Home CE Retail Smoothing the Path to Purchase

Smoothing the Path to Purchase

Financial Services Consumer Electronics
Credit: iStock

Dealerscope: In what ways has the dramatic consumer shift during the pandemic period towards an eCommerce shopping experience impacted the retail finance sector – particularly for the consumer technology and appliance industries? And do you expect the shift to sustain, even after buyers are able to shop for their tech products in person?

Orlando Zayas, CEO, KatapultThe pandemic forced financial service providers to shift focus from brick-and-mortar experiences to improving or creating a customer-centric ecommerce experience; it is not enough to just be online. The ecommerce experience and decision process is completely different from that of an in-store experience, it requires specific expertise and a strong understanding of the consumer. I anticipate that this trend will continue and ecommerce will continue to be an important segment to cater to. 

Martin Kuhn, President, Tempoe/SmartPayConsumer buying behavior has moved aggressively toward ecommerce through the pandemic. In order for retailers make the most of each buying experience, offering a simple, integrated payment solution that reaches the widest potential customer base is critical. While we do expect a move back to more in-person shopping experiences, there is no doubt that a large portion of ecommerce buying behavior is now cemented into long-term consumer demands. 

Chad Lyon, Head of Electronics & Appliances, Wells Fargo Distribution Finance: The shift to an ecommerce shopping experience is one we’ve been following for some time. We expect this trend to continue, and feel the independent consumer technology and appliance retailers are well positioned for this movement. Seeing our retailers effectively add online capabilities to meet customer needs in a short period of time has been exciting to observe. They quickly invested in providing an omnichannel customer experience, one that is fully transactional with features aligning with evolving consumer behavior.  

What major trends that have arisen recently are you keeping track of, with regard to leveraging them to tailor the particular products and services you offer to retailers to serve their consumer technology and appliance customers?   

Kuhn: With the trend toward the BNPL (Buy Now Pay Later) products, consumers must be careful not to overextend themselves with these short-term payment solutions.  At Tempoe/SmartPay, our product is similar in the fact that customers can obtain ownership in as little as 90 days, but we offer the opportunity to pay over extended terms so that customers are not forced into high short-term payments.   

Lyon: One thing we’re watching is if consumer behavior continues to trend towards same-day and next-day delivery of ecommerce purchases. We’ve seen this evolution in other consumer markets where retailers changed their distribution model to deliver online orders the next day, and I think it’s quickly becoming a preference among consumers. Of course, if you could have your product delivered the next day, why wouldn’t you want that? However, the implications of this trend likely require retailers to stock more inventory to meet consumer demand, which our financing programs are designed to support.  

How are your methods of training retail sales associates being handled these days to ensure that retailers are properly and effectively presenting your services to customers?   

Kuhn: Virtual trainings have been essential for education of store associates. Videos, webinars and conference calls have replaced a portion of the “in-store trainings” once commonplace in our retail relationships. Partnering with retailers to get our solutions implemented into their in-house LMS (Learning Management System) has also been essential to keeping associates well informed on our products. 

What are the biggest challenges your industry faces in the consumer technology and appliance spaces, and how are you addressing them?  And what are the biggest benefits retailers can realize, when working with you to address consumer needs? 

Lyon: Our industry has a good challenge right now — high demand. Due to a few factors from COVID, including more time spent at home, increased utilization of appliances, and the booming housing market, we’ve seen a huge spike in demand for appliances. This increased demand has challenged the core values of the industry, which is accustomed to meeting consumer expectations on product availability. We felt the impacts of this challenge as well, as our financing programs play a key role in our retailers’ ability to acquire inventory. We continue to support our customers through flexibility on our programs, process changes, and consistent communication. All great opportunities come with challenges, and we feel confident this market will meet these challenges.  

Zayas: Educating retailers is crucial to ensuring that the nonprime customer, which represents one-third of Americans, has access to purchase the items they need when they need them. By implementing lease-purchase options, you can bring these nonprime consumers the same buying power as a prime consumer and capture a new customer base. Our retail partners see increased transactions, higher average order value, reduced cart abandonment and an increase in customer satisfaction.  

Kuhn: With the shift to more online shopping, there has been a significant increase in fraudulent behavior, which significantly puts payment providers at risk. Introducing advanced underwriting solutions to combat this fraud is essential to maintain a strong program.  At Tempoe/Smart Pay, we have built the proprietary underwriting solutions and fraud prevention tools to maximize our customers’ sales, while reducing this negative impact of fraudulent behavior – and without negatively impacting the consumer experience. 

What is the outlook for your business for the rest of 2021? And what kind of above-and-beyond assistance can retailers count on you for, moving into the end of this year and into next year?  

Lyon: We have a favorable outlook for 2021. We see retail and replacement sales remaining above trend as consumers are staying home and increasing usage of their appliances. Discretionary sales will benefit as high savings rates in the U.S. find their way into home investments. Additionally, new home construction is expanding, creating more demand for product. Retailers can continue to count on our programs to deliver an uninterrupted flow of goods from OEMs to retailers, ensuring they have the products they need to meet consumer demand.  

Kuhn: We are bullish on the rest of 2021 and beyond, with the expectation that more consumers will be back into the market. A hyperactive real estate market creates need for new consumer products and the continued support from the stimulus programs will keep sales moving in the right direction. Additionally, we see more and more companies shift their operations to full ecommerce channels with less dependence on brick-and-mortar locations, which keeps the pressure on payment providers to drive innovation and the evolution of retail payments with technology solutions. We feel we are ahead of most when it comes to how we adapted.  

Zayas: I am excited about the year ahead; 2021 will be another year of growth and innovation for Katapult as we stay focused on providing retailers the payment solutions they need to serve their customers. Katapult works very closely with our retail partners to provide support and strategies and we will continue to do so. We are the leading e-commerce fintech platform focused on the subprime customer, because of the hands-on support we provide.