Here’s a trick for brands seeking to raise their holiday cart abandonment response: Offer financing.
That’s one of the conclusions Of "6 Data-Driven Lessons for Retailers From Black Friday and Cyber Monday," a study by Bread.
Bread advises brands to “incorporate financing into cart abandonment emails or offer promotional 0% financing as a friendly reminders about un-bought items in their baskets.”
Why? In general, 80.2% applied for financing prior to checkout on Black Friday. And 77.3% did so on Cyber Monday, the study reports, based on Bread’s data.
Financing offers increase average order value almost three times — specifically, 2.72x on Black Friday and 2.84x on Cyber Monday, it claims.
On Black Friday, 84.0% applied for 12-month financing terms., vs. 40.7% who wanted 24 months. Those totals rose on Cyber Monday to 88.3% for 12-month financing and 46.1% for 24 months.
However, the response depends on the age group.
GenXers and millennials generated 73.2% of revenues on Black Friday and Cyber Monday, and millennials made up 44.8% of those entering pre-financing qualifications.
Millennials are increasingly prone to seek alternative financing options.
Younger shoppers are “reluctant to rely on credit cards to finance their shopping: only 33% even own a traditional credit card, and 85% of those who do say low annual fees are a priority for them,” the study notes.
The best practice? “Educate consumers about financing options at key touchpoints on the customer journey and inform them of their purchasing power to increase order value.”
Drilling down, Generation X contributed to 38% of revenue on Black Friday, and 35.6% on Cyber Monday. Millennials generated 35.2% on Black Friday and 38.1% on Cyber Monday.
Overall, 64.5% of those who pre-qualified did so on mobile on Black Friday. Mobile pulled in 47.6% of revenue on that day.
In contrast, 57.3% pre-qualified on mobile on Cyber Monday. Bread adds that consumers want longer financing terms and lower monthly repayments. Offers with 0% interest build trust, it says.
The study also shows that 33.6% of online shopping revenues came in on Black Friday, 32.3% on Cyber Monday, 19.3% on Saturday and 14.8% on Sunday.
Time of day matters: Black Friday shopping peaked between 3 p.m. and 4 p.m., and Cyber Monday buying peaked from 2 p.m. to 3 p.m. and in the early evening
The study concludes: “Consumers expect integrated shopping and financing experiences across device and payment points including offline. Retailer should integrate consumer purchasing information across platforms to provide frictionless buying experiences.’”