Good news for retailers. TD Bank on Wednesday released findings from its latest Retail Experience Index, which shows that 46% of consumers are more likely to purchase from those who offer a variety of financing options. It also found that 70% of consumers are likely to make a large purchase in the next six months, and a third (31%) expect to spend more this holiday season than they did last year.
The biannual survey tracks purchasing habits, particularly when it comes to big-ticket items (defined as spending $500 or more on a single item).
According to the findings, one in five (21%) consumers said they financed their most recent big purchase, and, of this group, 92% said the retailer’s financing program was an important factor in proceeding with the purchase. Another 78% said the ability to finance affected the amount they were willing to spend.
“Financing options are no longer viewed as a perk for shoppers when selecting a retailer for their next big purchase, but rather a key differentiator in where they buy these goods,” said Mike Rittler, head of retail card services at TD Bank. “As consumer preferences vary and evolve, it’s important for retailers to not only offer financing, but a variety of options to meet their customers’ individual needs, and ultimately increase repeat business.”
With more options available than ever, consumers are taking advantage of both short and long-term financing:
Nearly half (47%) of consumers said they have a store branded credit card. Of this group, millennials are most likely to carry three or more store cards and most frequently swipe those cards.
Meanwhile, 23% have used a point-of-sale installment loan, and 63% of survey respondents said they would be more comfortable using an installment loan from a respected financial institution to finance their purchase.
For consumers who anticipate increasing spending during the 2021 holiday season, more than a third (34%) expect to increase spending on updating and outfitting their house to host holiday festivities.
The survey also captured an overall surge in home improvement spending sparked by the pandemic. Home-based products made up a strong percentage of large purchases during the past year, with electronics and music equipment (43%), home appliances (39%), furniture (35%) and home improvement items (35%) as the top spending categories among consumers surveyed.
E-commerce is still relevant, as 81% percent of consumers shifted a portion or all of their shopping online during the pandemic, and 32% expect to do more of their shopping online moving forward.
Additionally, amid ongoing COVID-19 concerns, 44% of consumers report trying to minimize their time in stores, and about half (52%) said they would prefer to use contactless technologies to place and finance purchases, rather than speaking with a person.
“The shopping experience is evolving, and retailers are tasked with providing their customers with a fully integrated, cohesive experience that easily translates from online to store,” Rittler added. “Many retailers have invested in contactless financing, virtual showrooms and robust online customer service to provide the most seamless and safe experience possible across channels.”
The survey found that a third (31%) of consumers said the retailer’s website was the biggest influence in their decision-making for their last major purchase. This marked the first time the online channel overtook brick-and-mortar stores as most influential in this question’s responses. And 41% said they prefer to browse and research products online and then purchase in-store to minimize time spent in retail locations.
The survey was conducted by Maru Public Opinion from Sept. 3-10 among 1,001 randomly selected American adults (age 18+) who are Maru Springboard America online panelists and who made a major purchase in the past 12 months.
The full report can be found here.