Las Vegas, NV—A provider of cloud-based financing technology solutions for retailers, Vyze released key findings from a merchant survey that illuminates the impact of credit on customer loyalty.
The Vyze survey explores the gap between what retailers offer and what shoppers expect. It also indicates actions retailers can take in 2018 to drive sales and loyalty.
The online survey, conducted in January 2018, focuses on three critical areas: what merchants are doing today to improve the checkout experience; how checkout impacts loyalty; and retailers’ perceptions on the state of their industry.
“Most retailers are optimistic about both the industry and their own businesses, and are actively investing in areas such as checkout and financing to drive loyalty and customer satisfaction,” said Jai Holtz, vice president of Customer Success for Vyze. “As online and mobile shopping continue to boom, we expect to see a rapid rise in the number of merchants creating or expanding their credit loyalty programs to drive conversion, increase ticket sizes and improve customer satisfaction scores.”
Yyze Survey: The State of Retail
According to Vyze’s findings, merchants are optimistic about the state of retail as well as the state of their businesses.
• Six of 10 respondents view the state of retail as “very healthy” (ranking 7 points or higher on a 10-point scale).
• Retailers are even more optimistic about the state of their own businesses. In fact, 3 in 4 merchants view the state of their business as very healthy. Moreover, merchants with loyalty programs rate their business’s health even higher than average (81%).
• A majority of the retailers surveyed view the shopping experience as the key to sustaining a healthy retail sector. And 4 in 10 also identify credit/financing options as influential in sustaining sector health.
Vyze also found nearly all merchants (98%) plan to invest in the checkout experience in 2018. Moreover, they would specifically invest in credit applications and financing within checkout.
• Mobile app technology, the checkout experience and also financing options are the top areas for increased investment in 2018.
• Artificial intelligence and augmented/virtual reality are the least popular areas for investment among the retailers surveyed.
• The survey also found that on average, nearly 30% of goods and services are paid for using retail financing. As a result, improving the credit application process, increasing financing options and improving mobile checkout are the top three areas in which merchants plan on focusing their checkout investments.
When it comes to loyalty programs, 8 in 10 merchants surveyed offer one. In addition, they rate the health of their business more highly than those that don’t offer a loyalty program.
• Loyalty program membership is the top method used to measure loyalty (64%), closely followed by repurchase ratios (62%). Traditional methods such as Net Promoter Score rank near the bottom, with only 43% of merchants tracking this metric.
• Moreover, while monetary incentives are still the top drivers of loyalty, offering multiple financing/credit options (36%), having a high rate of credit approvals (35%) and shortening the checkout experience (36%) are also viewed as influential in building customer loyalty.
• 63% of those surveyed believe that financing declines at checkout have a negative impact on customer loyalty. Respondents stated that credit declines make customers feel offended or embarrassed, causing them to abandon their purchase and go elsewhere.
Serving More Customers
Only half of the merchants surveyed currently offer secondary lenders, and few merchants offer tertiary lenders. Vyze believes this indicates an opportunity to drive loyalty and health by expanding credit options.
• 4 out of 10 merchants believe that secondary/tertiary credit customers are more loyal than other customers.
• While websites and POS terminals are the dominant methods for submitting financing applications, merchants that offer secondary or tertiary lenders are most likely to use paper and text-based applications. vyze.com