The Top 500 retailer buys Campus Deals, which offers mobile coupons to college students.
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Bill Me Later is a billing service from Bill Me Later Inc. A shopper who chooses this option clicks the Bill Me Later icon during the checkout process, enters date of birth and last four digits of a Social Security number, then receives an e-mailed invoice within five to 10 days. At that point, the shopper can pay through BillMeLater.com in an automated clearinghouse direct debit transaction, through a bank bill-pay system or by mailing a check.
Bare Necessities offers its customers Bill Me Later as the only payment alternative to major credit cards, though it is considering eBay Inc.’s PayPal third-party payment service and Google Inc.’s Google Checkout, which can be tied to Google search marketing programs.
To participate as a merchant listed on BillMeLater.com, Bare Necessities also works with the comparison search engine Become.com, which powers Bill Me Later’s comparison shopping feature. Shoppers on BillMeLater.com can search for a product to produce a list of merchants that accept Bill Me Later payments.
Bare Necessities uses its internal technology and marketing personnel to manage bids through Become.com for placement in search results on BillMeLater.com. Although it pays search fees to Become.com in addition to commissions on the value of purchase transactions to Bill Me Later, Bare Necessities has realized a strong return on investment, Lim says.
“We’re getting good ROI and have been pleased with our customer acquisition opportunities,” she says.
At Etronics Inc.’s Etronics.com, a retailer of consumer electronics, customers’ interest in paying without credit cards led it to develop its own web form a few years ago for accepting check payments. Customers chose check payment as an option in the checkout process, then received an order number and an address to which to mail their check. Etronics would ship orders after checks were received and cleared, but the system became more trouble than it was worth because of paper-handling chores and the tendency of shoppers to call asking about their order before the check had cleared, says Mayer Balser, co-founder and chief operation officer.
Etronics recently dropped its check-payment form in favor of eBillme, a service from ModaSolutions that offers shoppers the checking payment option without having to deal with paper or long settlement periods, Balser says. EBillme, which guarantees payment to the retailer, e-mails purchasers a bill with a note to pay through their personal bank bill-pay system, where shoppers can view and manage their bills. “EBillme lets me get more of that consumer market,” he says.
Etronics also offers Google Checkout and PayPal as payment alternatives. As other retailers have learned, promotions tied to these services as well as consumer interest in non-card payments have helped to drive business. Promotions such as free shipping, $25 rebates and free boxes of chocolates from 1-800-Flowers.com have won over customers to the alternative payments, Balser says.
Growing customer base
At LuggagePoint.com, Bahnote says promotions such as the $10 coupon Google Checkout offered on a $50 purchase led to a sharp increase in his number of customers. “With promotions year-round, we’ve seen a huge increase in our customer base,” he says. “30% of our customers used Google Checkout during early promotional period, and many of them still do.”
But other retailers say the temporary surge they get from any one payment method is all the more reason to offer additional methods and offer customers what they want. ShoppersChoice.com offers PayPal, eLayaway, eBillme and Western Union in addition to Google Checkout, and it plans to offer Bill Me Later now that it has met the vendor’s minimum of $10 million in annual sales. (Bill Me Later says it plans to serve smaller retailers beginning later this year.)
“Google Checkout went like wildfire when people first signed up, when Google was offering a kickback of $5 to $10, but since then it has slowed down,” Hackley of ShoppersChoice.com says. “Google Checkout is cheaper, but not everyone wants to sign up for it. That’s why we have tons of payment options.”
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