5 minute read
Big ticket items aren’t your everyday purchase and the cost compared to other products is enough to make some shoppers second guess their decision. So how do you reduce anxiety and drive sales for more expensive products online? In our new study, The Big Ticket: What’s Stopping Shoppers, we dive deep into what’s causing friction online and how retailers can ease customers’ fears.
Keeping tabs on habits and preferences is important, and to make the most of sales opportunities, businesses need to know what shoppers are looking for in an online experience.
What big ticket items shoppers are buying online
Big ticket items encompass a variety of verticals from appliances to jewelry to furniture. More than half of all respondents surveyed (56%) said they have made a big ticket purchase online within the last year or plan to soon. But what are they buying?
The top three items that respondents said they have bought or plan to buy online within a year were electronics (61%), furniture (48%), and appliances (37%). Additionally, only 6% of surveyed shoppers said they had bought luxury goods online or plan to, and as little as 4% for fine jewelry. Knowing what customers are buying online is great, but one of the first steps to improving your online sales is finding the reasons why some shoppers may hesitate to buy online.
Why shoppers hesitate to buy big ticket items online
The commitment that comes with buying expensive items online is rarely overlooked, and for 66% of respondents, the current online experience isn’t enough to get them to check out. Here are the top reasons why our respondents abandon their carts:
- 78% prefer to interact with an item first
- 63% prefer the ease of returning products in-store over online
- 25% prefer to speak with a store associate to resolve any questions
- 15% no financing options available
- 8% think the online payment process is too complicated.
Cart abandonment is a pain for all retailers, however, businesses can entice more shoppers to not leave empty handed with online financing payment options.
How financing can benefit retailers
Do you think offering credit cards is enough? Almost three-quarters of shoppers (71%) said that offering more payment options is “very important” or “somewhat important.” It’s imperative to listen to your customers’ opinions because in the end they determine your success.
Many retailers can benefit from financing because not all shoppers have the same mentality for what constitutes a big ticket item. Some may be comfortable spending thousands while others may shy away from a couple hundred. For items that cost less than $1000, almost half of all respondents (47%) said they would choose financing over credit cards. Even a purchase of $200 would be enough to get 15% of respondents to use financing. Imagine the impact an additional 15% of sales could have on your business that you might be missing if you don’t offer financing.
In addition, big ticket purchases don’t only refer to single, expensive items, but also an accumulation of items in a cart. A shopper could buy several pieces of clothing that alone aren’t expensive, but together create a big ticket purchase. Financing can help improve AOV and get shoppers to buy more from your store. On Black Friday, a huge day for big ticket purchases, FuturePay merchants saw an AOV increase of 24%. Shoppers want to be able to finance a purchase, so add them to your store and get more people to click that buy button.
Flexible payment options: it’s what shoppers are looking for
Cost plays a big role when deciding on big ticket items and in combination with high credit card interest rates, shoppers can become overwhelmed before they check out. Besides, not all shoppers can or will use their credit cards for big purchases. Some may not own a credit card, some may not want to carry a balance, and some may not have enough available credit on their cards. With flexible financing, shoppers can break up payments over time to fit big purchases into their budget.
For 56% of our surveyed shoppers, a financing option would make them more likely to buy a big ticket item online. But it’s not just traditional financing shoppers are looking for – 68% of respondents said that the ability to break payments up would convince them to make a large purchase. Thanks to the growth of FinTech and payment technology, retailers now have access to a variety of payment options to address a wide range of shopper needs.
Traditionally, it was difficult for SMBs to access online financing which made it even more difficult for shoppers to purchase big ticket items. But now with more alternative payment options and turnkey financing programs, shoppers can pay the way that suits their needs.
What shoppers want in a payment option
Before altering any element of an online store, retailers need to know which features shoppers deem most important. We found the top three elements shoppers want in a non-credit card payment option are:
No hidden fees. Nobody likes being hit with extra costs after expressing interest to buy a product so offer a transparent payment option.
Low interest rates. If shoppers didn’t care about interest rates more would be fine paying those hefty credit card fees.
Flexible payment schedules. Not everyone can follow a rigid payment structure so let them choose what works best.
Offer flexibility to maximize potential for big ticket purchases
To maximize the potential for big ticket sales, retailers should offer flexible payment options to ensure that every customer can pay how they want because the more something costs, the more shoppers debate a purchase.
All the above insights are from our 2016 Q4 data study – The Big Ticket: What’s Stopping Shoppers? The study surveyed 1,500 US shoppers, diving into the frustrations getting in the way of completing big ticket purchases, and how alternative payment options and financing can influence what people buy.
For more insights about shoppers’ payment preferences, buying behaviour, and preferred technology download the full report here.