According to data from Versatile Credit, the volume of approved financing for retailers over the week of Thanksgiving and Black Friday improved by over 13% compared to last year — with average approval amounts seeing an increase of 17%.
In a recent article from CNBC, data from Sensormatic suggests that in-store traffic on Black Friday improved by 47.5% compared to last year. According to Adobe Digital Insights, eCommerce remained relatively flat compared to last year, with consumers spending an estimated $5.1 billion dollars.
According to Transunion’s 2021 Holiday Retail Report, 22% of respondents said they plan to spend more on holiday shopping compared to last year, with 54% of respondents saying they plan to shop into November and December. 84% of these respondents say they plan on doing at least half of their shopping online.
“Shoppers are being strategic in their gift shopping”, said Vivek Pandya, a lead analyst at Adobe Digital Insights to CNBC, “[they] are buying much earlier in the season, and being flexible about when they shop to make sure they get the best deals.” According to Brian Field, senior director of global retail consulting at Sensormatic, two reasons shoppers are spreading out their holiday purchases include apprehension about COVID and concerns about supply chain availability.
As post-pandemic retail comes into focus, it’s important for retailers to understand how this new normal will affect the shopping experiences of their customers, and the importance of providing shoppers with the tools and options to interact with the retailer of their terms — whether they choose to shop in-store or online.
According to Transunion’s report, 15% more consumers plan to use credit for their purchases this Holiday season. This trend indicates the need for retailers to provide shoppers with inclusive financing options that meet the needs of applicants across the credit spectrum, ultimately helping to drive sales and higher average tickets during the holiday season. The availability of secondary and tertiary providers also allows retailers to maintain the flexibility to react to unpredictable market conditions by offering financing options to a wider range of customers.
Buy Now Pay Later (BNPL) options have been gaining popularity with retailers and shoppers this season — with 45% of shoppers claiming they planned on using the new financing option to pay for this year’s holiday purchases, according to Cardify’s recent survey. CNBC reports that the average transaction value for a BNPL transaction is around $200.
While the average approval amounts of Prime lenders did take a dip during the COVID pandemic, approval volumes are recovering. During this dip, retailers with near-prime, no credit needed, and leasing partners were able to meet the needs of consumers by providing them with secondary financing options in the case they were unable to be approved for prime financing.
Customers eligible for prime lending, which accounted for nearly 70% of total applicants, were qualified for an average of $5,400 during the week of Thanksgiving and Black Friday. Near Prime eligible shoppers were approved for an average of $3,200, while no credit needed applicants were approved for an average of $2,100 when applying through the Versatile Credit platform.
Versatile’s cascade technology guides shoppers through an intuitive, self-directed process that provides them the ability to find the financing program that best fits their needs, including features such as interest-free financing. This technology is available in-store on a variety of devices, including dedicated kiosks, retailer-owned tablets and PCs, or the consumer’s own mobile device. Retailers can also leverage the technology on their eCommerce websites, allowing shoppers to easily apply for financing and make purchases with their newly approved line of credit.
Versatile Credit can help retailers build a financing program designed to take customers through a seamless application process to find the financing that best fits their needs and situation, regardless of how they decide to shop. Versatile’s powerful analytics platform, Versatile Insight, can also provide retailers with insight into the performance of their financing program, wherever and whenever shoppers are applying.
Reach out to Versatile Credit today to learn more.