How online fashion stores benefit from post-payment services with AfterPay and Buckaroo
Online shopping is developing strongly: 48 percent of Dutch online shoppers desires to pay after receiving their purchase, so concludes an internal research by AfterPay. This means that post-payment methods play an important role in the payment experience of consumers. The collaboration between post-payment method AfterPay and payment service provider Buckaroo is aimed at making the payment process run smoothly.
Pay-after-delivery makes us feel safe and enlarges our trust in the online store at which we place an order. Especially in the case of online fashion stores, post-payment methods come close to the experience of shopping in a physical store, so says Walter Drieënhuizen, Partner Manager Benelux at AfterPay. “Clothing and shoes are products of which we are used to see, feel and fit prior to purchasing it. Only when we are satisfied, we purchase. This is also the case with pay-after-delivery, first we want to see the products, then we pay.”
"Clothing and shoes are products of which we are used to see, feel and fit prior to purchasing it. Only when we are satisfied, we purchase. This is also the case with pay-after-delivery, first we want to see the products, then we pay."
— Walter Drieënhuizen, Partner Manager Benelux at AfterPay
Signal of trust
Due to the corona crisis, many consumers are shopping online for the first time or are shopping more often online. Maurits Dekker, CCO of Buckaroo, notes that many consumers prefer to pay afterwards when it is the first time shopping at an online store. “When your online store provides post-payment methods, you send a signal of trust and you increase customer loyalty. Some returning customers will continue to use post-payment methods since it is so easy to use. Others choose prepaid payment methods for follow-up purchases once they become familiar with the online store.” Beneficial of paying afterwards is that it is such a fast payment method. As a result, there are fewer chances of losing customers in the payment process. This causes the overall order value to go up.
Higher conversion rate
As joint partners, AfterPay and Buckaroo serve between 250 and 300 active (fashion) merchants, including Decathlon, Guts & Gusto, Loavies, My Jewellery, Ter Stal and Jeans Centre. These merchants noticed that offering post-payment methods led to increasing conversion rates. AfterPay ensures the highest possible acceptance rate. Drieënhuizen: “We currently have over six million active users in the Netherlands. We collected a lot of data about paying habits to quickly classify customers based on their payment behavior. This allows many online store starters to gain direct access to data about AfterPay users.”
More service and more convenience
High return percentages are challenging for online fashion stores. Over forty percent of the purchased items are being returned. The Netherlands is ahead of Europe when it comes to returns, especially fashion items are getting returned a lot. “We provide a less cumbersome refund system that enables refunds to be processed in one click”, so says Dekker. Buckaroo also provides a link with any gift card, such as Fashioncheque, in the checkout process. For example, it is possible for consumers to make a deposit by using a gift card and pay the remaining amount with another payment method.
"We provide a less cumbersome refund system that enables refunds to be processed in one click."
— Maurits Dekker, CCO of Buckaroo
To combat online store fraud, AfterPay and Buckaroo perform fraud checks. Besides this, consumers must always sign when they receive a package. “We do everything we can to prevent identity fraud. To protect the online retailer and the consumer, the risk is for us in all cases,” says Drieënhuizen. All in all, there are quite a few points of attention for online fashion stores to address in order to ensure that the payment strategy is successful. The collaboration between AfterPay and Buckaroo is aimed at making this process run smoothly. “By joining forces, we are able to advice fashion merchants based on our expertise.”
Rewarding customer loyalty
Online fashion brand Loavies is an example of a success story. This online store quickly releases its own collections and focuses on advertisements on social platforms. “This causes a huge peak in transactions, with many visitors in the online store at the same time. Dekker: “Our services fit in well with this. Being the consumer in this case, you want to quickly find out what items are added to the collection and be able to order easily.” Dekker says post-payment methods are a manner to reward customer loyalty. Customers are given more time and space. “It is in fact a Hockey Stick Effect: a growth curve based on payment behavior.”
"It is in fact a Hockey Stick Effect: a growth curve based on payment behavior."
— Maurits Dekker, CCO of Buckaroo
Drieënhuizen and Dekker are convinced that a positive approach to the payment process ensure that consumers have positive feelings about an online store. “As partners, we are currently active in nine countries. In the coming years, we want to tap into more markets to serve our merchants even better. Our focus is specifically on expanding those marketing activities that our customers likely use. Although you mainly think of physical products when paying afterwards, we also investigate other market segments, such as online ticketing. We have a roadmap to expand our joint services with more post-payment services coming. In this way we are in continuous development to improve the customer journey.”
This article was published on Fashion United on the 31th of May. Photocredits NordWood Themes from Unsplash.