As buy now, pay later payment options continue to surge in popularity, new research has discovered that the majority of customers (83%) would use point of sale (POS) finance when purchasing from SME fashion and shoe retailers.
The research by finance solutions provider, Duologi, found that almost one in five customers (17%), are now asking for POS and buy now, pay later options, when shopping with small and medium sized fashion retailers.
A further 22% of customers said they now expect POS finance from SME retailers when shopping in-store or online, illustrating a shift in consumer payment expectations and attitudes.
The Finance: an SME issue report, which surveyed 500 SMEs across a range of retail sectors, found that the majority (83%) of retailers have considered offering finance to their customers, with two-thirds (66%) of retailers that do offer POS finance, saying they do so as it makes business sense.
The race to keep up with the rapidly evolving retail sector means that 18% of SME fashion retailers already offer POS finance options in an attempt to keep up with their competitors.
This was highlighted as one in 10 (11%) fear bigger retail players like Amazon will steal their customers, as they are able to provide multiple payment options, lower prices and have greater visibility online.
Michael Bevan, CEO of Duologi, said: "There is no denying attitudes to alternative finance options have shifted in recent years, with the research showing the majority of customers now consider using POS finance – a 10% increase over the past two years. It is therefore important that fashion retailers are evolving to meet changing customer expectations."
POS finance is also proven to increase sales and customer loyalty so those fashion retailers that haven't yet looked into offering it could be missing out on additional revenue – especially those that worry about the future of their business. Current POS finance systems are easy to implement and work seamlessly alongside existing finance options, in-store and online.
However, the research highlighted that 33% of those SME fashion retailers that currently do not offer POS finance options, weren't convinced finance would drive ROI for their business. More than a quarter (27%) SME fashion retailers also felt that offering POS finance was too much hassle, showing that finance providers in the retail sector still have work to do when it comes to proving the value of alternative payments partners.
Michael Bevan, continued: "POS finance has the potential to increase customer loyalty, repeat purchase rate and overall basket size, as consumers opt for higher ticket items knowing that they can spread the cost over multiple months. However, there is a job to do to convince certain retailers about the benefits of POS finance. Given that finance drives on average 40% growth for retailers, it seems that some lenders are failing to demonstrate how finance can work for their business."