NEW YORK, Aug. 5, 2019 /PRNewswire/ -- According to a survey commissioned by leading installment payment solution Splitit, 35% of consumers would spend more on back-to-school shopping if offered the ability to use flexible payments solutions such as interest-free installments or 'buy now, pay later' plans. The survey also revealed that a staggering 40% of consumers are planning to do their back-to-school shopping on Amazon, presenting a challenge for retailers looking to capture consumer attention this back-to-school season.
Competing with Amazon
In order to compete with retail behemoths like Amazon, merchants must find ways to gain a competitive edge. Splitit's findings reveal that flexible payment options present a unique opportunity for retailers. In addition to the 35% of consumers who said they would buy more back-to-school items if they could use flexible payments, 37% said free shipping would encourage them to spend more money this back-to-school season, and 29% would be incentivized to spend more by a 10% discount.
When asked to determine their top motivation when choosing where to shop for back-to-school purchases, 48% prioritize finding the best prices and 33% prefer to buy as many items as possible in one place. Another 22% of consumers would be most motivated by flexible payment options, such as monthly instalments or 'buy now, pay later' plans.
"Retailers and direct-to-consumer brands are in fierce competition with the likes of Amazon and only those who differentiate themselves will succeed. Our research clearly shows that consumers crave flexibility," said Gil Don, Splitit CEO and Co-Founder. "Back-to-school shoppers want payment solutions that suit their cash flow without incurring debt. Merchants who meet this demand will draw customers, combat cart abandonment, and see their bottom lines grow."
Splitit's survey revealed that of the 43% of consumers who plan to do back-to-school shopping, 82% plan to spend under $500. When asked what they plan to purchase this back-to-school season, consumers indicated that:
- 41% plan to buy clothing and/or shoes
- 28% will purchase backpacks, school bags, or luggage
- 25% plan to purchase stationary
- 16% will buy computers, laptops or other electronics
Splitit's findings demonstrate that Gen Z shoppers, many of whom are heading to college as freshmen or returning students, have payment flexibility on the brain: 23% said that flexible payment options would encourage them to buy more this back-to-school season. Another 26% said that flexible payment offerings would help them avoid overspending.
Nearly 50% of Gen Zers said they'll spend under $100 on back-to-school shopping this year and 30% plan to spend between $100 and $500. When asked where they plan to shop, Gen Zers stray from the norm, with 41% choosing larger retailers over Amazon (35%), followed closely by discount stores (34%).
Gen Z's preference for cash is even more pronounced than the average customer: 35% prefer to use cash only for back-to-school purchases, beating out debit cards at 20% and credit cards at 13%.
The survey, conducted in July 2019, was jointly carried out with Google Consumer Surveys based on a representative sample of more than 1,000 respondents from the United States, aged 18-65+.
Splitit is a payment method solution enabling customers to pay for purchases with an existing debit or credit card by splitting the cost into interest- and fee-free monthly payments, without additional registrations or applications. Splitit enables merchants to offer their customers an easy way to pay for purchases in monthly installments with instant approval, decreasing cart abandonment rates and increasing revenue. Serving many of Internet Retailer's top 500 merchants, Splitit's global footprint extends to hundreds of merchants in a number of countries around the world. Headquartered in New York, Splitit has an R&D center in Israel and offices in London and Australia.