Ice.com is finding that online shoppers are willing to pay more for an expensive piece of jewelry if they have more options to purchase the merchandise.
For Valentine’s Day shopping this year, Ice.com’s average ticket increased by 25% to $185 from $148 on Valentine’s Day 2004. The reason for the increase is because Ice.com, No. 178 in the Internet Retailer Top 400 Guide to Retail Web Sites, offered its shoppers different ways to make a purchase, including an offer for free financing, says CEO Shmuel Gniwisch. “We promote our free financing offer heavily on the site and in e-mail promotions, especially during key holidays such as Valentine’s Day,” he says. “It makes a difference.”
Over the Valentine’s Day shopping season, Ice.com processed about 39,000 total orders. Of those orders, between 35% and 40% chose free financing. “We had higher tickets because we gave customers more incentives to make a purchase using an alternative payments program,” Gniwisch says.
Ice.com says customers can use free financing on a wide combination of big ticket purchases. “We’ve assumed the risk and offered free financing on orders over $5,000,” Gniwisch says. The free financing offer applies to credit card purchases. Multi-payment orders also are pending until credit approval from a credit check. When a customer makes a purchase using free financing, Ice.com charges the customer’s credit card the first month’s payment along with sales tax and shipping and handling. The balance is then automatically billed to the customer’s credit card in equal monthly installments starting the same day one month from the date the product was purchased. Orders for family and personalized jewelry products aren’t included in the program, Ice.com says.
Ice.com is comfortable offering qualified customers free financing because it operates a very sophisticated payments processing and fraud prevention program, Gniwisch says. “We are willing to take a higher risk,” he says
Ice vice president of risk management Ezzie Schaff is a speaker at the Internet Retailer 2006 Conference & Exhibition June 5-7 in Chicago on the topic of Taking Security Into Your Own Hands.
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