When Build.com introduced a private label financing program in November 2017, the retailer sought to entice its shoppers to spend more with a set of new credit card payment options. The new choices impressed shoppers: in the program’s first week, Build.com saw ticket sizes triple versus purchases made with typical credit card payments.
Additionally, by offering customers what’s essentially an open line of credit, the online home improvement retailer is anticipating longer-term benefits: increased repeat purchases.
The Build.com Financing Program, developed by Vyze, is designed to give customers more purchasing power. Consumers complete a single credit application to make purchases with special financing on any purchase above $500. Shoppers can choose to apply for and use Build.com credit through the Build.com site prior to purchase as well as via the Build.com call center.
“We see the people that would benefit from this as the credit-savvy individuals that understand the offer that we’re giving,” said Cory Iler, Project Manager at Build.com in an interview with Retail TouchPoints. “They apply for the card to get the deferred interest on it, but when they go to make another purchase from a Wayfair or The Home Depot the idea is that they’ll remember they have that card and come back to us for their second, third and fourth purchase for their home. We see a lot of one-and-done customers, so this was really something that we used to try to build that loyalty and bring that customer back to us more than one time.”
Build.com customers most often shop the retailer for large purchases around major home remodels, and occasionally for additional smaller product purchases. But according to Iler, if customers forgot specific items that they needed to buy subsequently, they are more likely to shop locally versus returning to Build.com. By giving consumers their own line of credit, Build.com incentivizes shoppers to make their entire purchase on its site, whether it’s part of a major order or a smaller add-on.
New members get a 15% discount on their first order with a Build.com credit card, while all members get free standard and freight shipping. These members even can earn interest-free options if they pay off their purchase in full within six or 12 months:
- No interest if paid in full within six months on purchases of $500 to $999.99;
- No interest if paid in full within 12 months on purchases of $1,000 or more; and
- Interest is charged to the shopper’s account from the purchase date if the purchase balance is not paid in full within the six or 12-month promotional period, or if they make a late payment.
Build.com moved to the Vyze financing platform for two major reasons. For one, with a single integration from Vyze, Build.com gained access to multiple lenders across the credit spectrum to serve all its customer demographics, along with the technology needed to support continuous growth. Secondly, it enabled the retailer to take a “waterfall approach” to handling lenders.
“We have two banks working with us,” Iler said. “If the shopper doesn’t get approved with the primary lender, then they move on to our secondary lender. The approval rates that we have will be equal to, and sometimes even greater than, what brick-and-mortar stores are seeing. We’re competing with people applying for the Home Depot card in-store, and we’re actually getting better approval rates.”