1 Statista. (Sep, 2024.) Consumers that would shop mostly online vs. offline worldwide 2023, by country.
Variety retailers cater to a diverse customer base, offering a wide range of products across categories, including household goods, clothing, electronics, and beauty. Flexible financing has become a powerful tool in this competitive market because it helps variety retailers meet evolving customer demands — while driving growth by attracting new buyers or increasing purchase volume.
Offering tailored payment solutions — including buy now, pay later (BNPL) — can help create new opportunities for customer acquisition, boost average order value (AOV), and increase overall customer satisfaction.
Below, we explore why flexible financing can be a growth driver — and how businesses can leverage it effectively.
Customers today have more choice than ever, and variety retailers must adopt new growth strategies to ensure they remain competitive.
A Statista report revealed that 43% of US customers prefer to shop online rather than in stores, as of 2023.1 E-commerce platforms provide customers with access to thousands of retailers in a few clicks, meaning businesses must work to differentiate themselves through standout customer experience and added value.
Retailers can distinguish themselves by tapping into innovative sales growth strategies, such as BNPL, digital wallet payments, and one-click guest checkouts. Adding targeted messaging that makes the available BNPL options clear can also help drive more sales — and, according to RBC Capital Markets, can increase conversion rates by 20%–30%.2
As customer expectations shift toward increasingly personalized and convenient financial solutions, embracing BNPL options can help retailers boost loyalty, increase repeat business, and stand out in the crowded retail space.
BNPL options like PayPal Pay Later — PayPal’s BNPL offering — enable customers to spread out the cost of larger purchases over time, making high-ticket items more attainable. Customers with an additional option to pay with BNPL may buy products they might otherwise have hesitated to purchase — and may also opt for higher-end or additional items, increasing their AOV.
For businesses, the impact of BNPL can be significant. In the United States, PayPal Pay Later AOVs for variety merchants are 79% higher than standard PayPal AOVs.3 And flexible financing does more than just increase sales in the short term — it also helps build customer loyalty.
Variety retailers that offer BNPL options can enhance the overall customer experience, helping lead to greater customer loyalty and more repeat purchases. Retailers looking to maximize the full scope of flexible finance could consider integrating dynamic BNPL messaging and adding separate buttons for PayPal’s Pay Later solutions. This would inform customers of their options in advance and allow them to select the payment plan that best fits their needs.
Adopting flexible financing options and seamlessly integrating them into their sales channels can help variety retailers achieve significant improvements in customer acquisition and retention — and ultimately help drive long-term business success.
The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
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