How to offer finance for watches

How to Offer Finance for Watches

In today’s retail landscape, offering finance options has become a popular way to boost sales and provide customers with more flexibility when purchasing high-ticket items, including luxury watches. For many buyers, a luxury watch is a significant investment, and the ability to spread the cost over time makes the purchase more accessible. As a retailer, offering finance for watches not only benefits your customers but can also increase your conversion rates, average order value, and customer loyalty. In this article, we will explore how to offer finance for watches, the benefits it can bring, and how to implement it effectively, with a focus on how Kandoo, a UK retail finance broker, can assist you in this process.

Why Offer Finance for Watches?

Luxury watches are not just timepieces; they are often seen as status symbols, heirlooms, and long-term investments. However, the high cost associated with well-known brands such as Rolex, Omega, or Patek Philippe can make them unattainable for many buyers who would otherwise be interested. Offering finance options can be a game-changer for both your customers and your business.

1. Increased Sales

One of the most immediate benefits of offering finance is the potential to increase sales. When customers have the option to spread payments over several months or even years, they are more likely to make a purchase, especially for high-ticket items like luxury watches. This can significantly reduce the barrier to entry for customers who may not be able to afford the full price upfront.

2. Higher Average Order Value

Offering finance can also encourage customers to spend more. Instead of settling for a lower-priced watch due to budget constraints, customers may feel more comfortable upgrading to a higher-priced model when they know they can spread the cost over time. This can lead to a higher average order value (AOV) for your business.

3. Improved Customer Loyalty

When you provide flexible payment options, you show that you understand and cater to your customers' financial needs. This can help foster a sense of trust and loyalty, encouraging repeat purchases and long-term customer relationships.

4. Competitive Advantage

Offering finance can also give you a competitive edge. With more and more retailers offering flexible payment plans, customers are increasingly expecting this option when shopping for high-value items. By offering finance, you ensure that your business stays competitive and meets customer expectations.

Types of Finance Options for Watches

There are several types of finance options that you can offer your customers, each with its own benefits and drawbacks. It’s essential to choose the right option based on your business model and customer base.

1. Interest-Free Credit

Interest-free credit allows customers to spread the cost of their purchase over a set period without paying any interest. This is a popular option for customers, as it means they don’t end up paying more than the original price of the watch. Typically, interest-free credit is offered over 6 to 12 months, though longer periods may be available depending on the finance provider.

Pros:

• Highly attractive to customers
• Can significantly boost sales
• Encourages customers to buy more expensive items

Cons:

• The retailer usually bears the cost of offering interest-free credit
• Not suitable for all businesses, especially those with tight margins

2. Low-Interest or Standard Credit

With low-interest or standard credit, customers pay interest on the finance over the repayment period. This option is often offered over longer periods, such as 24 or 36 months, and is suitable for customers who prefer lower monthly payments.

Pros:

• Allows for longer repayment periods
• More affordable for businesses to offer
• Customers with tighter budgets may prefer smaller monthly payments

Cons:

• Less attractive to customers compared to interest-free options
• Can deter some customers due to the added cost of interest

3. Buy Now, Pay Later (BNPL)

BNPL schemes allow customers to take home their watch immediately and delay payment for a set period, typically 30 to 90 days. After the delay period, the customer can either pay the full amount or choose to spread the cost over several months, often with interest.

Pros:

• Encourages impulse purchases
• Allows customers to try the product before committing to full payment
• Flexible and convenient for customers

Cons:

• May lead to higher default rates
• Interest charges can be high if customers choose to spread payments after the delay period

How to Implement Finance for Watches

Now that you understand the different types of finance options, the next step is implementing them into your business. There are several factors to consider when offering finance, from choosing the right finance provider to integrating the option into your sales process.

1. Choose a Finance Provider

The first step in offering finance is partnering with a reputable finance provider. This is where Kandoo, a UK retail finance broker, can be a valuable partner. Kandoo specialises in connecting retailers with finance solutions that are tailored to their needs. They work with a panel of lenders, offering a range of finance products, including interest-free credit, low-interest credit, and BNPL schemes.

Kandoo takes the hassle out of setting up finance by managing the entire process for you, from sourcing the best lenders to integrating finance options into your online and in-store checkout systems. This allows you to focus on running your business while Kandoo ensures your customers have access to flexible and competitive finance options.

2. Integrate Finance Options into Your Sales Channels

Once you’ve chosen a finance provider, the next step is to integrate finance options into your sales channels. This includes both your online store and your physical locations, if applicable.

• Online Store: Ensure that finance options are clearly displayed on your product pages, particularly for high-ticket items like luxury watches. Customers should be able to see the finance options available and calculate their monthly payments before adding the item to their cart. Most finance providers, including Kandoo, offer easy-to-integrate solutions for e-commerce platforms.

• In-Store: Train your sales staff to explain finance options to customers in-store. Make sure they are knowledgeable about the different plans available and can answer any questions the customer may have. Displaying signage in-store that promotes your finance options can also help encourage customers to consider financing their purchase.

3. Make the Application Process Simple

The easier it is for customers to apply for finance, the more likely they are to use it. Ensure that the application process is quick, straightforward, and accessible both online and in-store. Kandoo offers a seamless application process, allowing customers to apply for finance in just a few clicks or with the assistance of your sales team.

4. Promote Your Finance Options

To maximise the impact of offering finance, it’s essential to promote it effectively. Here are some strategies you can use:

• Product Pages: Highlight finance options prominently on your product pages. Use banners or callouts that emphasise the availability of interest-free credit or low monthly payments.

• Email Marketing: Send targeted email campaigns to your customer base, promoting finance options for specific watch models or collections.

• Social Media: Use social media platforms to promote your finance offerings. Share posts that explain how customers can spread the cost of their watch purchase and highlight any special finance promotions.

• In-Store Promotions: If you have a physical store, use in-store signage to promote your finance options. Train your staff to mention finance during the sales process, especially when dealing with customers who may be hesitant to commit to a large purchase.

The Role of Kandoo in Offering Finance for Watches

Kandoo can play a crucial role in helping your business offer finance for watches. As a retail finance broker, Kandoo connects retailers with a panel of trusted lenders, ensuring that you have access to a wide range of finance options. Whether you want to offer interest-free credit, low-interest credit, or BNPL, Kandoo can help you find the best solution for your business and your customers.

Benefits of Partnering with Kandoo:

• Flexible Finance Solutions: Kandoo offers a variety of finance products, allowing you to choose the options that best suit your business model and customer base.

• Seamless Integration: Kandoo’s finance solutions can be easily integrated into your online store or in-store checkout systems, ensuring a smooth and hassle-free experience for both you and your customers.

• Customer Support: Kandoo provides ongoing support to both you and your customers, ensuring that any issues are resolved quickly and efficiently.

• Compliance and Regulation: As a UK-based broker, Kandoo ensures that all finance products comply with UK regulations, giving you peace of mind that you are offering finance responsibly.

Conclusion

Offering finance for watches is a powerful way to increase sales, boost average order value, and enhance customer loyalty. By providing flexible payment options, you make luxury watches more accessible to a broader audience, allowing your customers to enjoy the timepiece of their dreams without the need for an upfront lump sum payment.

Partnering with a retail finance broker like Kandoo makes the process of offering finance simple and stress-free. With Kandoo’s expertise, you can provide your customers with a range of finance options that suit their needs while ensuring that your business remains competitive in the luxury watch market.

By implementing finance options effectively and promoting them through your sales channels, you can create a win-win situation for both your customers and your business.