You would be hard-pressed to find eCommerce sites selling consumer electronics, auto parts, furniture, appliances, fitness equipment, etc. that do not have a point-of-sale consumer financing payment option. There are multiple, very well-funded companies in the space, and all of them have data that shows they increase customer purchase conversion rates, as well as increase average order value for merchants.
This basically means that when you offer consumers the ability to pay with Affirm, Bread, Klarna, or AfterPay, more consumers will make the purchase. Increasing purchase conversion is a big deal. In 2018 alone over $4.6T in sales failed to happen because 76% of shoppers abandoned their carts and did not complete the purchase.
As we have been rolling out our API-first extended warranty and protection plan platform, one of the most common questions we get is:
Does Extend work well alongside my current point-of-sale consumer financing offer?
The answer to that question is a resounding… YES!
Extend by itself greatly benefits each merchant we work with, but in combination with point-of-sale financing Extend also increases the value of each transaction for the likes of Affirm, Bread, Klarna, and AfterPay.
Extend drives significant benefits to consumer financing companies including:
Higher average order value to finance - an extended warranty typically adds 10-15% to the shopping cart value
Greater stickiness and merchant lock-in - adding extended warranties as a capability creates another meaningful touch point between the merchant and consumer
Increased purchase conversion - the presence of an extended warranty offer gives consumers additional peace of mind and increases overall purchase conversion rates
As more and more commerce moves from brick and mortar to online, companies will continue to see an increase in service offerings that improve the customer journey by giving consumers the options they want. At Extend, our focus is on providing customers with an elegant experience that is designed around them and enhances the entire purchase flow.
The early feedback on Extend from consumers and merchants speaks for itself - merchants love the no-cost added income and the chance to provide an option that both increases conversion and builds customer loyalty by extending the relationship far beyond the sale. We are seeing a 15% attach rate on our extended warranty and protection plan offers - meaning that out of 100 purchases, 15 of those customers choose to add a protection plan from Extend. This is far above the industry average attach rate of just 5-6% for online protection plans sales.
Merchants are always looking to increase revenue and create great customer experiences, but often need to be able to do so without investing significant time or money. Easy integrations with services like Extend or point-of-sale financing options have proven to be some of the most effective offerings out there. Put them together? eCommerce perfection!
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