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While the explosion of start-ups and new payment solutions in the fintech space has signaled traditional banks to play “catch up” in some regards, still others have offered point-of-sale financing solutions all along.

Dana Warren, senior director PayPal Credit merchant distribution at PayPal, shares insight on the current landscape of financial technology. At PayPal, her team works with millions of retailers to implement and optimize online financing options for consumers, especially Millennials and Gen Z.

WWD: What are the overarching purchasing trends you’ve noticed in fashion and beauty categories?

Dana Warren: Fashion and beauty consumers view their purchasing decisions as a part of their identity and a means of self-expression, especially Millennials and Gen Z. Some 60 percent of Millennials gravitate toward purchases that express their personality. Fashion purchases today are more than transactions — consumers make choices based on personal style, sustainability, ethical practices and values-driven brands. But that can also drive up prices, so this age group looks for alternative ways to buy these types of products, in a way that fits within their financial means. When PayPal Credit is offered, Millennials spend 28 percent more, and with Gen Z, it’s even greater at 41 percent. Online financing has been so successful among these age groups because it enables consumers to live in the moment and pay over time. At the same time, we make sure our customers understand how their account works, and what our offers mean.

WWD: What are the behavioral differences between younger and older consumers in fashion and beauty?

D.W.: It has been estimated that the Millennial generation will have more buying power than any generation in history, so figuring out how to connect with them, how to attract them and, critically, how to keep them, is paramount for every company in every industry. This age group grew up in the era of social media, including nonstop news cycles, and companies must be more transparent than ever before about their practices. That, paired with the fact that younger consumers expect seamless digital shopping experiences, means retailers face customers with a unique set of expectations compared with older generations.

WWD: How can retailers and brands attract the Millennial consumer?

D.W.: The next-gen shopper is digitally native and mobile first, they value choice, and want to control their ability to customize experiences. All of PayPal Credit customers are acquired online, and half of those transactions occur on mobile. Millennials today make 54 percent of their purchases online and expect seamless, friction-free experiences during checkout.

I’ve learned from the retailers we work with that mobile conversion is a major challenge. PayPal Credit can help retailers drive sales on mobile because the Millennials and Gen Z customers are typically bringing their PayPal Credit “open to buy” with them — meaning, the open lines of credit they have with us. Retailers must offer payment experiences that meet these consumer expectations and these shoppers expect the experience to be seamless.

WWD: What are the ways to drive loyalty for next-gen consumers?

D.W.: What’s unique about PayPal Credit is that it’s an open-ended line of credit, so once consumers are approved, they can use their online credit at most of the 22 million retailers that accept PayPal for all future purchases. And what this means to retailers is that our base of consumers brings billions of dollars in open to buy: They are active shoppers — not browsers — and they don’t need to reapply for credit each time they intend to make a purchase.

WWD: What advice would you give to fashion industry professionals looking to grow sales, increase loyalty and win over the younger shoppers?

D.W.: I would recommend adding payment options that don’t just meet but anticipate the needs of Millennials and Gen Z. Partner with proven providers that bring this population of higher spending customers to your site, ensure you are offering trusted digital tools that operate with a mobile-first mindset, and support brands that take a stand because this [consumer] segment pays for values.

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