Special payment promotions are important to a majority of mattress shoppers these days, a new Consumer Insights Now survey reveals.
The survey of 1,200 consumers who have purchased home furnishings this year or plan to purchase before the end of the year finds that 54% of mattress shoppers say that payment or financing promotions are important to them.
Bedding News Now recently checked in with Christopher Guido, senior director at Bread Financial, to get his analysis of the survey findings. He said that Bread Financial, which is playing a growing role in the mattress retail arena and is showing on the third floor of the Furniture First building on South Main Street at the upcoming High Point Market, also sees strong interest in special payment promotions.
“We’re seeing very similar trends in our own furniture shopper data with nearly half of respondents saying special deals or offers are an important factor in their buying decision,” he said. “Furniture is typically the third-largest purchase for a consumer, after their home and vehicle. Much like those purchases, financing can immediately help increase a shopper’s buying power while also allowing them to stay on budget and purchase the home furnishings they desire.”
The CIN survey found significant interest in payment promotions among all demographic groups, with the strongest interest in three groups — younger millennials (57%), older millennials (54%) and Generation X (59%).
Guido noted that consumers of all ages look for and expect to find payment promotions awaiting them as they shop for mattresses and other home furnishings.
“Financing options aren’t just ‘nice to have,’” he said. “They’re something all generations have come to expect when they’re shopping for furniture. Retailers that embrace offering promotions will be the ones that attract and retain customers, often increasing average ticket sales in the process.”
The survey results identify higher levels of interest in payment promotions from consumers with incomes of $50,000 to $99,999 and higher than from consumers with incomes of less than $50,000, and Guido said a growing number of retailers appreciate the broad appeal of payment promotions.
“Over the last decade, more retailers have realized the importance of offering financing options to their consumers, but there are still many who haven’t embraced these solutions,” Guido observed. “The reality is that retailers can easily implement lending solutions for customers across income classes and credit histories.”
He also noted that affluent consumers are comfortable with financing offers and don’t hesitate to take advantage of them.
“Across all purchasing categories, affluent consumers use financing more than any other consumer segment,” Guido said. “When it comes to furniture, they leverage it to purchase what they need for their homes while managing their monthly budget. They’re usually financially savvy, making them more likely to respond to longer-term plans; they’re looking for ways to maximize offers.”
The survey found that payment promotions for 24 months and no interest are the most popular payment promotions with 33% of consumers, more than for any other offer. Twelve months with no interest is the second most popular choice, preferred by 25% of consumers. The longest offer in the survey, 60 months with no interest, was preferred by 9% of consumers, while 13% of the consumers said they preferred a promotion of six months with no interest.
“Retailers should offer a variety of short-, mid- and long-term financing options,” Guido said. “This is the best way to meet all consumers’ needs. Customers spending $10,000 aren’t going to be interested in a 6- or 12-month plan — they’re looking at something 36-plus months. On the flip side, someone purchasing one or two pieces of furniture may not want to stretch their payments that long.”
The survey found that consumers with good credit, with scores ranging from 690 to 719, were most interested in payment promotions, with 76% of those consumers saying those promotions are important to them. Almost half of the consumers (49%) with excellent credit (scores from 720 to 850) said payment promotions are important to them. That percentage drops to 45% for consumers with fair credit (scores from 630 to 689), and it falls to 40% for consumers with bad credit (scores from 300 to 629).
