The last 18 months has been particularly difficult for retailers not named Amazon. The retail behemoth continues to increase market share at an alarming pace, and the rest of the retail market is struggling to find sustainable ways to compete.
One of our primary objectives at Affirm is to help retailers overcome these obstacles, and we’re doing that today by helping make their products easier to buy. Retailers with higher priced, considered purchase products are seeing significantly increased revenues by allowing consumers to buy now and pay for their purchases over 3, 6 and 12 month periods with Affirm. It also saves retailers from diluting the market value of their products by resorting to discounting in order to remain competitive.
Our unique approach to underwriting is opening up credit responsibly to a much larger pool of deserving consumers that would otherwise be denied by traditional, FICO-based models. And Affirm’s unyielding commitment to transparency and honesty—telling consumers exactly what they’ll pay, up front, and never increasing that amount by even a single penny—gives consumers the confidence that their financial decisions are made with full visibility into the total cost of their purchase.
For retailers, the key to success with Affirm is informing consumers that this transparent, honest financing option exists, while they’re still in the decisioning phase instead of waiting for them to get to checkout to learn about Affirm. Today, most of this education takes place on the product detail page, the top-of-the-funnel of a consumer’s purchase journey.
But there is substantial pain further down the funnel, where retailers report an average 75% cart abandonment rate. Seventy-five percent! For every four consumers who put something in their cart, only one will end up actually making the purchase.
Over the last several years, retailers have worked hard to develop programs to help recover those lost purchases, and abandon cart emails are typically one of the highest performing of their email campaigns. Sending coordinated abandoned cart emails one hour, twenty-four hours, and 7 days after the consumer abandons the site are proven to substantially increase recovery rates.
Affirm believes that this is an area where we can help tremendously. According to a report by eConsultancy Group, three of the top four reasons that consumers abandon have to do with price:
- Presented with unexpected cost (57%)
- Just browsing (37%)
- Found a better price elsewhere (36%)
- Overall price was too expensive 32%)
One could reasonably hypothesize that retailers with higher priced, considered purchase products would have even greater abandoned cart percentages than the averages shown above. But even with these numbers, it’s clear that a solution to help consumers effectively manage the costs of their purchase should have a positive, if not material, impact on cart recovery and revenue.
That’s why I’m excited to introduce the Affirm Marketing Performance (AMP) Partner Program.
Over the last 6 months, Affirm has been working closely with industry leaders that provide marketing automation solutions. We’ve partnered to directly use Affirm’s as low as monthly price in any email template, so marketers can take advantage of this important marketing tool with drag-and-drop efficiency.
Our initial set of partners include Bluecore, Clevos, Datacrushers, Listrak, Oracle + Bronto, SaleCycle and SmarterHQ. Each has worked closely with Affirm to build integrations into their platforms to make it easy for our joint clients to incorporate Affirm’s messaging into emails.
Initial A:B tests have proven the effectiveness of utilizing Affirm in abandoned cart email campaigns, with most retailers seeing double-digit increases in cart recovery conversions.
It’s as simple as inserting the as low as messaging directly into the email, and ensuring the consumer sees the financing option very clearly.
Here at Affirm, we’re committed to continuous innovation and we’re working to make it seamless for retailers to incorporate Affirm into their marketing efforts. While our initial efforts have focused on the email channel, we are expanding efforts to support other marketing channels programs across the entire customer journey.