January 7, 2016
Amazon made a bold move to compete against the UK’s high-street furniture and electrical retailers by introducing a new program for its UK shoppers. Its customers can now opt to take out a loan on Amazon for purchases worth £400 and more.
The US giant, led by founder Jeff Bezos, will offer shoppers the option of paying for their purchase over as many as four years. Customers are charged a rate of 16.9% on the loans, which can be taken out on multiple items as long as the total is £400 or more. Customers would not need to pay a deposit, which means that the first payment was their opening monthly installment.
Hitachi Capital Consumer Finance will be in charge of the retailer's loan services. Hitachi also offers interest-free credit on furniture for John Lewis.
Clients receive the pay monthly option at the checkout page on Amazon's website under a comprehensive list of payment methods. Buyers may apply for a credit, which determines if they are eligible for the loan or not.
In a statement, Amazon said to the Guardian, The new Amazon Pay Monthly program provides our customers with further payment options to suit their needs when shopping on our website, and it is easy, convenient and offers competitive rates and flexible terms.
The UK is believed to be the first country to receive Amazon Pay Monthly, which will only apply to goods sold and dispatched by Amazon itself, though shoppers in the US can buy on credit using an Amazon store card.
Gerald Grimes, the Managing Director of Hitachi Capital Consumer Finance, said, Our new trial with Amazon is all about giving people the fastest and most seamless experience when it comes to point-of-sale credit.
It means you can go straight from choosing a new dishwasher or fridge to accessing finance options through Hitachi Capital to pay monthly, all while staying on the Amazon website. This means no visible break in the customer journey.
Amazon is famous for its ‘1-Click’ service, allowing you to place an order literally at the click of a button with pre-stored payment details and delivery addresses. This is part of boosting that customer experience and could signal huge changes for the online retail industry.
Amazon has implemented a series of customer-care initiatives to upgrade its customer experience.
The American online giant now offers a one-hour delivery service in some areas. Earlier this week, Amazon's UK boss Christopher North said that he plans to expand the firm's pantry service which sells 4,000 brands including Branston, Coca-Cola, Heinz and Kellogg's.
The group’s Pantry service—which was launched in Britain in November—will be beefed up in 2016, adding new product lines, according to Christopher North.
In the UK, the service only offers items like canned and bottled products; in America, it is testing a fuller service selling fruit, vegetables and meat, called AmazonFresh.
Amazon recently announced that more than 23 million items were ordered worldwide from sellers on Amazon on Cyber Monday, a more than 40% increase year-over-year.
In 2015, Amazon came up with a lot of payment programs. Amazon has been trying really hard to compete with eBay and now, with the new PayPal. There has also been some recent success for the company in this space: the Login and Pay with Amazon feature seems to be gaining traction. Recently, Amazon announced the launch of the Login and Pay with Amazon feature in mobile apps as well.
It is clear that the retail giant is here to stay and will not accept failures.