Everybody Sleeps! Rest Assured, You’ve Got the Mattress for Them
People spend roughly one-third of their life sleeping, which makes a mattress one of the most important purchases consumers can make. However, mattresses are also personal and meant to last for years. Getting a quality one can be pricey.
Currently, 40% of U.S. consumers are unable to purchase items that cost $400 or more without financing options, due to cash flow issues. Quality mattresses average $1,000 or more, putting them out of reach for millions of consumers. On top of this, sky-high inflation is making almost all goods, including necessities such as food, gas, and rent, increasingly more expensive. That’s why more people, even those with six-figure incomes, are living paycheck to paycheck.
People with nonprime credit scores are being squeezed even tighter. These consumers have even greater difficulty paying for durable goods, such as mattresses and furniture, because they face another barrier: they are overlooked by traditional financing institutions and lack access to credit. Today, 40% of adult consumers in the U.S. have a FICO score below 700, effectively leaving them out of the financial conversation.
Just because some people have lower credit scores doesn’t make them any less deserving of a comfortable mattress. Savvy merchants have begun to realize that they leave significant revenue on the table by not recognizing the purchasing power of this often-overlooked customer segment, and by not offering them flexible and affordable payment options that enable these consumers to buy the goods they need.
Katapult, the leading lease-to-own provider that integrates with major omnichannel platforms across industries including mattresses, empowers nonprime customers to purchase the items that they need through a modern and transparent lease-to-own model. By offering Katapult’s lease-to-own platform as a lease-purchase option for your mattresses, you are helping to power the inclusion economy and enabling everyone, regardless of their financial situation, to obtain durable goods.
According to research conducted by Katapult in partnership with PYMNTS.com, as many as 46 million new consumers may be motivated to try lease-to-own options when participating retailers offer them. What’s more, lease-to-own customers have high repeat purchase rates and tend to be more satisfied with their purchases. Merchants offering this alternative payment solution also typically see a substantial increase in both conversion rates and average order value.
Katapult also seamlessly merges with existing point of sales systems and platforms, and there is no additional equipment required from merchants for set-up and maintenance. Plus, Katapult takes on the associated risk – it purchases the item from the merchant and funds the merchant as early as the next business day. The customer then makes regular lease payments to Katapult for the item they’ve obtained. Additionally, a customer can always choose to return their lease-purchased goods with no further obligation to Katapult. Plus, Katapult is there to support merchants every step of the way via cross promotions, digital marketing, and multichannel campaigns.
At the same time, Katapult is easy for customers to use. Unlike lease-to-own models from other companies, Katapult is simple, quick, and transparent. The process is straightforward, the initial payments are low, due dates are flexible, and the application takes seconds to complete. In fact, approximately one-quarter of consumers stated they would buy more durable goods next year if lease-to-own options were available from traditional retailers.
Offering consumers flexible lease-to-own payment options is not only the right thing to do to increase financial access, but it’s also smart business for merchants. Every person deserves choice, access to high-quality goods, and the ability to buy a comfortable mattress – quite literally where dreams are made! Most importantly, lease-to-own can open up a loyal customer segment and incremental revenue stream. Sweet dreams, indeed!
How Katapult Can Help Your Business Reach an Untapped Market
Currently, an estimated 47% of U.S. consumers are unable to obtain items that cost $400 or more, such as mattresses, without alternative payment options, due to cash flow issues. With sky-high inflation gripping the nation, this problem is worsening, as almost all items, including basic necessities such as food, gas, and rent grow increasingly more expensive, and more consumers are forced to live paycheck to paycheck. Katapult, the leading lease-to-own provider that integrates with major omnichannel platforms across industries, helps empower nonprime customers by enabling them to obtain the items that they need through a modern and transparent lease-to-own model.
Many times, nonprime consumers – the consumer group most often in a bind when they must purchase durable goods such as tires, refrigerators, etc. – also have the greatest difficulty paying forthem because they face another barrier: lack of access to credit. Today, half of the adult consumers in the U.S. have a FICO score below 700. Nonprime consumers are regularly left out of the financial conversation, but they deserve to feel seen and included. The good news is that more retailers are recognizing the opportunity that this once-ignored consumer group represents, acknowledging that everyone should have the ability to obtain the items that they need, like a comfortable mattress to sleep on.
By offering Katapult’s lease-to-own as an option to your consumers, you not only are you furthering the financial inclusion discussion and helping nonprime consumers obtain the items that they need when they need them, but you are expanding your customer base, and reaching a new group of consumers who previously had no path to obtain your products and other durable goods. What’s more, Katapult’s lease-to-own customers have high repeat customer rates, and retailers offering this alternative payment solution typically see an increase in both conversion rates and average order value. To sum it up, not only does offering lease-to-own introduce your products to a wider market, it also increases customer loyalty and establishes long-term relationships between buyers and sellers.
You might think that adding Katapult’s lease-to-own solution to your purchase options would require a lot of integration expenses—but that is often not the case. Katapult seamlessly merges with a number of existing point of sales systems and there is no additional equipment required for set-up and maintenance. Katapult also takes on much of the payment risk and funds its retail partners the next business day for products that were delivered to customers. Finally, if a customer wishes to return a product after a merchant’s return policy is up, the product can be returned to Katapult, so there is little risk involved on the merchant side.
Katapult is just as easy for customers to use as it is for retailers. Unlike previous lease-to-own models, Katapult is simple, quick, and transparent – the application is straightforward and the application decision from Katapult can be returned in seconds. It is for these reasons, and because of the choices that are afforded to consumers when lease-to-own is an option, that Katapult and other lease-to-own payment solutions have risen in popularity over the past few years. In fact, approximately one-quarter of consumers stated they would buy more durable goods next year if lease-to-own options were available from traditional retailers. That is particularly significant at a time when big-ticket items are expensive and can account for a large part of a consumer’s budget.
Offering alternative payment solutions like Katapult is not only the right thing to do, it is smart business. Every person deserves choice and the ability to buy the mattress of their dreams (they do spend almost half their life sleeping on it!) without being treated as second-class citizens. At the same time, by including lease-to-own in your payment options you are now on the market for consumers who previously may not have been able to purchase your product. Over time, lease-to-own will continue to be a viable option for consumers in all financial situations, especially nonprime consumers, for obtaining mattresses and other durable goods.