Divido Deep Dive: Retail finance for white goods
Written by Marketing Team
Domestic appliances are the cornerstone of many homes in the UK (and we’re not just talking air fryers). In 2022, the UK electrical appliance market soared to a staggering £10+ billion in revenue. This thriving industry saw over 17 million large domestic appliances and an impressive 67 million small ones find new homes across the UK. In other words, white goods are big business.
The figures show that a staggering 98% of households have a fridge freezer. But with 282 out of the 412 reviewed models on Which? costing in excess of £500, buying a new one is a challenge for most people. In fact, our internal numbers show the average order value for white goods in general to be £1,600+.
There’s no doubt that white goods are essential to every UK household, but high price points prohibit some shoppers from affording them. Finding a way to reduce the upfront cost can increase your conversions as a result.
This is where retail finance comes in.
Retail finance, or checkout finance, is a payment option that gives your customers flexibility and control with their purchases. Dipping into savings or racking up credit card debt has an immediate impact on their financial health – but retail finance allows your customers to spread repayments over a more agreeable time frame, at little or no cost.
This is even more pertinent in the white goods sector where most appliances are crucial to the running of a household. A broken fridge will need an instant replacement, which retail finance can help to facilitate by reducing the upfront cost.
When they’re backed into a corner, retail finance can give your customers the freedom to manage their finances.
Earlier this year, we spoke to nearly 2,000 people to find out how they feel about checkout finance. In this blog, we hone in on those who use it to purchase white goods.
Our UK research
Let’s start with the good news: your customers are already using checkout finance. Eight in 10 say they’re comfortable doing so (we’re working on the other two), while two-thirds actively seek out retailers that offer it. That’s a whole load of potential customers heading to your competitors if you don’t yet offer retail finance.
Three-quarters of customers buying white goods also told us that they’re more likely to complete a purchase if checkout finance was an option, and eight in 10 would spend more if they knew they could split the cost with checkout finance.
When we look at bigger baskets – those over £1,000 – 80% said they would be likely or highly likely to use checkout finance, compared to 68% opting for credit cards. These figures could well mean you abandon the concept of cart abandonment for good – or at least stop worrying about it as much.
If you think that retail finance has a bad name because of the negative headlines about driving people into debt, then hopefully you’re already seeing how it can be used in a mutually beneficial way, particularly for essential or important purchases like white goods. When we asked your customers their views, around eight in 10 said that checkout finance actually helps them to manage their finances.
Further to this, 94% (that’s nearly everyone we spoke to) say that they’re open to, or planning to make a purchase using checkout finance in the next year. That’s a boatload of business waiting to see your shiny new retail finance options.
Whitelabel finance for white goods
Hopefully we’ve helped make the case for how retail finance can help attract and convert more customers for your white goods business. If you’re considering implementing a retail finance solution, or complimenting your existing options then we’d love to have a chat.
Our Divido Connect platform gives retailers access to the world’s first embedded retail finance network, and can connect merchants with finance across the UK and Europe. With one integration you can boost sales by up to 20%, reduce cart abandonment and stay in control of your customer experience.
Get in touch today to find out more.
Become an expert in checkout finance
Our latest research uncovers the shopping habits of 4,000 consumers across Europe’s biggest markets. Learn how shoppers in France, Spain, Italy and Germany use checkout finance, where they spend their money, and how likely they are to use it again.
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