Brian Flesk, Head of Retail, Novuna Consumer Finance:
The festive retail season is now in full swing and this year’s surge has seen the public return to high streets earlier than usual. According to the BRC, total retail sales increased by 5.0% in November as shoppers, erring on the side of caution following stock shortage concerns and time away from high streets, took advantage of pre-Christmas discounts.
While this is the case, research has also shown that many Black Friday bargains for the home were not as advantageous as anticipated, with shoppers eagerly looking ahead to the Boxing Day sales instead to secure the best deals for big-ticket items. Furniture retailers will view the post-Christmas period with renewed optimism, as shoppers wanting to revamp their homes for the new year turn to convenient finance solutions to help fund their purchases.
Converting shoppers from browsers into buyers
However, with Omicron concerns impacting high street footfall, furniture retailers must gear up to provide a frictionless customer journey across all purchase channels both in-store and online to continue to grow their customer base.
Novuna Consumer Finance research shows that offering convenient point of sale finance solutions is now more important than ever to drive sales in a competitive market. Alongside customer service, the availability of finance at the point of sale plays a huge role in converting browsers of big-ticket items into buyers, whether instore or online. It’s one of the key drivers for customers, with 50% of those surveyed stating that it is one of the key reasons they chose to go ahead with their purchase.
Despite supply chain challenges almost doubling average delivery times, the furniture sector is buoyant. Aligned to two years of impressive furniture category growth, we’ve seen a 20% rise in like for like POS finance applications in the last 12 months and 42% of our customers have said they spend more on big ticket items because finance is available at the point of purchase.
Aligned with strong customer demand, we have observed an increase in the number of retailers integrating flexible point of sale finance solutions into the customer journey to accelerate purchasing decisions and drive sales. Furniture retailers that have taken this approach and who entice shoppers with discounts are likely to be in a strong position to benefit from the traditional trading surge as bargain hunters enjoy the post-Christmas day sales.
The importance of fraud prevention
Adding to supply chain pressures in the retail sector, fraud continues to pose a serious and very real threat to consumers and businesses, especially as the volume of transactions surge in winter months. Retail fraud increased by 50% between 2020 and 2021, and identity fraud by 11% in the first 6 months of 2021. Consumer concerns around fraud have a huge impact on suppressing online spending: 56% of those surveyed in a recent poll conducted by Sift revealed that if visiting a brand’s website had led to them becoming victims of fraud, they would choose other competitors in the future.
To enhance a frictionless journey, it is paramount that retailers invest in effective and viable fraud prevention solutions to ensure customers feel confident that their purchases for big-ticket items are legitimate and safe.
Integrated I.D verification is transforming the online finance application process, introducing the capability to assess the authenticity of documents in real-time, making identification processes as quick and efficient as possible whilst reducing potential fraud.
Novuna Consumer Finance has taken its own steps to fight fraud and further enhance the frictionless journey customers expect. We need to empower consumers to be able to spend confidently, which is why our Identity and Verification app is such an important development for our customers’ financial security.
After eclipsing all other retail categories to record the top spot for two-year growth, it’s certainly a promising time for furniture retailers who will be hoping consumer confidence continues into the start of 2022.
However, with supply chain issues impacting the availability of goods, rising costs leading to margin pressure, and the Omicron variant triggering additional shopper uncertainties, physical stores and e-commerce retailers must be geared up to convert browsers into buyers across multiple channels in a competitive market. Integrated point of sale finance solutions, combined with fraud prevention measures, are key enablers to providing a customer journey that can boost post-Christmas day sales.