For millions of consumers, having a limited or damaged credit history means that traditional credit channels are inaccessible and therefore they cannot purchase durable goods at a higher price. But alternative payment options such as buy now, pay later (BNPL) are gaining ground and can make these purchases more affordable.
The report “Finding Retail’s Invisibles: Leverage Flexible Digital Payments to Reach Underserved Durable Goods Customers”, produced in partnership between Katapult and PYMNTS, interviewed 2,122 respondents to determine how consumers deepened their relationships with merchants when they offered them a range of payment options.
See also: Option-to-buy lease options can help durable goods dealers reach 79 million unseen in retail
Among the results: Up to 75% of US consumers have purchased durable goods in the past year. About 40% of these purchases were for household appliances; almost 38% concerned home furnishings.
But by purchasing these products, consumers – especially younger ones, such as millennials and bridge millennials – have embraced capital lease options. About a quarter of those who purchased household appliances took the option of leasing or other types of financing; a slightly lower percentage did so with furnishings.
An overwhelming majority of consumers reported using these options in part because of their ability to manage their expenses and meet their immediate need for items.
The study found that 43% of former rent-to-buy program users see the option as an incentive to make purchases from a particular merchant. Almost 22% of all respondents said their willingness to shop is highest among merchants who offer option-to-buy rental programs. That percentage rises to 35% for millennials, who say that option-to-buy leasing options encourage them to shop from a particular merchant.