Gen Y Shoppers Drawn to Retailers That Offer Financing Options
According to a recent study, 59% of Gen Y shoppers (adults aged 18-34) say they prefer to shop with retailers that offer financing options.
Researchers estimate this generation of shoppers has a $200 billion annual spending power, which makes earning their business all the more important.
The study also revealed that Gen Y buyers are more aware of their financing options than members of other generations. 32% of Gen Y shoppers knew about second-look financing, compared to only 13% of consumers over the age of 55. 56% of Gen Y shoppers said financing options impact where they make their purchases, compared to 36% of the older consumers.
As you may expect, Gen Y consumers are more likely to use financing for a wider range of products and services. All generations were open to using financing for furniture and appliances, but 38% of Gen Y respondents said they would also use financing for electronics, compared to 27% of all shoppers. The same applied for jewelry: 21% compared to 11%.
“Up to 50% of primary credit applications are routinely declined, which can lead to lost sales for many retailers. Secondary financing options can help consumers, especially Gen Y consumers, buy what they want, when they need it,” said Suneet Paul, co-founder and CEO of NewComLink, the company that commissioned the study. “As a result, retailers who offer financing choices see increases in customer loyalty as well as revenue.”