According to a survey commissioned by installment payment solution Splitit, nearly 70 percent of consumers plan to spend over $100 online this holiday season and 30 percent plan to spend over $500 online—but most troubling for retailers is that 40 percent of shoppers plan to do the bulk of their holiday shopping this season through large online retailers like Amazon.
“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, in a news release. “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 percent of shoppers plan to do most of their holiday shopping this year through e-tailers like Amazon, according to the findings, presenting a unique challenge for competing online merchants. Surprisingly, smaller neighborhood stores were the second most popular option, with 25 percent of consumers preferring to do their shopping locally.
The survey revealed that retailers can draw consumers to their sites and away from industry behemoths like Amazon using a variety of incentives: 50 percent 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 percent of consumers said that free shipping would encourage them to spend more money.
Alternative payment options are another powerful incentive for merchants to consider. The research found that 67 percent 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 percent 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
Nearly 40 percent 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.
The survey also found that over 45 percent of millennial shoppers would be more likely to buy large electronics if offered an installment payment option, and that 20 percent 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+.