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Credit: Retailers offer financing tips to entice larger purchases

January 30/February 6, 2017: Volume 31, Number 17

Screen Shot 2017-02-03 at 4.20.56 PMFor dealers like Mark Hayden, Carpet One Floor & Home, broaching the subject of credit and financing options frequently throughout the sales process is key to persuading the consumer to make a larger purchase than she initially planned. “Bring it up at the origin of the discussion when you start working with your customers, and bring it up another time during your conversation,” he explained. “Sometimes telling something to someone a few times will make it better understood and remembered in their minds.”

Evan Blanchfield, Campbell’s Carpet in Port Washington, N.Y., employs a similar strategy. “Let the customer know [credit] is available early on because then you can probably get a bigger purchase if something is out of her budget,” he said. “If your consumers know financing options are available from the start they know it’s within their reach.”

Some dealers look to influence the customer long before she enters the store. Carpetime in Grand Junction, Colo., for example, utilizes the web to educate shoppers about credit terms. “It’s worth mentioning [online] you offer financing that determines whether they come into the store or not. We like to let customers know it is available if that’s what they want and it’s one of the main things they are looking for.”

Jim Jensen, owner of Carpet Mill Outlet Flooring Stores, Denver, cites the importance of promoting credit opportunities through a variety of media. “We have found success with web and social promotions along with salespeople and POP materials. When you add mentions in the mass media like broadcast TV, cable and radio, we find the blanket coverage of all available media is the most effective approach.”

These are just some of the ways specialty retailers are successfully promoting credit in their stores. While the specific strategies might vary slightly from store to store, the common denominator is the sheer availability and access to retail financing options. From credit programs negotiated directly with banks and financial institutions to those offered in conjunction with manufacturers, there is no shortage of choices for specialty dealers.

Communicating this availability of financing consistently across all marketing channels is key to building greater awareness among flooring shoppers, experts say. This includes using promotional vehicles that fall outside of traditional mediums. “Using Facebook, websites, radio, mailers, banners, TV and newspaper advertising to promote our branding shows our customers we are consistent with our ability to finance effectively,” Tom Garvey, president and CEO of Lewisburg, Pa.-based Garvey’s Flooring America, told FCNews. He estimates approximately 30% of sales are generated from purchases financed over a 12-to-24-month time frame.

Consumer research supports the relationship between active promotional credit initiatives and big-ticket purchases achieved via financing. For instance, the findings of a recent survey conducted by Synchrony Financial—which offers credit programs for retailers and consumers alike—show 65% of respondents in the flooring category “always” seek promotional financing options when making a major purchase, while 72% indicated promotional financing makes large purchases more affordable.

Despite these numbers, experts say there is room for improvement. That same study revealed 32% of flooring shoppers who are not Synchrony Bank cardholders reported awareness of financing options compared to 58% last year. According to Glenn Marino, Synchrony executive vice president and CEO, payment solutions, this means retailers need to do better at integrating credit information across multiple channels.

The good news for retailers is consumers are indeed actively seeking ways to finance their flooring purchases. According to Synchrony Financial, roughly two-thirds of flooring shoppers conduct research through search engines, the retailer’s website and manufacturer sites. Another 34% also leverage third-party online review sites. “Integrated campaigns across email communication and retail site advertising also reinforce dealer participation and broader brand messages to help build incremental awareness among consumers,” Marino explained.