Retailers Seek Flexible Financing Options to Boost Sales, Customer Experience

Offering a broad range of financing options helps merchants’ sales while improving the customer experience.

Fresh off a successful Black Friday and Cyber Monday, Vicki Turjan, president of Versatile Credit, said retailers are focused on what’s next.

“It’s an iffy time for retailers, so anything they can do to drive the almighty dollar, and revenues, is a good thing,” she said.

And in that bid to drive revenues, she said, it’s important to note that as consumers are pressured, as they live paycheck to paycheck, and as some consumers’ credit scores fall from prime levels, merchants need a full stack of financing options available at the point of sale (POS) to help drive sales conversions.

Against that backdrop, retailers are taking stock of how expensive it can be to offer long-term financing programs over 60 months (with no interest) for example, through their own cards. Versatile Credit serves as an invisible financing engine for retailers, giving them a variety of options to provide credit to customers in omnichannel settings — online, via eCommerce or in store. A wide range of traditional and nontraditional lenders are joining the fray.

For the merchants themselves, that’s a boon, as they can make sure that at the POS a variety of financing options exist that move well beyond the confines of installment plans and well beyond just one or two offers. That plethora of choice is enabled by Versatile Credit’s online marketplace of lenders that can align offers according to risk tolerance that are extended in real time at the POS.

Promotional Financing Gains Ground

“Promotional financing is pretty significant these days, and lenders are being more judicious with their decisioning,” Turjan said. “Everybody tightens up their belt a little bit and considers credit risk a bit more aggressively.”

There’s also demand for financing across verticals as wide ranging as home improvement and elective medical procedures, travel and even plumbers, she said. The appeal also ranges across consumer demographics.

“We’re seeing some pretty high-income people take advantage of promotional financing,” she said.

In addition, there’s an increasing need to extend financing to less traditionally credit-worthy consumers, who have a need to get the goods and services they’ve come online or in store to browse. The data-driven analytics and platform model such as on offer through Versatile Credit can offer secondary and tertiary offers that wind up being the ones that seal the deal and make the sale.

As Turjan told Webster: “The person that’s a secondary customer today may be a prime customer tomorrow. So, it’s wise to give them a way to be a buyer in your store and create that loyalty.”

Looking into 2023 and beyond, across Versatile Credit’s platform, there’s particular usefulness to be seen from pre-qualification for various financing offers, so that customers can get through applications seamlessly and with speed. Prequalification, she said, winds up diversifying those offers beyond private label and installment offers — and has the ripple effect of putting control in consumers’ hands, while saving the merchant time and money.

“When you put the application process ahead of the product selection, it makes a world of a difference in ticket sizes because you have an informed consumer and an informed salesperson in the store,” she said.

In the end, with a full stack offer extended to the consumer, credit becomes a critical tool.

For the merchants, she said, “you can use credit to drive the sale or save the sale — but either way it’s a huge driver of revenue.”