The payment card network says the platform will provide retailers with another way to acquire customers.
In the past year, Purchasing Power, a retailer of consumer electronics and home furnishings and travel and education services, has more than doubled its product selection. It’s also looking to expand its number of corporate clients, with whom it arranges payroll-deduction programs for selling to its clients’ employees.
A good way to build a loyal customer base, Purchasing Power has learned, is to offer customers a simple way to pay for products over time without paying interest—and without having to write a check, set up an online payment, or apply for credit.
Since 2001, Purchasing Power has been working with corporate clients like Delta Air Lines Inc. and The Home Depot Inc. to set up employee benefit programs that let employees purchase things like refrigerators, living room furniture, TVs and digital cameras, with payments automatically deducted from their paychecks. “We lock in loyal customers,” says Scott Wheeler, Purchasing Power’s chief operating officer. “And for our clients, it’s helpful for employee morale and financial wellness” as employees can purchase items for their homes without running up balances on high-interest credit cards.
"The ability to purchase big-ticket items, whether it's flat-screen TVs [or] computers, and be able to do it through payroll deduction allows employees who are certainly budget-conscious to not have to buy something all at once. And the quality of the products that we see on the Purchasing Power web site are excellent,” says William Pryor, senior vice president of human resources for Cape Fear Valley Health System in Fayetteville, NC.
In the past year, Purchasing Power more than doubled the number of products and services it sells—to 7,500 and counting, from about 3,000—while adding new areas such as vacation packages, college courses and professional certifications, Wheeler says. The company, which is privately held and owned by Rockbridge Growth Equity LLC, doesn’t report financial figures. But it says it has handled more than $1 billion in customer orders through payroll deduction since 2001, mostly from consumers who work at companies with 1,000 or more employees.
To handle its expanded range of offerings and growing number of customers while also making its e-commerce site easier to shop, the company recently relaunched its site on technology from hybris Software, a unit of business software company SAP AG. The new web site, which replaced a home-grown version, was deployed with help from e-commerce design and development firm Crown Partners. Crown integrated the site with the Oracle Corp. business software that Professional Purchasing runs for such operations as accounting and order management.
Purchasing Power also works with CommerceHub, which provides connections to suppliers that drop-ship items as they are ordered. Those suppliers fulfill nearly all of Purchasing Power’s orders.
Purchasing Power chose the hybris platform for its ability to handle the company’s increases in number of products and sales, Wheeler says. Along with those increases, he adds, is the need to process information including credit risk profiles and methods of payroll deduction for a growing number of participating employees. Getting employees set up in its system accurately is vital to Purchasing Power’s business model, Wheeler adds.
The company earns all of its revenue through retail sales to its clients’ employees; it charges no fees to the participating employers. And in the rare cases when an employee can’t make payments on a purchase, Purchasing Power will simply take back the purchased product, if available, and absorb the loss, he adds.
Setting employees up in the system can vary widely by each corporate client’s rules of employee participation—such as employees with one year or more of service—and each participating employee’s approved spending limit and frequency of payroll deductions.
Purchasing Power’s old web site required manual software coding to set up new participating employees. But the new site comes with more than 30 pre-configured settings to accommodate multiple combinations of spending limits and payroll deduction schedules. That has simplified and accelerated the process of onboarding employees as well as new corporate clients, Wheeler says.
Among the improvements to the site’s shopping features, he adds, are improved search and navigation for products based on thousands of brand names, a faster checkout process for returning customers, and more online customer service tools. Online shopping features also include detailed buying guides for products like musical instruments, Nikon and Sony digital cameras and Simmons mattresses.