Until a few years ago, the term affordability was associated solely with the inexpensiveness of a product. There was no scope of connecting it with other aspects of commerce.
However, over time newer developments have redefined how both businesses and consumers understand affordability. The discernment of value is a combination of multiple factors that mostly revolve around payments and help a consumer conclude if it is an affordable deal.
As businesses strive to influence buyers through a comprehensive value proposition, this article talks about how affordability can be diversely positioned and presented for better assessment by the consumer.
What Does Affordability Mean For Today’s E-commerce Businesses
Retailers have been exploring multiple ways to accelerate their business and affordability has emerged to be a significant contributor. It has led to e-commerce being the most preferred medium for purchases.
In the current context affordability broadly refers to the ease with which a consumer can transact. Businesses are introducing innovative modes of payment that help consumers readily invest in a product. Some of them are focussed towards lowering the price while other methods work on incentivising the buyer.
With severe competition and price wars, businesses today are working towards long-term affordability tactics and strategies that can eventually help them with customer retention and loyalty.
What Are The Ways in Which Businesses Can Ensure Affordability For Their Buyers?
1. Deferred payment option
Deferment of payments refers to its postponement, wherein instead of paying the amount at the time of product purchase, it is done over a period of time.
Businesses allow customers to use these options by storing their personal details so that in case the buyer does not initiate the transaction on time, they can be subsequently charged.
The benefits of offering deferred payment options are:
- It allows consumers to make purchases even without sufficient liquidity at the time of the transaction
- Owing to fixed instalments buyers are able to plan and distribute their money better
- Most of the options can be easily availed without tedious documentation
The most common deferred payment options include EMI, Buy Now Pay Later and Credit cards. Read this article to understand how a business can ease the consumer’s shopping experience using deferred payments as an affordability technique.
Paytm Payment Gateway offers Paytm Postpaid a Buy Now Pay Later facility where users can avail upto INR 60,000 instant spend credit with 0 interest.
2. Tactical discounts and sale events
This is an affordability strategy adopted by businesses to maximise sales in a short period of time. It does not include frequent discounts or sales but well-planned events which attract a huge traction.
An example of tactical discounts is the annual or festive sales that several e-commerce companies have started to conduct. Prices are slashed across categories and on almost every product. These events are mostly held during a festival or celebration such as the new year to encourage higher traffic and sales.
The Big Billion Day Sale which is held by Flipkart every year has become a significant event in itself and in 2022 had 1 billion visits to the site during the 8-day period with more than 60 per cent of those customers coming from tier 2 and tier 3 cities.
Tactical discounts can be planned without impacting the business’s profits or devaluing the brand. The objective is also to attract new users to the website while retaining older customers.
Interesting Read: 6 Innovative Ways Online Businesses are Offering Affordability to their Consumers
3. Calculative product launches
Another interesting way of enabling affordability is through well-timed and exclusive offers on premium or luxury goods. A well-crafted product launch and promotional strategy laid out at specified intervals can effectively attract and convert more users.
For instance, let’s say a smartphone company has launched its newest phone which is also steeply-priced. Some buyers might want it immediately and are ready to invest right on day one. A few others might choose to wait for a while and hope for an ideal offer on it such as a free accessory. Many others might wait even longer expecting a seasonal or festive discount.
Hence, when a brand is able to identify this customer behaviour, it can cater to different types of buyers at various stages of the product launch.
Rather than expecting everyone to invest in a product at one time or with a single offer, analysing the purchase intent, and segmenting customers based on it can maximise conversions. It triggers and sustains interest in a product without depreciating its value.
4. Incentivising users
Incentivising existing customers is a great way to offer affordability and ensure loyalty.
It is a marketing as well as an affordability tactic to ensure that the customers return back to a store by giving them redeemable rewards, membership discounts, and other offers.
Loyalty programs are a popular example of an incentive-focused affordability technique. A user is often given early access to offers, extra discounts and points that are redeemable on the next purchase. This way businesses are certain of the customer returning back to their platform.
Here are the advantages of adopting this method:
- Ensures customer retention and increase in online sales
- Sets a business apart from its competitors
- Makes users feel special and motivated to buy
- Allows a brand to build a long-term relationship with its customers
Interesting Read: Offers and Cashbacks: The Essential Instruments of Affordability
Conclusion
Businesses always strive to offer their customers a better deal than the competition and with the aforementioned approaches, it is indeed possible to maintain a fair balance between affordability and profits.
Nonetheless, retailers must focus on value as a whole while offering affordability to be able to truly connect with the customers and maintain steady growth.
FAQs
What is the most effective affordability offering?
All of them are equally effective and will depend on what the buyer prefers, hence Including multiple affordability techniques allows your users to choose and pick the best fit.
What role does affordability play in ensuring better sales?
Since affordability offers options to make payments more easily, effectively it contributes to a reduction in cart abandonment and therefore better sales.
Is affordability the same as product discounts?
Discount on a product is just one aspect of affordability. It can be extended through many other ways such as rewards and offers. Businesses can employ several inventive methods to offer affordability to their consumers.
