Buying Big-Ticket Purchases Through Digital Channels
The deployment of digital shopping platforms is pacing with ‘buy now, pay later’ (BNPL) growth as more consumers adopt the convenience and speed of eCommerce. It’s perhaps inescapable that these two forces shape pandemic-era commerce towards the lower-ticket purchases that kickstarted the trend to more expensive merchandise. The researchers observed this trend in two studies revealing that consumers and merchants are using digital shopping and BNPL almost in unison, accompanied by massive numbers using the combination to push into the higher-ticket territory.
The Next BNPL Horizon Report found that 43 percent of U.S. adults, roughly 111 million consumers, opt to use BNPL to fund things from home remodelling to medical treatment. However, analysis displays that consumers often shop for high-value goods and services via online channels but complete those purchases offline by legacy means.
Consumers Shop And Pay For Big-Ticket Purchases
Consumers still favour handling big-ticket spending the old-fashioned way. The reporters stated that shoppers conducted prepayment interactions offline for 75 percent of transactions and paid offline for 73 percent of them last year. In comparison, they performed digital prepayment interactions in some cases and simultaneously 27 percent in digital payment. However, the trend pointed to higher-ticket purchases by digital means becoming more common. Unfortunately, barriers exist and revolve around consumer trust and familiarity with new methods.
Also, it was found that third-party review sites prompted many consumer engagements, identified the gap in the payments domain. Likewise, Forty percent of real estate purchased last year involved prepayment interactions on third-party review sites. In addition, 3.5% of such transactions were paid for digitally. Consumers expect to make a big-ticket purchase within the next 12 months considers using digital platforms to do so 91% of the time.
Driving Change In Big-Ticket Purchases
Automotive is taking an early lead among other categories where consumers make costly purchases mainly through digital channels. In August, the revenues rose nearly 200 percent in the 2021 year. Simultaneously, the offline-digital divide varies by product and service. But only automobile purchases tended to involve digital engagement more often than offline engagement.
55% of millennials who are interested in buying big-ticket items on digital platforms
Spending Power Boost Is Key
As the pandemic digital evolutes towards 2022, consumers are acclimating to digital channels and payment options. Therefore, stepping into bigger ticket purchases looks more like an inevitability as the shift matures into a new set of consumer behaviours. Many BNPL users see it as a viable option for nurturing their spending power. Twenty-eight percent of BNPL users responded that they did not have afforded products and services they purchased without the payment flexibility that BNPL has provided them.
The study found that a typical BNPL spends $961 on a single BNPL purchase. The average bridge millennial BNPL will spend $1,203, while the average Gen X BNPL will spend $1,006 on a single BNPL-enabled purchase. Third-party BNPL had observed and are responding to the bigger-ticket trend by increasing spend limits in a few cases.
Conclusion
Payments for big-ticket purchases still skew toward offline methods despite the availability of digital payments. According to the study, “Consumers pick offline channels more strongly when it comes time to pay for big-ticket products and services. This is anticipated because many significant transactions traditionally include signing paper contracts and settling bills in person.
Third-party review sites offer robust integrated payment options. In addition, the engagement-payment gap is influenced in special cases by the quality of the incidents consumers have with these channels. The small share of consumers who conduct prepayment interactions and pay through third-party review sites have broadly positive outcomes.
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