Picture it: You spy the perfect gift for a particular person in your life. Maybe that special person is you (we won’t judge!). But, the price tag that accompanies it stretches you too thin to feel as comfortable as you would like.
You sulk, bemoan, and commiserate. All you need is this one item to make your holiday shopping complete!
We’ve all been there. While it’s nice to think that we have an unlimited shopping budget and that price is irrelevant, the truth is that we can’t throw caution to the wind and spend whatever we want. Sometimes, it’s not even about gifts but instead items of necessity that we don't have the funds for.
Now Imagine that is not you but rather your customer shopping on your website or storefront? Wouldn't you like a way for your customers to purchase without busting their budget or being forced to apply for financing at check out???
Of course you do, shopping cart abandonment is costing your business serious money!!!
According to recent studies, the average rate of cart abandonment is 75.6%. You have already done the hard work of landing customers to your website or store, so if you want to increase revenue, it's imperative to understand what causes shopping cart abandonment and what you can do about it.
What Causes Shopping Cart Abandonment?
A study by Econsultancy, 25% of shoppers abandon their cart due to price. Additionaly, 27% of customers leave because the checkout process is too complicated. The average checkout has over 23 elements, while ideally, consumers prefer 12 or less. Lastly, 35% of people will abandon a cart if they don't trust it or it isn't secure.
Adding financing options at checkout may seem like an excellent wat to address affordability. However, financing adds complexity and uncertainty to the checkout process and can increase cart abandonment. The has to be a way to be a better way to make your products and services more affordable and convenient for the consumer, and there is.
Meet Splitit, the company revolutionizing merchant services and how we shop.
Splitit offers shoppers online or in stores the option to split their purchase into interest-free, monthly installments using their existing credit or debit cards. Unlike other services or offering instant financing, the consumer is not asked to open a separate account or download an app.
Everything is handled seamlessly between the merchant and Splitit so that the customer may enjoy a speedy and simple checkout. Additionally, allowing customers to split their purchase payment over several installment payments increases the perceived affordability of the purchase.
“With the option to split it into three, five, even 12 or 24 monthly payments, they are free to buy it now by eliminating the question whether they can afford it now.” – Gil Don, Co-Founder Splitit
Merchants offering Splitit have seen an 80% increase in average order value (AOV), a 12% increase in sales and an 11% decrease in shopping cart abandonment. Increasing your average transaction value (ATV) is critical to boosting your bottom line, and Splitit is the perfect service to help merchants upsell while maintaining affordability.
Splitit Success Stories
“Since offering Splitit to customers, the average order value has increased by more than 85% for shoppers spending more than $120 in products. We have also seen more than a 10% decrease in checkout abandonment for high order value baskets.” – Daniel Rothman, CEO of GlassesUSA
How Splitit Works
Splitit offers three products based on a merchant's goals and needs.
1. Monthly Installment Payments
Shoppers can split their purchases into up to 36 interest-free monthly payments using their existing Visa or Mastercard
Shoppers get the chance to try out items for up to 90 days and then decide if they are going to keep it. After they choose, shoppers can then go ahead and pay in full, or start an installment payment plan.
3. Split Pay
Shoppers who do not have a sufficient available balance on one card have the option to split their installment payments into two different credit cards. This feature allows the shopper to get what they want and not have to apply for another credit card or go into debt.
Splitit Quick Facts
Splitit research found that about one-third of shoppers said they are more likely to purchase if offered monthly installment payments.
Why consumers love Splitit,
- They can break their purchase price up into multiple, manageable transactions.
- They can choose the terms of repayment. Whether it’s two months, twenty months, or two credit cards, the ball is in their court as to how they “Splitit.”
- No additional interest on their purchase. The only interest they might pay is on their credit card.
- No need to create a separate user account or “sign-up” with Splitit. The entirety of the payment goes through the main retailer, Splitit, and the retailer will handle the logistics.
- Instant approval
- Will not impact the customer's credit score.
It is easy to see why Splitit is such a value-added service. Consumers are always looking for the best deals and for ways to manage cash flow. When I worked as an advisor, clients would routinely ask to pay for services on their credit cards, not because they needed it; instead, they wanted to take advantage of interest-free financing, cash back perks, or travel rewards.
The auto manufacturers learned that despite the costs of offering zero-percent financing, providing the incentive increases sales and that consumers are willing to spend more when provided funding. Klarna conducted and poll and found that 39 percent of respondents said they would spend more money if given instant credit options when shopping online. The same poll 75 percent of consumers preferred merchants offering instant financing, and 28 percent would be very likely to change merchants to use instant financing.
Splitit offers the benefits of offering instant financing, without the negatives that increase shopping cart abandonment. Currently, Splitit is offering 60 days free for the holiday shopping season, so there has never been a better time to request a free demo and become their next success story.
Michael launched Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.