To win, retailers must offer a try-before-you-buy option
While consumers are showing an increasing preference to shop online, a major setback which deters customers from buying online is the inability to see and try on items before departing with their cash.
According to a new national study, in order to address this challenge, online retailers should give consumers the option to “try before you buy”.
The survey carried out by Researchscape International on behalf of Klarna North America gathered the responses of 2005 consumers aged 18 and over.
The survey was designed to better understand the behaviors and attitudes of consumers surrounding alternative finance options.
The survey found:
Almost three quarters (74 percent) of consumers said that having the ability to try out a product before paying for it would remove a major drawback to online shopping.
A “try before you buy” option was ranked as the number one preferred payment option for buying apparel from an online retailer (37 percent).
This significantly surpassed other options including credit cards (20 percent), debit cards (16 percent) PayPal or store credit cards(11 percent each), and three evenly split payments every 30 days or four evenly split payments every 14 days (2 percent).
The want for a “try before you buy” option was particularly evident when respondents were asked about fashion apparel. 85 percent indicated they would order five or more items to try on at home providing they would not have to pay for them in advance.
“Fashion fit and look can be difficult to judge from product descriptions, digital photos and videos alone,” said Elizabeth Bramlage, head of U.S. marketing at Klarna.
“By offering a ‘pay later’ option, consumers are finally able to bring the fitting room into their own homes and have the peace of mind that they will only ever be responsible to pay for the items they love,” added Bramlage.
Many companies have already started to offer this option. Fashion retailer ASOS, for example, offers customers a 30-day-period to experiment with apparel before either deciding to keep and buy it or to send it back.
But with this growing trend, comes concerns regarding a “returns tsunami”. With returns costing UK retailers GBP£60 billion per year, could the Try-Before-You-Buy option be a danger to retailers?
A Brightpearl report named “A Returns Tsunami for Retail” reveals how the trend may overwhelm retailers with a surge of intentional returns that may undermine profits.
The report outlines how 51 percent of retailers revealed their margins were being impacted by the process of handling and packaging returns.
A further 72 percent believed they would be squeezed even further as the Try-Before-You-Buy trend becomes more popular.
But for retailers who have the right framework and solutions in place to manage returns, the trend could surge sales.
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The “try before you buy” option seemed to be so attractive to shoppers that 71 percent of respondents indicated they would use the payment method if it was offered, and another 71 percent reported that they would be “moderately”, “very” or “completely” likely to choose a retailer offering the option over one who did not offer it.
These results indicate the necessity for retailers to offer this option in order to boost consumer confidence in purchasing goods online.
As shown in numerous studies, those companies who go the extra mile with payment options will find they are rewarded with more business and converted sales.
27 March 2020
25 March 2020