Searching for customer loyalty? All you need is love.
While it may sound overly simplistic, Afterpay, an Australia-based digital payments provider, positions its services as a way to deliver a frictionless transaction experience—enabling brands to put their best foot forward in what will ideally be a long, loyal relationship.
Consumers shopping at retailers using Afterpay can split their basket payments into four biweekly payments; however, unlike a legacy layaway system, they receive their items immediately. Afterpay reimburses retailers in full and then collects the remaining payments from the consumers.
It’s a service that’s proving to be popular with millennial consumers, especially in fashion. The company processes 1 in 4 online fashion transactions in Australia, Nick Molnar, Afterpay CEO and founder, told Sourcing Journal, while it was used by a million customers in the U.S. within the first 10 months of going live. The company counts 3,000 retail brands among its partners that are either currently live or readying to be live, with such global names at Urban Outfitters Inc. and Kylie Cosmetics on its roster.
Millennial customers are particularly taken with the service, appreciating the marriage of instant gratification and sensible budgeting. According to Molnar, there are twice as many debit card transactions in the U.S. as there are credit card transactions.
“Millennials are conscious of how they want to live,” said Molnar. “There’s an interesting dichotomy happening. On one side, they love these price-conscious basic brands, and you’re seeing a lot of them grow. But then on the other side, they want to make that one investment purchase—that might be a piece of jewelry, that might be sunglasses, that might be their bag. They’re budgeting and saving for them. It’s the old-fashioned way.”
In addition to driving sales, the flexible payment integration can also increase conversion rates and reduce returns. “Our customers have less buyer’s remorse,” he noted. “They’ve outlaid less money at the start, and they return less.”
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Beyond offering seamless payment experiences, legacy retailers seeking “quick wins” with millennial consumers in this challenging environment may be surprised by just how easy they can be. Loyalty doesn’t have to include extreme gestures, Molnar insists. It can be achieved with simple, unexpected delights if companies go the extra mile.
“The fulfillment discussion is core,” he said, adding retailers should take a page from Amazon here. “Something as simple as telling people when a product is going to be delivered. Give them the date. There’s technology that enables [retailers] to a high degree of confidence to tell a customer exactly when it will arrive at their house. These things don’t have to involve huge technology lifts. Go back to basics.”
This type of communication also helps build trust, which in turn can be repaid with customer loyalty—creating a truly personalized 1:1 relationship.
“Anyone can drive volume but how do you build love for your brand? That’s very difficult to do,” said Molnar. “Trust creates this emotional love relationship. Just one little surprising delight going over and above goes a long way.”
Hear more from Molnar about how to capture millennials’ attention in our “Adapting to the Millennial Economy” video here.