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Lockdown Trends and the Rising Star of BNPL – Q&A with Latitude Pay
The last 12 months has changed the world as we know it forever. We sat down with Paul Varro, the Chief Commercial Officer at Latitude Financial to discuss the forthcoming trends, changing customer behaviour and the impact on retail as a result of the pandemic.
Online retail has been experiencing history-making changes in the last six months. What have been some of the most significant changes that Latitude has seen in the first half of the year?
During COVID-19 we’ve been working extremely hard to support our merchant partners and as a result, we’ve seen significant growth across all of our interest-free products, including our Buy now, pay later platform LatitudePay.
In particular, we’ve seen the impact of customers focusing on their homes and their health, with strong growth in those retail categories. We’ve also continued to sign big Australian brands to LatitudePay including Cotton On Group, Pharmacy Online and George & Matilda.
As Aussies realise the potential of e-commerce over the last few months, there has been a flurry of new customers entering the e-commerce landscape. Has Latitude seen a change in customer behaviour, and how has it impacted its strategy going forward?
We recognised early in the pandemic that there was an increasing customer interest for interest-free shopping and that’s why we reset our strategy to grow and invest in interest-free products which retailers can offer to their customers.
Before the end of the year, we’ll have more announcements for our merchant partners on new products for interest-free shopping that will support merchants to grow sales and.provide their customers with more payment options.
How did Latitude adjust to the impact of the pandemic?
We quickly understood the changing customer preferences, and the ongoing need for interest-free shopping to help customers purchase what they needed through the pandemic.
Our teams reach out to our merchant partners every week to engage and assist them, especially during this challenging time. The integration of LatitudePay with all major e-commerce and POS platforms means that our onboarding process remained quick and easy for merchants, so they can quickly set-up and start to track their sales.
As online continues to dominate the landscape amid the pandemic, how did LatitudePay maintain growth?
LatitudePay has grown to half a million customers in Australia and we’ve become the third most recognisable BNPL brand in Australia. Customers have shown a strong preference for 10 weekly repayments, with no interest and our low merchant fees means retailers benefit strongly too.
We continue to attract thousands of new customers every day and work with our partners to market to our existing customer base.
Many older Australian shoppers are using e-commerce platforms for the first time. Does Latitude have a strategy to make the shopping experience easier for those who aren’t used to the e-commerce platform?
Our data shows that buy-now, pay later has a broad demographic reach, expanding beyond traditional millennial shoppers. While some of recent highest growth areas are in Gen Z who live in the inner-city, the appeal of our interest-free shopping stretches across cities and regional areas and into higher-earning demographics. In fact, LatitudePay’s average transaction value is up to 36 percent higher than other buy now, pay later providers.
Our 10-week re-payment model, with no interest, is easy for shoppers to understand, which contributes to sale conversion and a seamless online shopping experience
Have there been introductions of new marketing strategies over the last six months to accommodate for the new online shoppers?
We’ve continued to partner with our merchants to give customers great offers and sales events, such as our recent, highly successful FOMO PROMO sale to celebrate 12 months of LatitudePay. We partnered with over 100 retailers, including big brands and smaller, local businesses, to attract new customers and drive sales.
What do you believe are the biggest challenges for Australian e-commerce businesses right now, and what could be done to address these? What are the biggest opportunities?
COVID-19 has dramatically accelerated online shopping which retailers will need to embrace.
From our perspective, we’re the market leader in providing interest-free payment options which consumers can easily access online while they’re shopping. The change in consumer preference to interest-free shopping highlights the competitive advantage that we already had in that payments space and so we’re continuing to invest in personalised experiences for consumers and merchants.
Looking back at the last six months, what has been the biggest challenge, and what has Latitude learned from the experience?
The impact of the pandemic on retailing has been a big challenge for everyone. While some categories have seen significant growth, the lockdowns and restrictions have taken their toll on sales in other areas.
We’ll continue to support our partners to increase sales with our low merchant fees, easy payment options and by using data to build personalised merchant and consumer experiences.
What online retail trends does Latitude expect to see in the second half of 2020?
The popularity of online shopping will continue, particularly around home and health categories, and in the second half of 2020, it will also be supported by shoppers returning in-store.
Buy Now, Pay Later, is here to stay and we envisage more consumers, across all demographics, giving it a try, along with other forms of interest-free shopping.
Blurring the lines between brick and mortar and online retail is becoming an increasingly popular trend. Does Latitude expect treating the customer as channel-less to become even more important in this half of 2020?
From our perspective, we’re moving to become a completely digital-led platform business to offer retailers and customers a seamless experience.
Is there anything exciting coming our way from LatitudePay?
LatitudePay continues to exceed our expectations including customer numbers, merchant take up, basket size, and repeat business. We’ve got some exciting announcements to come before the end of the year that will help drive growth for our merchant partners, particularly for larger purchases.
Is there anything you’d like to add?
Unlike other finance companies, we put the partnerships we build with merchants at the centre of what we do. We recently extended our 30-year partnership with Harvey Norman, to continue to provide interest-free payments and instalments to their customers. We’re now Australia’s clear leader in facilitating instalment payment shopping, working with thousands of retail partners across the country and we’ve been delighted by the launch of LatitudePay. We’re working harder than ever to be innovative to develop new interest-free products to continue to support our partners.