As an eCommerce store, it’s easy to get lost in e-commerce numbers. The sheer amount of potential indicators to track and measure can be intimidating. However, not all actions are equally relevant, and defining the key performance indicators (KPIs) you need to monitor will help you optimize the success of your online store. As the name implies, buy now, pay later (BNPL) allows shoppers to purchase without paying cash at the moment of purchase. It’s no surprise that BNPL is the next big payment trend in the online retail market, with the possibility to promote impulse buys and drive additional eCommerce sales.
BNPL Interest-free BNPL installments and other payment solutions are available from companies like PayBright and Affirm, making it much easier for Millennials. Gen Z consumers divide up the purchase expense into smaller, more manageable chunks that better meet their budgetary demands. It’s a viable alternative to credit cards and can help you build client trust. BNPL is increasingly appealing to these viewers, whose finances may not be as flexible as those before them.
Sales conversion rate
Simply said, your conversion rate is the percentage of visitors who make a transaction. This is the measure you’ll be most concerned with, which is why it’s at the top of the list. Most analytics programs will tell you the conversion rate. Still, you can calculate it manually by dividing the total number of visitors by the number of individuals who purchased a product. Technically, your site has numerous micro-conversions that lead to a macro-conversion (the purchase). A shopper clicking on a product on a category page, for example, is a micro-conversion since it leads to a sale.
Reduce rates of your cart abandonment.
Buyer’s remorse Shock to the system. There are various reasons why carts in your e-commerce business are abandoned at checkout, but BNPL services have become an essential component in boosting checkout completion. Thousands of Canadian companies, like Hudson’s Bay, SAIL, and Endy, have recognized this trend and have begun offering installment payments at checkout, allowing customers to complete their purchases, large or little, thereby increasing conversion rates and decreasing cart abandonment.
Improve your consumer loyalty.
Offering BNPL services may attract new clients who haven’t yet discovered your store. You may conceive of installment payments as analogous to special promotions or other incentives in this way. The truth is that a segment of your consumers will only do business with you if you provide these services, which will help you
a) close the transaction,
b) develop or improve your customer connection, and
c) position your store as their go-to source for their needs.
Increase the value of your transaction.
More sales equal more money, which is a primary indicator for any firm to track. Simply said, BNPL services can help shoppers increase the number of things they buy per order. This will not only help you improve your customer’s basket buy size, but it will also provide them a more pleasant shopping experience, which will increase your merchant’s transaction value.
Thinking of starting your own eCommerce site? It will need 3 crucial elements: a feature to export orders, advanced shipping rules, and a direct checkout. If you forget even one, the site’s success might be in danger.
Reduce the cost of acquiring new customers.
Your client acquisition costs will inevitably decrease as BNPL services drive more page views and sales to your website. In addition, the price you pay for online search ads and marketing will drop. You won’t need to spend as much time and money on paid amplification if you eventually convert more people into consumers – your brand will speak for itself organically.
Customer Lifetime Value
Client Lifetime Value (CLV) refers to the total amount of money spent by a customer in your firm throughout their lifetime. Naturally, the higher someone’s CLV is, the more frequently they buy and the larger their purchases are during those visits. We’ve already demonstrated that buy now, pay later can help you increase AOV, and a well-executed BNPL program can also help you increase purchase frequency.
Rate of Conversion
The conversion rate of your eCommerce site refers to the percentage of visitors who become paying clients. As a merchant, you must ensure that clients can convert or make a purchase on your website clearly and straightforwardly. They should also be able to comprehend their payment alternatives and savings potential immediately. Noémie is an excellent example of a well-designed end-to-end checkout process. They provide a helpful pop-up on their product sites that offers 0% financing based on cart size, shopping history, and other factors. 71.5 percent of their consumers who completed the checkout process were prequalified from the product page.
These small changes immediately alert customers to cost-effective solutions, successfully moving them down the sales funnel. This holds for all of your sales and marketing platforms, including the web, email, social media, and others. Emails with a customized financing offer resulted in a 3x increase in email conversion rates for the RTA Store, resulting in a 155 percent increase in revenue. Offering BNPL choices upfront is a conversion booster.
Order value on average
CLV brings us to this eCommerce metric. It’s the most cost-effective way to get new traffic. After all, it means more revenue at a lower cost, less acquisition, and transactional expenses. Because it reveals how enraged people are about your stuff. We all want to be the store with everything a consumer could ever want and receive orders for $1000 at a time. Of course, it also relies on the things you’re selling. In general, though, it’s critical to track average cart value across various acquisition channels and geo regions, as well as products that typically increase order value.
It’s not unexpected that payment methods are included in this as the world of eCommerce continues to develop and change. For years, digital wallets have been on the increase, but the trend hasn’t stopped there; today, more customers than ever choose to buy now and pay later. While BNPL principles aren’t technically new, credit cards and layaway have long been acceptable purchase alternatives for online and offline purchases, the current iteration is relatively new. Customers on the fence about a purchase can find the motivation they need to click “Buy” with the temptation of low installments, which work similarly to short-term loans with flexible payback choices.