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How ARCHFASHION achieved double-digit sales growth

As an online fashion marketplace, ARCHFASHION has its finger on the pulse of e-commerce trends. One trend bearing real fruit for retailers is the rise of “buy now, pay later” offerings at checkout, according to ARCHFASHION co-founder Allen Zelden.

“Retailers are both frustrated and excited [with the current state of payments],” Zelden said. “Retailers are frustrated that they have to bear all the risk of chargebacks while the institutions whose business profits from this risk absolve themselves.

“The ‘card not present’ mentality is outdated, and soon too will be the physical cards themselves. Traditional disruptors like Visa and Mastercard have forgotten what made them great and are scrambling to play catch up.”

This has created an opportunity for no-interest, point-of-sale credit providers to gain a foothold at checkout by giving customers more options for payment. For instance, when ARCHFASHION customers check out online, they can choose to “Pay Later with zipPay” and split the cost of their purchase (up to $1000) into weekly or monthly repayments.

Since adding the zero interest payment method to its checkout process in July, ARCHFASHION has experienced double-digit growth in sales.

“This shows us that customers have no hesitation in transacting in this ‘buy now, pay later way’,” Zelden said. “It’s an incentive for customers to purchase and they have embraced the cardless system in a very big way.”

Zelden noted that retailers have also embraced the flexible payment option, since zipPay deals with any chargebacks. “What the new disruptors have done is give power and security back to both the customer and the retailer,” he said.

According to Zelden, ARCHFASHION’S sales growth represents just a sliver of the total “buy now, pay later” potential. “Yes, ramping up this channel boosts [online] sales, but imagine the impact if this upward trend is replicated instore, where the majority of trade occurs.”

He sees alternative payment methods pushing bricks and mortar retailers to a tipping point, where an increase in instore sales of even 1-5 per cent could substantially improve their profitability.

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