How payment platform Afterpay is rallying social shopaholics to grow its network among SMEs
Wednesday, August 31, 2016/
Instalment payment platform Afterpay has rallied an army of passionate customers in its efforts to get its technology into more retail stores across Australia.
The company allows shoppers to use an Afterpay account to purchase items from Australian online and bricks-and-mortar retailers and pay for their shopping in instalments. It listed on the Australian Securities Exchange in May and since then the share price is up 112%.
In a message to its user base last week, the brand asked its fans to get to work and lobby their favourite businesses to take up the product.
In the days since, users have been targeting major shopping centres, department stores and brands like Mecca, Peter Alexander, Bardot, Bras N Things and Sephora via social media, using the hashtag #afterpayit.
Afterpay co-founder Nick Molnar told SmartCompany the brand is chasing the momentum that comes with their enthusiastic shopper base.
“We have a portfolio of strong brands already, including a lot of small businesses,” he says.
“Our customers are our biggest advocates and they’re really passionate about our brand.”
The move to leverage the existing customer base comes off a period of rapid expansion for Afterpay; with 30,000 customers using it in December last year, the brand now claims it has access to 140,000 shoppers.
Businesses sign up to use the service and pay a commission to the platform for sales made using its technology. Afterpay pays companies outright for their products, then collects instalments from shoppers over a four to six-week period, meaning the risk of failed payments is assumed by Afterpay.
Why retailers are jumping on board
A number of fashion and lifestyle brands have been early adopters, including General Pants Co, Cue, Marcs and Black Milk. Global customer service manager for Black Milk Clothing, Emma Jacobson, says the company signed on to reach a group of customers who were shut out of the brand’s iconic “one time only” product sales.
“We have things like ‘Funtimes Friday’ here where we’ll announce we’re selling a product just for the weekend,” she says. “A lot of people would say ‘I wish I had it longer, it’s not my payday this week!’ This is really a saving grace for them,” she told SmartCompany.
In a world where traditional lay-by models seem to be falling out of favour with retailers – Target notably scrapped its six month lay-by policy at this year’s end of financial year toy sale – new payment platforms are being spruiked as an alternative.
“We know the average Afterpay sale is about 30% higher than for normal orders, so we see it driving sales,” says Jacobson.
Matchbox homewares is another retailer on board. “Our customers seem happy to have it, and for us we’ve actually seen a lot of new customers from it,” Matchbox e-commerce manager Annie Moon-Arkell told SmartCompany.
The platform is building itself as an alternative to payday lenders, although it does have late fees in place for not meeting payments. The Consumer Action Law Centre warned customers through a Fairfax report this month that even though the Afterpay product claims to be interest-free, users could still be liable for credit card interest with their card providers.
The callout to customers has inspired some frenzied responses as shoppers look towards retailers that offer limited time offers and lifestyle products. Many seem aware that the platform courts temptation. “Afterpay makes my online shopping even worse. SEPHORA needs after pay though,” said one shopper on Facebook.
Molnar says the social media engagement strategy is aiming at building a stronger portfolio of brands for Afterpay’s books.
“Customers like our product, because they know we’re genuinely in their favour,” he says.
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