As we begin to slowly find a way out of the current health crisis, the threat of a financial crisis will soon become front of mind for many consumers and retailers, writes Richard Brassey, director at Barclays Partner Finance
At Barclays, we have a unique view of the retail landscape and we are starting to see similarities in consumer behaviour with how they responded to the financial crash of 2008.
Consumers are looking for more ways to protect their capital in light of economic uncertainty, and finance options at the checkout – particularly 0% options – are increasing in value and popularity for both consumers and retailers.
There have been record numbers of applications for finance throughout the pandemic and there could be a few simple reasons for this.
Stretching the pennies
Not only are consumers considering new ways to make their money go further, they are also embracing the opportunity to update and enhance their homes. Many consumers are using cash they may otherwise have spent on entertainment or the commute, so it is no surprise that smart products and tech upgrades are growing in demand.
For retailers, last year was about adapting to change and finding ways to accommodate the evolving needs of consumers in a crisis. This year will be no different – and retailers would be wise to consider offering the flexibility of finance at the point of sale as a way of reducing the impact.
An uncertain future
With the effects of Brexit looming and the US presidential election still to be felt, there is even more uncertainty on the horizon.
Let’s not forget that payment holidays and the furlough scheme are due to end in the coming months, which could result in unemployment rates rising and consumer creditworthiness plummeting.
Finance at point of sale allows people to stay in control of their purchase and select a product that aligns with their means. Retailers should work closely with their lender to make sure the customer journey is transparent.
Flexible finance is in demand
We have worked closely with our retail partners to help them adapt and evolve to meet new customer needs – from contact-free shopping to fully digital end-to-end solutions.
This insight shows that there is much for retailers to be positive about but there is still work to be done.
While the economy recovers, demand for finance is likely to be high for many years to come, and having a robust end-to-end finance solution in place could make all the difference in the competition for consumer pounds.
Richard Brassey is director at Barclays Partner Finance