Gaining Business From Near-Prime Consumers
When looking back at retail trends 20-plus years ago, it’s easy to see that the landscape has changed and continues to change. Not only are consumers spending money through different channels, they’ve also come to expect specific services when they spend their money. Financing options stand out as one of the biggest expectations, even from near-prime consumers.
According to a McKinsey & Company study, Kmart was the second highest earning retailer in 1990, pulling in $32.1 billion a year. Today, Kmart isn’t even in the top 10. Amazon.com was still four years from being founded in 1990, but by 2012, the company was in the top 10 with revenues of $34.4 billion. What can retailers do today to position themselves for getting a chance at the billions consumers spend every year?
- Go Multi-Channel
Getting a bigger share of consumer spending necessitates a different way of thinking. For instance, GE and IBM have shifted their thinking from companies focused solely on products to companies that lean heavily toward services. Retailers need to think ahead and consider how much revenue they can derive from non-product sales.
- Use Analytics to Boost Performance
Most retailers know how to capture data on their customers, but drilling down that data isn’t something that is always done effectively. However, when retailers leverage that vast amount of data, they can pull out information that leads to better connections. Audiences can be segmented and better understood, which leads to better products, services and more profits.
- Cut Costs
Support functions are being outsourced today by the most successful companies. For years many have offshored finance, IT, and HR functions. However, now they’re beginning to take the same approach to more internal functions, like merchandising and marketing analytics, which can be done more effectively and at a cheaper price than internal departments.
- Offer Financing
Financing options, such as in-store credit cards, open up an entirely new door of opportunity for companies that have avoided such methods in the past. Working with a non-traditional lender for a financing option will allow the near-prime consumers a chance to do business with you the way they want to – with low monthly payments instead of paying for their products/services all at once.
Offering financing is important today because an estimated $4,878 per consumer is spent each year on store cards and other zero-balance cards. Consumers are accustomed to carrying cards. In fact, creditcards.com says the average person carries between three and four cards. Even near-prime consumers are using their cards regularly, which is something as a retailer you need to consider.
The HELPcard can set your organization up with a financing program that your clients will appreciate. Our solutions involve prime and near-prime consumers, which means you’re going to be able to attract a wider audience than you would with traditional financing solutions. Contact us today and let’s discuss how you can pull in more business.