NEW YORK, November 14, 2018 /PRNewswire/ --
According to a survey commissioned by leading installment payment solution Splitit, nearly 70% of consumers plan to spend over $100 online this holiday season and 30% plan to spend over $500 online. Most troubling for retailers is that 40% of shoppers plan to do the bulk of their holiday shopping this season through large online retailers like Amazon.
The holiday-focused survey revealed that more consumers plan to shop online on Black Friday (38%) than either Cyber Monday (32%) or Christmas (31%). When asked what factors consumers are most concerned about while holiday shopping online, 40% of respondents claimed they are worried about the inability to try out an item in person before paying for it. Shoppers were also highly concerned about outspending their budgets (33%) and high shipping fees (23%).
"With so much revenue at stake this holiday season, retailers must find ways to stand out and attract customers who will otherwise be shopping on Amazon," said Gil Don, CEO and Co-Founder of Splitit. "They cannot afford to sit back and stick to their usual strategies during these highly competitive shopping periods. Online merchants need to offer incentives that recognize customers' unique needs, no matter the holiday, and lend them flexibility without increasing their debt."
Competing with Amazon
Nearly 40% of shoppers plan to do most of their holiday shopping this year through large online retailers like Amazon, according to Splitit's findings, presenting a unique challenge for competing online merchants. Surprisingly, smaller neighborhood stores were the second most popular option, with 25% of consumers preferring to do their shopping locally.
Splitit's survey revealed that retailers can draw consumers to their sites and away from industry behemoths like Amazon using a variety of incentives: 50% of consumers would be more likely to order an item online if they could try out the item before paying for it, a major endorsement for deferred payment plans. Additionally, nearly 46% of consumers said that free shipping would encourage them to spend more money.
Alternative payment options are another powerful incentive for merchants to consider. Splitit found that 67% of shoppers said they would be more likely to make bigger purchases, such as large electronics or furniture, if they are able to pay in monthly installments. Not only that, 33% of shoppers said they are more likely to make a purchase from a specific retailer if they offer an installment payment option at checkout.
Millennials' Budgeting Concerns
Unlike the majority of shoppers, most millennials surveyed said they would be more likely to shop on Cyber Monday than either Black Friday or Christmas. However, nearly 40% of millennials surveyed were most concerned about going over their budgets when shopping online this holiday season. Thirty-five percent said they plan to spend less than $100 on holiday shopping, a stark contrast to older shoppers.
Splitit's survey also found that over 45% of millennial shoppers would be more likely to buy large electronics if offered an installment payment option, and that 20% of those under the age of 25 would be more likely to purchase clothing or shoes if installment payments were an option. Together, these findings highlight the unique potential for retailers to attract younger customers by making products more affordable and payment structures more flexible via alternative payment options.
The survey, conducted in October 2018, 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-free monthly payments, without the need for additional registrations or applications. Splitit enables online retailers 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 expands to 1,000 merchants in 30 countries and has been patent protected in the United States since 2012. Headquartered in New York, Splitit has an R&D center in Israel and an office in London.