Harnessing Retail Finance Technology to Capitalise on the E-commerce Boom

  • Mike Dawson, CEO at Deko

  • 29.06.2021 10:15 am
  • #post-pandemic #finance #technology

With lockdown restrictions gradually easing and the vaccine roll-out in the UK proceeding at incredible speed, the outlook for retailers and merchants is far more positive than this time last year. But what merchants now need to focus on is how to gain as many customers as possible and maximise their turnover in what remains a crucial time. 

A key enabler of this is set to be retail finance – but does the technology and ecosystem of lenders exist to allow merchants to truly capitalise on the opening of the economy? 

Time to capitalise

Retail finance, buy-now-pay-later; these terms are now synonymous with almost everyone as their popularity has exploded over recent years, with 4 in 10 Brits saying they have used a buy-now-pay-later service. 

As well as to consumers, the benefits to merchants are clear too, as by partnering with a retail finance provider, you are increasing the breadth of your customer pool and enabling your existing customers to purchase more. 

So as retail finance services continue to grow – and are expected to double by 2023 - merchants are increasingly identifying them as essential in appealing to as large a pool of customers as possible. However, many of the products that exist on the market may not be suitable for every merchant or customer. 

An alternative to the norm 

While these services offer countless benefits, current providers tend to focus on a sole ‘hero product’, which may not be suitable for every merchant, customer or sector. 

Many providers of retail finance manage to tailor credit appetites, meaning not everyone will be accepted. Whilst this is often a needed and responsible strategy, it can result in merchants losing out on customers and subsequent revenue. This can be the issue with sole-lender providers: if a customer is not approved for financing, then the customer is left without the product, and that merchant has lost out on that sale - a lose-lose for both. 

This is where multi-lender platforms can capitalise. When employing a multi-lender retail finance system, the technology provider will look to multiple different lenders to ensure the best match between merchants and lenders, which in turn maximises the approval opportunities benefitting both the merchant and the end-customer. 

Securing the right service

It is of course impossible to pigeonhole all merchants into the same lending product. Every merchant is unique and requires its own unique service. Retail finance can undoubtedly improve merchant revenue, but it needs to be responsive enough to different needs of merchants and consumers alike so as to benefit the greatest number. 

Today, merchants are reliant upon multiple different providers to get the right product or sector coverage, which is not optimal. The key, therefore, is partnering with a multi lender provider who has access to multiple lenders and can invest more time in understanding the best match between a merchant and their needs. You wouldn’t trust a doctor who just gave you a prescription without first examining and asking you what you felt your health needs were. The same sort of principle should apply when it comes to the relationship between merchants and retail finance providers – it requires trust, built on listening and understanding.

Merchants have suffered over the past 14 months, and it is time for them to bounce back. But as the old saying goes, there is strength in numbers. In this case, it means merchants and consumers getting access to the right partners and the widest pool of retail finance lenders, catering for all customers and basket sizes. 

That, in turn, will drive up some of the numbers that matter most – sales and bottom line.


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