s especially convenient about the service is that although the customer is buying on credit, Sezzle pays the merchant the full amount of the purchase upfront.
“A Sezzle order is probably the easiest and safest order you’ll ever find because there’s no risk of fraud or chargebacks. If for some reason a shopper can’t pay us back or it’s a fraudulent transaction, it’s Sezzle taking on that risk. It’s on us to recoup that money. There’s no way the merchant doesn’t get their money.”
Sezzle works on a transaction fee model where 6% of each purchase made through the platform is paid to Sezzle. “As a merchant grows that rate becomes more competitive,” Wild points out.
Despite what one might think, financing isn’t only for businesses that sell expensive products. Wild says that Sezzle is often used for smaller purchases. “A lot of people use it to buy a $50 T-shirt or $20 bag of coffee.” Each purchase that a customer makes using Sezzle is combined in one account on an app where they can easily make and manage their payments.
“We have millions of shoppers who use Sezzle. If they want to use Sezzle, they’re going to find a merchant that offers it,” says Wild. “By not offering Sezzle, you might be missing out on customers because they can’t pay how they want to pay on your store.”
When Sezzle originally launched in 2016 it functioned as a debit card rewards solution. Not long afterward it pivoted to become a buy now, pay later service. While using buy now, pay later options are very popular among younger, Gen Z shoppers who are less likely to have a credit card, this payment option is increasingly being used by older generations.
“It is a really flexible and convenient alternative to a typical credit card where you’ve got to maintain the payments yourself, and pay enough to avoid high interest. Credit cards can become really hard for people to manage,” says Wild.
“Sezzle is similar to credit cards in that when you buy something you don’t pay for it right away. The difference is that there are no fees, no interest and everything you buy is on a set payment schedule, so you’re not put in a position where you can buy something and then have to pay it off for years.”
Sezzle and ShopCreatify developed its partnership about a year ago, soon after Wild started working at the service. He had worked with ShopCreatify founder and CEO, Ross Allchorn, a lot at his previous job before starting at Sezzle. “We had built a great relationship and I see a ton of value in the services ShopCreatify offers and how it’s able to help merchants,” says Wild.
“We’re both really passionate about ecommerce and helping merchants sell more. We’ve always had that in common and that’s why the relationship between ShopCreatify and Sezzle is strong and will continue to be strong.”
And that is good news for all of us.