HOW LAYAWAY IS TAKING BACK ECOMMERCE
Around the holiday shopping season, the term ‘’layaway’’ shows up frequently in marketing materials like newsletters, holiday ads, etc. This practice is especially prevalent amongst big-box retailers looking to loop in shoppers to buy in mass quantities and at earlier and earlier timeframes. The idea is to create a more affordable holiday for the family while boosting income for the brand as well.
What if we told you we could recreate this same scenario, but for you and your not-as-big-box brand?
In this article, we’ll break down the ins and outs of layaway shopping, and how to apply it to one of our favorite eCommerce management platforms, Shopify.
Research indicates that abandoned shopping cart rates were reduced by 7% in 2018 when the idea of payment plans was introduced at checkout.
The Way To Layaways Layaways is achieved through the help of payment plans selected at check out. Users will receive their purchase as if they have already paid in full, but will in fact pay off the remaining amount either within the next 30 days or in recurring installments over a predetermined amount of time. That predetermined amount of time is decided upon between you and the layaway payment program you choose to use.
Reduce Abandoned Shopping Carts? Yes, Please!
Abandoned shopping carts are one of the highest-ranking complaints businesses have about their relationship with their customers and the eCommerce side of their business. It’s a taunting visual for a business owner, a marketing opportunity for the marketer on staff, and an easy way for a customer to opt-out of purchase, for reasons ranging from cost to lack of payment option diversity. Research indicates that abandoned shopping cart rates were reduced by 7% in 2018 when the idea of payment plans was introduced at checkout. While that may be a small percentage, 7% could be a difference of thousands of dollars for some businesses. Adding layaway features might help eliminate some reasons as to why users are abandoning their shopping carts at checkout. It can also be a chance to reconnect with said users and assist them in completing their purchase via layaway.
It Unifies Shoppers Across Incomes
As previously mentioned, layaway options are popular among shoppers looking to fulfill holiday shopping lists. It’s also assumed that shoppers only use this feature for products or services that are of a higher cost, like mattresses or musical instruments. However, layaway can also be applied to products that are in a more affordable range, with the recommendation that stipulations be imposed. Try offering a selection of products or services that range in price under layaway options to gauge where your users fall within the price range spectrum and where they seem most interested in using this feature.
How It Works On Shopify
Currently, there is a waiting list for U.S. users only to join the first group of businesses to add the layaway feature to their stores. This new feature was only announced in May 2020, so the rollout is assuredly taking some time to facilitate efficiently. Once added to your store, customers will have the opportunity to pay a percentage of the total product at the time of checkout, while also opting for a committed payment program that will allow said user to pay off their purchase within 4 interest-free payments. A flat rate for them, a payment upfront for you, it’s truly a win-win situation.
Third-Party Recommendations
If you can’t wait to add layaway to your store, there are few third-party apps available that are Shopify-ready for installation and use as soon as you’re prepared to flip the switch. Note: This is a mere sampling of the vast selection of third-party apps available to use in layaway purchasing. As always, make sure you do your own research before investing in a platform.
Klarna (Sweden)
Launched in Sweden in 2014, Klarna supports over 190,000 retailers in 17 countries across the world, including the likes of ASOS, H&M, and Samsung. Klarna offers customers layaway options to split the purchase into two payments, one upfront and one 30 days later, or three equal installments over a determined period of time. This seems to be the top recommendation amongst developers.
FuturePay (n/a)
FuturePay offers upfront payment for vendors, monthly payments for customers, and even a “Put It On Your Tab” feature for customers who might employ their services on other platforms. The overall goal of FuturePay is to allow customers to “Go Credit Card Free,” so it’s clear they go above and beyond to keep their clients and in turn, the client’s customers, satisfied.
Splitit
Splitit is the only platform that allows online shoppers the flexibility of applying pay-over-time payments to a credit card, as opposed to a debit card or bank account. They also allow customers the option to pay off purchases in smaller-than-usual increments so that users with lower income bases can keep more money, longer. Check out their case studies that dictate they’ve experienced a 20% increase in average order value amongst customer shopping carts and a 10% decrease in cart abandonment.
Executive Summary
Layaway marketing has definitively shown us that even traditional advertising can make its way into the new era of the digital age. While it may take some time to get the Shopify-supported layaway checkout feature built into their software, it’s a relief to know that there are several platforms currently available and ready to integrate into your shop that can make that vision a reality today. As you look ahead to adding this feature to your holiday marketing plans, make sure the services are 100% integratable and that you’re ready to fully execute this plan, both from a social media and website perspective. If you need help getting started, make sure to contact us.
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