Why you need to add AfterPay to your eCommerce website
Afterpay?has 3.3 million customers in Australia and retailers who have adopted this?"buy now, pay later"?payment service has seen a?20-30%?increase in online conversions.
A recent report by ABC, claims that Australian consumers are ditching credit cards for buy now, pay later services. In Australia alone, Afterpay has?3.3 million?customers. According to Afterpay's customer survey, nearly?50%?of users said they spend more using Afterpay, than using debit or credit cards.
In May 2020 alone, Australians dumped more than 100,000 credit cards, taking the number of cards in operation back to levels not seen since 2009. - ABC News
Research firm IBISWorld expects online shopping revenue will grow by?6.4% in 2020-21, to $31.2 billion.
IBISWorld predicts the 'buy now, pay later' industry will grow from bringing in about?$679.9 million?in revenue this financial year to $1.1 billion by 2024-25.
The?Afterpay?business model allows customers to make instant online purchases and pay off the cost over fortnightly repayments. For Afterpay customers is interest-free, as long as they pay on time.
As a retailer, it may cost more to have Afterpay than other payment services however many retailers are enjoying the benefits. Afterpay allows merchants to offer flexible payment options upon checkout. Instead of paying for an order in full, customers can now pay for an order in 4 equal payments. Afterpay has become the premier payment service for many Australian retailers.
Leading brands that use Afterpay
From the retailer or merchant end, when a user signs up and is approved for?Afterpay, and completes the checkout process, everything on your end looks like a normal conversion save the payment. You are paid within?48 hours?by Afterpay themselves.?Afterpay?then takes on the responsibility of collecting ongoing payments from customers and pursuing those who do not pay up on time.
What will I pay as a retailer for Afterpay
From a cost perspective retailers/merchants are charged 30 cents plus commission for every transaction they make via?Afterpay. The commission can range from 4 to 6%.
Does Afterpay integration with my current eCommerce solution?
Afterpay?plays well with most CMS platforms. The Afterpay site boasts “instant integration” with Magento, WooCommerce, Neto, Shopify, Island Pacific, Infinity, Futura4Retail, and Commerce Vision.
Furthermore,?Afterpay?offers “comprehensive technical support for initial integrations and ongoing maintenance whenever you need it.”
While the integration isn’t entirely instant, most of the core functions do work out-of-the-box, however, some customization is needed to match the styles of your website 100% and to resolve any conflicts in the checkout. AfterPay’s integration steps are very clear and their technical support is excellent to help with the set-up.
Does it increase my conversion rate?
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Research shows that retailers see an average of 20–30% increase in customer conversion rates after Afterpay was implemented. - IBISWorld
This is because Afterpay encourages two things out of your users. The first is that, since they can buy immediately and pay over time, they’re encouraged to make purchases that they wouldn’t normally make. The second is Afterpay minimum order size. This encourages your bottom line to increase as Afterpay has a minimum order size. In order to qualify for Afterpay, the shopper must have at least $35 worth of product in their cart. This can be one more expensive product or multiple less expensive products.
Afterpay a hit with millennials and young professionals
Afterpay has now around 10 million active customers globally. A large chunk of Afterpay's customers (5.6 million) are in the massive US market, 3.3 million are in Australia and 1 million are in the UK. The company, incredibly, has signed up more than 1.6 million US users since March alone. Across all its markets, it signed up more than 20,000 customers a day in the fourth quarter.
Afterpay has been especially popular with millennials making quick purchases that, on average, are worth about $153. The company says its average customer in Australia is 34 years old. Playing to Gen Z's physiological desires, the payment platform Afterpay has seen significant growth, recording a 289% increase in sales in the year to June 2018.
"We think there's a major generational shift going on here," says Afterpay head of public policy Damian Kassabgi.
Gen Z is a generation shaped by social media and raised in the aftermath of the 2008 global financial crisis when they witnessed their parents suffer in the recession. As the biggest generation of shoppers with more than 2.6 billion globally, Gen Z’s shopping preferences aren’t just important -- they are setting the trend for the future of retail.
Gen Z seeks brands that connect with them on an emotional level, alleviating financial stress while being aesthetically tailored to their tastes.
25% of 18–24-year olds say they trust brands – a greater percentage than they trust the government, media, the Church, influencers and social platforms (2UM Agency, 2019).
Generation Z and Millennials are generations that instinctively look for low-commitment, straightforward solutions that are budget-focused, customer-centric and empower rather than entrap in their life and this is paramount when it comes to their finances. They want apps that proactively monitor their spending, capture lifestyle data, and advise on the best ways to save or optimize their finances.
94% of Afterpay’s Gen Z customers use their own money, linking their account to a debit card and use brands like Afterpay to manage their budget, minimize inconvenience and monitor their money in real-time. So when it comes to strategies to attract these consumers, digital retailers need to play to this flexibility mindset when considering payment gateways.
7 Ways to Reduce Cart Abandonment
Research has shown that over 37% of online shoppers will abandon their shopping cart if their preferred payment method is not offered. In this day and age where marketing budgets are already tight, most businesses can not afford to have a low conversion rate.
When working to reduce cart abandonment in your online store, you’ll want to take a holistic approach that improves the customer experience from start to finish. It can be tempting to only look for quick fixes, but in order for your strategy to be effective long-term, you’ll want to strive for improvements across various customer touchpoints. Read our cart abandonment tips below to reduce your eCommerce cart abandonment.
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As the Director of Strategy at Triggerfish, I work closely with all our clients to develop the most effective strategy for providing digital solutions to our customers. Where appropriate, we encourage our clients to invest in integrated enterprise eCommerce solutions to achieve their business objectives.