Offer finance for luxury bed and mattress retailers

Offer Finance for Luxury Bed and Mattress Retailers

In today’s competitive market, luxury bed and mattress retailers face the challenge of catering to a discerning clientele that values both quality and affordability. For many customers, the purchase of a high-end bed or mattress represents a significant investment. Offering finance options can help retailers meet the needs of their customers by making luxury products more accessible. In this article, we’ll explore the benefits of offering finance for luxury bed and mattress retailers, the different types of finance options available, and how partnering with a retail finance broker like Kandoo can help streamline the process.

Why Offer Finance for Luxury Beds and Mattresses?

Luxury beds and mattresses are often associated with premium pricing due to the quality of materials, craftsmanship, and advanced technology used in their production. While many customers desire these products, the upfront cost can sometimes be a barrier to purchase. Offering finance options allows customers to spread the cost of their purchase over time, making it easier for them to afford the comfort and quality they seek.

Increased Sales and Customer Base

One of the primary benefits of offering finance is the potential to increase sales. By providing customers with flexible payment options, retailers can attract a broader customer base, including those who may not have the funds available to make a full payment upfront. Finance options can remove the obstacle of price, allowing customers to make decisions based on the quality of the product rather than their immediate financial situation.

Higher Average Order Value (AOV)

Customers who are given the option to spread payments over time are more likely to choose higher-end products. In fact, offering finance can lead to a higher average order value (AOV) as customers may feel more comfortable selecting premium models or additional accessories, knowing they can pay for them over several months or even years. This is especially important for luxury bed and mattress retailers, where the difference in price between mid-range and top-tier products can be substantial.

Improved Customer Loyalty and Satisfaction

Offering finance can also enhance customer loyalty and satisfaction. By making it easier for customers to afford the products they want, retailers can improve the overall shopping experience. Customers appreciate the flexibility and convenience of finance options, which can lead to repeat business and positive word-of-mouth referrals. A satisfied customer is more likely to return in the future, whether for a mattress upgrade, bed accessories, or other related purchases.

Competitive Advantage

In a crowded marketplace, offering finance can set luxury bed and mattress retailers apart from competitors. Customers are increasingly seeking out retailers that provide flexible payment solutions, and those that do not offer finance may lose potential sales to competitors who do. By integrating finance options into their business model, retailers can stay ahead of the curve and appeal to a larger audience.

Types of Finance Options Available

There are several different types of finance options that retailers can offer to their customers. Each has its own advantages and can cater to different customer needs. Here are the most common finance solutions for luxury bed and mattress retailers:

1. Interest-Free Credit (0% APR)

Interest-free credit is one of the most popular finance options available. With this option, customers can spread the cost of their purchase over a set period, typically between 6 and 24 months, without incurring any interest charges. This is an attractive option for customers as it allows them to pay for their luxury bed or mattress in instalments without any additional cost.

Retailers benefit from interest-free credit by attracting customers who may not have been able to afford a lump-sum payment upfront. Additionally, offering interest-free finance can be a key selling point, especially for high-ticket items like luxury beds and mattresses.

2. Buy Now, Pay Later (BNPL)

The "Buy Now, Pay Later" model allows customers to take home their purchase immediately and defer payment for a set period, usually between 3 and 12 months. After the deferral period, customers can either pay the full balance or choose to spread payments over a longer term, often with interest.

BNPL options are particularly appealing to customers who may need time to budget for their purchase but still want the product right away. For retailers, BNPL can help secure sales that might otherwise be delayed or lost.

3. Low-Interest Finance

Low-interest finance is another option for customers who are willing to pay some interest in exchange for spreading the cost over a longer period. This option is typically available for terms ranging from 12 to 60 months. Although customers will pay interest, the lower monthly payments can make luxury products more affordable and accessible.

Retailers offering low-interest finance can cater to customers who are comfortable with longer-term commitments, and it can be an excellent way to increase sales of higher-priced items.

4. Personal Loans

Some customers may prefer to take out a personal loan to finance their purchase. Personal loans are typically offered by third-party finance providers and allow customers to borrow a lump sum to cover the cost of their purchase. Customers then repay the loan in fixed monthly instalments over a set period.

While personal loans may not be as common as other finance options in the retail space, they can still be a valuable offering for customers who want more control over their repayment terms.

How Retailers Can Implement Finance Options

Implementing finance options can be a straightforward process with the right partner. Retailers can either offer in-house financing, where they manage the credit agreements themselves, or partner with a third-party finance provider. Most luxury bed and mattress retailers opt to work with a finance broker, as this allows them to offer a range of finance options without taking on the risk and administrative burden of managing credit agreements.

Partnering with a Retail Finance Broker

One of the easiest ways to offer finance is by partnering with a retail finance broker. A broker acts as an intermediary between the retailer and finance providers, helping to match customers with the best finance option for their needs. This can be particularly beneficial for luxury bed and mattress retailers, as brokers have access to a wide range of finance products and can help streamline the entire process.

Kandoo: A Trusted Retail Finance Broker

When it comes to partnering with a retail finance broker, Kandoo is a trusted name in the UK. Kandoo specialises in providing retail finance solutions to businesses across a variety of sectors, including luxury bed and mattress retailers. By working with Kandoo, retailers can offer their customers a range of flexible finance options, including interest-free credit, buy now pay later, and low-interest finance.

Benefits of Partnering with Kandoo

Kandoo offers several advantages for luxury bed and mattress retailers looking to implement finance options:

1. Access to Multiple Lenders: Kandoo works with a panel of reputable lenders, ensuring that customers have access to a variety of finance options that suit their individual needs and financial circumstances.

2. Quick and Easy Application Process: Kandoo’s platform allows customers to apply for finance online in just a few minutes, with instant decisions in most cases. This seamless experience makes it easier for customers to complete their purchase without delays.

3. No Hidden Fees: Kandoo is transparent about the costs associated with its finance options, ensuring that customers are fully informed about their repayment terms. This builds trust and confidence in the retailer’s finance offerings.

4. Increased Conversion Rates: By offering a range of finance options through Kandoo, retailers can increase their conversion rates by removing the barrier of upfront payment. Customers are more likely to complete their purchase when they have flexible payment options available.

5. Support for All Credit Profiles: Kandoo works with lenders that cater to a wide range of credit profiles, meaning that even customers with less-than-perfect credit histories can find a finance option that works for them. This inclusivity helps retailers serve a broader customer base.

How to Get Started with Kandoo

Getting started with Kandoo is a simple process. Retailers can sign up online and start offering finance options to their customers within a short period of time. Kandoo provides all the necessary tools and support to integrate finance into the retailer’s existing sales process, whether in-store or online.

Once the partnership is established, Kandoo handles the entire finance process, from customer application to lender approval, allowing retailers to focus on what they do best—selling high-quality luxury beds and mattresses.

Conclusion

Offering finance options is a smart strategy for luxury bed and mattress retailers looking to increase sales, improve customer satisfaction, and gain a competitive edge. By making high-end products more accessible to a broader audience, finance options can help retailers grow their business and build lasting relationships with customers.

Partnering with a retail finance broker like Kandoo makes it easy for retailers to offer a range of finance solutions, from interest-free credit to low-interest finance and buy now, pay later options. With Kandoo’s expertise and support, luxury bed and mattress retailers can provide their customers with the flexibility they need to make informed purchasing decisions—without compromising on quality or comfort.