Many ecommerce players are only dimly aware of the differences between white-label BNPLs and their branded competitors.
As explained in more detail here, most BNPLs like to take two bites of the cherry by charging merchants and consumers fees, as well as harvesting commercially valuable data.
This has several downsides for merchants and their customers, the most readily apparent being a clunky buying experience. (Conventional BNPLs’ need to maximise data collection which inevitably results in a more convoluted checkout process for consumers.)
It makes intuitive sense that the more frictionless buying experience offered by a white-label BNPL would result in consumers making more purchases, but is that what happens in the real world?
Forrester, a leading global market research company, recently investigated that proposition with reference to Limepay, Australia’s leading white-label BNPL.
Here’s what Forrester discovered when it looked into what happened when one ecommerce retailer switched from a conventional BNPL to Limepay’s white-label offering.
When the ecommerce business switched to Limepay’s ultra-efficient payment process, the rate at which customers abandoned their carts dropped from 30 per cent to 21 per cent. While a 9 per cent drop might not seem overly impressive, it translated to a net benefit of $921,782 over three years.
Not only did a smoother checkout process reduce cart abandonment, it also encouraged customers to come back for more.
After switching to Limepay, the surveyed ecommerce business saw its repurchase rate jump from 1.26 to 2.31 purchase per year. This translated into “a net benefit from improved customer lifetime value of $2,055,865 over three years”.
It’s not surprising that less checkout friction would decrease cart abandonment and increase the likelihood that customers would return. But does a smoother payment process encourage customers to put more in their baskets before they reach the checkout? It appears so.
The surveyed ecommerce business saw its average order value jump from $120 to $180 after switching to Limepay. That translated into “a net revenue gain of more than $1.5 million over three years”.
It seems incredible that simply switching from a conventional, data-harvesting BNPL to a white-label alternative could have such a profound effect on a business’s bottom line.
But in a world where consumers have been conditioned to expect instant gratification, or something very close to it, making the checkout process even a few seconds faster can have an outsized impact on how frequently customers make purchases and how much they buy when they do make a purchase.
Interested in learning more about how you could generate double-digit revenue increases simply by including a white-label BNPL in 2021? Click here to get Forrester’s Total Economic Impact study of Limepay.