When fashionistas file into Revolve Gallery during New York Fashion Week, the online retailer expects sprinkling shows from labels like Aya Muse, Kim Shui and Michael Costello to inspire them to buy hundreds of thousands of dollars worth of merchandise.
For Revolve, what they don’t see is just as important.
The installation is doubling as the debut of a new checkout process, a product created by technology service provider Bolt, where QR codes on clothing tags direct customers to the retailer’s website to complete their purchases with one click. . We hope that shoppers will find the process easier to navigate, increasing the chances that they will complete their purchase. And most importantly, they’ll bypass the cluttered checkout pages — with enticing logos for “buy now, pay later” services — that have become increasingly common on retail websites.
Over the past three years, installment payment services have become ubiquitous on fashion retailers’ checkout pages. Buy now pay later brought in new customers who spent more knowing they could spread payments over weeks or months.
However, some retailers are having second thoughts about that relationship. Klarna, Affirm and Afterpay have seen valuations fall amid new regulations and rising borrowing costs. These concerns have been amplified as fintech firms have sought to become consumer brands themselves. Biggest Big Advertising (Afterpay is the main sponsor of New York Fashion Week as well as London Fashion Week under its UK subsidiary Clearpay).
In fashion, companies are concerned about allowing another middleman to have information about their customers and transactions — similar concerns have kept many brands away from Amazon and other e-commerce sites.
“We might not have been willing to work with Bolt if they hadn’t been so flexible with us in terms of being able to access the data that we felt we needed to access and own. data that we felt like we needed to own,” said Revolve Co-CEO and Co-Founder Mike Karanikolas.
Trade abroad
Retailers have always relied on outsourcing companies to handle complicated back office functions, such as logistics. But with the rise of e-commerce, service firms have become more involved in customer relations, with BNPL as the latest example. The benefits are obvious, the costs sometimes only become clear later, said Hemal Nagarsheth, partner in the financial services practice at business consultancy Kearney.
“BNPL partnerships can give you access to capabilities around things like technology and a seamless checkout experience – which are very important,” said Nagarsheth. “The question that some retailers haven’t had a chance to discuss … is how do we handle that relationship and what data should and shouldn’t be shared.”
For example, when a customer chooses to check out with Afterpay, he is directed to the BNPL firm’s website to complete the transaction. Afterpay – or Klarna, Affirm, or most other installment plan companies – can then possess valuable information about who that customer is, as well as broader data about shopping habits. They can use this data to develop their relationships with consumers – Klarna even has a “super app” where customers can browse retailers’ websites and make purchases without leaving the fintech firm’s ecosystem .
“There’s this idea that retail is at the center of everything the consumer does,” said Deborah Weinswig, founder and chief executive of Coresight Research. “I think in some ways, a lot of consumers feel a lot better about that compared to solution providers who have it all.” [their] data.”
From frictionless to invisible
What many fashion companies now want from third-party vendors are the frictionless solutions they promise all while remaining invisible, experts say.
“The future is to continue to reduce friction, to make things really fast and really transparent,” said Keval Desai, a former Google executive and founder of SHAKTI, an early-stage technology venture capital firm. “The more transactions you enable, the more money you make … instead of doing that, fintech companies have been doing all kinds of gymnastics.”
In its NFYW gallery, Revolve will also become the first to use Bolt’s latest product, Checkout Links, which allows shoppers to check out with a single click wherever they discover a product, whether online (like in an email or blog post from a brand ) or offline (such as at a NYFW pop-up, a trade show, or in-store.)
Revolve still offers BNPL options on its website, with Bolt acting as “a layer on top of all the different payment options,” giving the retailer access to more data, said Maju Kuruvilla, Bolt’s chief executive.
“Merchants are in this difficult space where they’re trying to meet the customer where they are, and customers are using all these different alternative payment options,” Kuruvilla said. “But then, now that they’ve enabled all these options, the marketers start [wondering] “Who owns my client and where is my data?”
Even complementary solutions like Bolt are not without their drawbacks. In July, licensing company Authentic Brands Group filed a lawsuit against Bolt alleging the online checkout service provider breached its contract and failed to deliver its payment software as promised and then changed the terms of their agreement. of capital. As part of the deal, ABG became a shareholder of the fintech startup.
Like Bolt, other firms are looking for ways to offer services similar to BNPL by leaving the retailer in charge of customer relationships. Splitit, for example, allows consumers to pay off large purchases in monthly installments using their credit cards.
More traditional banks like Barclays and HSBC Bank are also starting to create buy-now pay-later options, as are credit card companies and payment processors like Paypal. This could help allay consumer privacy fears as well as help retailers fend off increased competition from BNPL’s startups, Nagarsheth said.
“For retailers, you wouldn’t consider a bank a competitor and, for consumers … they trust banks with their data because banks hold their money,” he said.
It’s the big retailers like Revolve that are in the best position to drive a different bargain with their service providers. Many smaller retailers are focused on getting more customers and are willing to sacrifice some control over customer relationships to increase sales.
“The war for consumer data is a very real war,” said Nandan Sheth, chief executive officer of SplitIt.
