5 benefits of offering finance on furniture
Thursday 8th June 2023
Served by nearly 10,000 furniture and household retail stores, UK households purchase over 24 billion pounds worth of furniture and furnishings each year. It’s a thriving yet competitive sector and furniture retailers are rightly looking to stay one step ahead. One way to do this is to offer furniture financing options to customers.
In this article, we explain the finance options customers really want to see at the checkout, and the benefits offering finance could have for your business.
The best finance solutions for furniture retailers
Most furniture retailers choose to offer interest free finance.
That’s because customers buying big-ticket items such as sofas or beds expect to be offered a more flexible way to pay. Interest free finance allows customers to spread the cost of their purchase over a set period of time (usually from six months to three years) without incurring any interest.
With so many competitors offering interest free credit, it’s becoming an essential finance option to offer. While your business will need to pay a subsidy to your chosen finance provider in return for offering customers 0% finance, it’s likely you’ll reap much greater rewards as a result of offering a more convenient way to pay.
Interest free finance gives customers the flexibility they expect when committing to a big purchase. Retailers can allow customers to choose their term, when they want their payments to start, what deposit to pay, and even give them the option to pay off their outstanding balance early.
Our other guides explain the difference between interest free, interest bearing and buy now pay later finance, but interest free finance is undoubtedly the most popular option for furniture retailers.
Benefits of offering finance
- Boost your sales
The option to pay using interest free finance is a huge selling point. It allows customers to spread the cost of their purchase, which can give them access to a big-ticket item that they might not otherwise be able to afford. Customers can get that instant gratification by ordering the item they want now – without waiting for their savings to grow.
There’s no reason for customers not to take interest free finance, really, as customers won’t pay a penny more than they would if they’d paid in cash. It just gives them extra breathing room and an opportunity to spread the cost.
- Increase your average basket price
As the customer will be spreading the cost rather than having to find hundreds or even thousands of pounds upfront, they may feel more comfortable upgrading their purchase or adding an extra item to their order.
Our max loan feature tells you if the customer is eligible to take out more finance, too. This gives your sales team an ideal upsell opportunity, as customers can automatically access additional finance without needing to reapply.
- Reach new customers
Stop customers shopping around by giving them everything they’re looking for. Offering 0% finance can be a valuable marketing tool, driving footfall in-store and traffic online. Once you already have a new customer’s attention, 0% finance then gives your sales team a better opportunity to close the sale.
- … and connect with existing ones too
Offering finance also strengthens brand loyalty with existing customers, too, giving them yet another reason to return to you when they’re shopping for a new piece of furniture.
When you work with a retail finance provider like us, you can rest assured your customers will be treated to outstanding service from start to finish. Good experiences stay at the forefront of a customer’s mind when making another purchasing decision, putting you in a great position to retain customers.
- Avoid abandoned baskets
We’ve all heard customers tell us they’ll “think about it and come back later” – and this applies online too. Accelerate purchasing decisions by making sure your customers can pay for their new piece of furniture with finance. Instead of having to part with a large sum of money upfront, customers will be able to split the cost into more manageable monthly payments instead. Stop your customers from abandoning a potential sale by offering them a more enticing way to pay.
Our unique loan tailoring options also persuades customers not to abandon the sale. For example, let’s imagine a customer has been declined for a loan, but if they lowered the loan amount or paid over a longer timeframe they would be accepted. We’ll tell you upfront if this is the case, so you can adjust the terms of the loan (and turn a decline into that all-important accept) without your customer needing to reapply.
Working with a reputable furniture finance company
So now you know some of the reasons your furniture company ought to be offering retail finance. Now let’s look more specifically at why Novuna Consumer Finance could be the ideal partner.
Here are just some of the reasons furniture retailers like you choose to work with us:
- Quick and convenient application form
Our application form is designed to be simple. All customers need to do is answer just a few questions either in-store or online.
With a soft search feature, instant decisioning and tailoring options, our unique application process provides a seamless user experience for your customers.
- No risk to your business
When you offer retail finance through a reputable lender like Novuna Consumer Finance, there’s no risk to your business. We’ll take on the credit risk and the responsibility of handling repayments.
We also ensure that credit searches and robust affordability checks are in place, to make sure finance is only offered to suitable customers.
- Reputation and trust
Formerly Hitachi Consumer Finance, we have over 40 years of experience in the market. In February 2022 we rebranded to Novuna Consumer Finance, and our retailers are already benefitting from working with part of one of the world’s largest financial groups.
Large TV and media campaigns for Novuna have generated the same instinctive trust customers have with our recognisable brand, increasing the likelihood of customers noticing and applying for our finance products.
- Exceptional customer service
Furniture retailers are known for delivering high levels of customer service. So the brands they partner with must display similar levels of care and consideration. Working with a retail finance provider that delivers five-star customer service provides peace of mind that your customers are in safe hands.
Don’t forget the impact good service will have on your internal teams, too. Our dedicated relationship managers will help you get set up and running in no time and will help you harness the benefits of our retail finance offering at every stage. This people-centric approach makes us a great team to work with.
Talk to us about offering furniture finance
Whether you’re new to offering retail finance or you’re thinking about switching providers, our team are here to help.
