The Top E-Commerce Sectors Benefitting from Installment Payments

A recent Deloitte report shows that the e-commerce market size in the Middle East is around 39 billion USD and is expected to grow to 50 billion USD by 2025. And it doesn’t come as a surprise.

In the last few years, and especially in the wake of the pandemic, consumers have started to increasingly realize the many benefits of ordering both essentials and luxury items online. It helps them explore collections from multiple sellers, pay securely, and receive products within a certain timeline without stepping outside. Recently, the option of installment payments being offered by top e-commerce players is further improving the customer experience and driving conversions and sales.

Installment payments in e-commerce provide customers with more flexibility and boost overall satisfaction. This form of payment allows customers to buy anything they want, even premium items they usually wouldn’t consider, by deferring the billing or spreading out the payment over 4 or more installments.

As an online merchant, you can use an efficient gateway like PayTabs to offer buyers this solution during checkout. While you will receive the payment in full, customers can decide when and how to pay. Now, let’s see which sectors e-commerce benefit most from installment payments.

Installment Payments Benefitting These 5 E-Commerce Sectors

These 5 e-commerce industries are leading the way in embracing installment payments to ease the shopping experience for customers and attract more of them:

1. Fashion and Apparel: Major brands such as Namshi, Calvin Klein, H&M, SHEIN, Tommy Hilfiger, and Lululemon have started offering installment payment solutions so that customers can shop for exclusive pieces and limited edition products that are usually priced high. This has also helped draw young millennials and Gen Z buyers, helping them overcome income limitations while staying fashionable and in vogue. It has also made gifting easy, particularly on special occasions or festive events.
2. Beauty and Cosmetics: Top-quality makeup products can easily burn a big hole in any fashion-conscious woman’s wallet. But not anymore, with installment payments in e-commerce, as well-known names such as Sephora, Ulta Beauty, and Stila have already embraced the same. This enables customers of all ages to shop for their preferred items, including expensive face treatments, perfumes, lipsticks, and foundations, while keeping an eye on their budget for everything else.
3. Electronics and Appliances: This is undoubtedly one of the top sectors that have benefitted from introducing installment payments in e-commerce transactions. Names such as LG and Samsung have already joined the bandwagon, making buying big-ticket items such as air conditioners, refrigerators, washing machines, and televisions hassle-free.
   Many hypermarkets in the Middle East, selling top-end laptops and iPhones, have also started offering the installment payment option so that customers can get their latest gadget fixation satisfied. Even those who have just started earning or students who solely depend on pocket money can now get their hands on snazzy items.
4. Household Items and Furniture: Brands like IKEA and Bed Bath & Beyond are making their products more accessible and affordable for all, including new homeowners, tenants with modest incomes, young families, and single individuals, through installment payments. They are making it possible to own antique sofas, stylish dining tables, big wardrobes, and premium-quality linen without breaking a sweat or the bank. Buying lawn chairs, cushions, storage racks, and décor accents is also possible without paying for it all in one go.
   Given that the Middle East sees a decent influx of expatriates from countries near and far, including those on short work contracts, installment payments make life easy for many. And this is bringing the sector more customers.
5. Entertainment: Gaming is a massive passion and a way to pass the time all around the world, and it is no different in the Middle East. However, video games, consoles, systems, collectibles, associated electronics, and accessories can noticeably pinch the customer’s pocket. With installment payments, though, it is now possible for avid gamers to own their favorites without resorting to despair or loans. The e-commerce gaming industry, with brands like GameStop, is allowing players to keep playing while paying affordably over time.

Reasons Why Top E-Commerce Sectors are Offering Installment Payments

Apart from increasing e-store traffic and driving conversions, installment payments in e-commerce are proving to be helpful in different ways:

• Instilling Trust: Motivating newly-acquired customers to make a purchase is not always easy, especially if they are unfamiliar with a brand or new to online shopping. In such a scenario, offering to pay in installments can nudge them to buy something as they don’t have to invest in it in one go. Leading e-commerce industries realize that and are capitalizing on this smart payment mode.
• Reducing Instances of Cart Abandonment: Often, even after adding items to their cart, customers tend to abandon it right before checkout. They either feel they cannot afford the total billing amount or are not too confident about paying the entire amount upfront without being sure about the product’s quality or efficacy. However, e-commerce sectors offering installment payments address this concern intelligently, as paying one-fourth of the bill, for instance, doesn’t seem too intimidating for most buyers.
• Encouraging More Spending: By allowing customers to pay in manageable installments, leading e-commerce sectors gently lead them to consider buying more items than they intend to. That is because even if a shopper adds a couple of extra products to the cart, the total amount, when spread over 4 or more installments, seems pocket-friendly. However, the seller gets to boost their overall revenue.
• Building Loyalty and Retention: Customers keep returning to sellers who offer them flexibility and freedom in terms of payment. And that is why top e-commerce sectors are using installment payments to fuel their growth, widen the consumer base, and improve loyalty. As this payment format ensures more transparency between the seller and buyer, it helps nurture their long-term relationship.

Conclusion

Now that you know how installment payments in e-commerce are aiding top industries to benefit in more ways than one, it is time to consider the same for your business. In a world of economic uncertainty, offering customers the scope to fulfil their needs without inviting financial worries can be a wise move.

Plus, you can stay competitive in a dynamic e-commerce landscape. A smart and reliable payment gateway like PayTabs can help you get started. Just assess your needs carefully and understand your customer personas before choosing a gateway that fits your budget.

FAQs

Q1. How can my e-commerce business benefit from offering installment payment options to customers?

You can attract more customers, win their trust, make purchases more affordable, offer more payment flexibility, and drive them to spend more. Offering installment payments will also boost your brand value and improve customer retention and loyalty in the long run.

Q2. Are there any specific industries or product categories where installment payments are more advantageous for e-commerce businesses?

While fashion, beauty, electronics, entertainment, and household items are the sectors that have benefitted immensely from introducing installment payment options, any e-commerce business can gain a competitive edge through the same. You just need to pick a payment gateway that is secure, efficient, easy to integrate with your website, and offers customization and holistic support.