Buy now, pay later – financial flexibility for Frasers’ customers
Who are Studio Retail and Frasers Group?
Studio Retail is a prominent retail company offering a diverse range of products, including fashion, homewares, and electronics. It is part of the Frasers Group, known as a leader in the UK’s retail sector, constantly evolving and innovating in areas of store experiences, digital and product. The Group is made up of a number of well-known high street and online retailers, including Sports Direct, Game, Jack Wills and House of Fraser. Under the leadership of CEO Michael Murray, Frasers Group has been expanding its financial services, notably through the introduction of a Buy Now, Pay Later (BNPL) solution to enhance customer purchasing flexibility.
The Expansion of BNPL Solutions
BNPL solutions have gained significant traction due to their ability to offer consumers financial flexibility. These services allow customers to divide the cost of purchases into manageable instalments, often without interest if paid on time. The increasing cost of living and a shift towards digital financial services have driven the popularity of BNPL, making it an attractive option for consumers seeking alternatives to traditional credit card debt.
Growth in BNPL Uptake in 2023 and 2024
The BNPL market is experiencing substantial growth, with predictions that it will become a €300 billion industry in Europe by 2025. In the UK, BNPL services accounted for £1 in every £8 spent online in early 2023, underscoring their increasing popularity. This growth is expected to continue as more consumers turn to BNPL solutions due to economic pressures and the convenience they offer.
Benefits for Retailers and Consumers
Retailers benefit from BNPL solutions through increased sales and customer loyalty. By offering flexible payment options, they can attract a broader customer base and increase the average order value. Consumers enjoy the ability to make purchases without immediate financial strain, which is particularly appealing during economic uncertainty. BNPL services also provide a transparent and straightforward repayment process, enhancing the overall shopping experience.
Frasers Group's BNPL Initiative: Frasers Plus
Frasers Group has launched its own BNPL service, Frasers Plus, allowing customers to defer payments on purchases up to £2,000 across its brands. Unlike other BNPL providers like Klarna or Afterpay, Frasers Plus integrates a rewards system, offering points to customers using the service, enhancing customer loyalty and engagement.
Role of DeeperThanBlue in Developing the BNPL Solution
DeeperThanBlue played a crucial role in building the BNPL solution for Frasers Group Financial Services (FGFS). They collaborated to enhance the suite of Frasers Group websites by integrating new credit facilities. DeeperThanBlue provided consultancy and development resources, with the DeeperThanBlue team working alongside FGFS to understand the existing functionality and to scope the requirements of the upgraded system.
The proposed solution would empower Fraser Group customers to seamlessly purchase products via BNPL credit options alongside existing checkout methods. This integration increases financial flexibility for customers, enabling immediate purchases with deferred payment, thus enhancing their shopping experience and loyalty to Frasers Group websites.
The backend development process utilised Java Spring Boot, implementing best-in-class practices such as microservices architecture, dependency injection, and embedded servers. Spring Boot’s flexibility and reliability were pivotal in creating a seamless and secure payment provider, ensuring smooth transaction processing for Frasers’ customers. The development phase emphasised scalability and efficiency, preparing the system for high demand and future growth.
To ensure optimal performance and reliability, the solution was deployed in a containerised environment using Kubernetes. The Kubernetes environments were split across different cloud providers which included Rackspace’s private cloud for production and on Amazon AWS using the EKS service for the Test environments. This approach allowed for seamless scaling and management, ensuring the system could handle varying loads with ease. Kubernetes’ orchestration capabilities were instrumental in maintaining high availability and robustness of the solution.
The DeeperThanBlue testing team conducted comprehensive performance and load testing on the solution. They developed a cost-efficient, scalable, and on-demand performance test solution using JMeter containers managed and orchestrated through Kubernetes on Amazon AWS EKS. Performance metrics were captured in Prometheus and delivered for analysis via Grafana dashboards. By running JMeter in Kubernetes, DeeperThanBlue simulated real-world usage scenarios, identifying and mitigating potential bottlenecks before they could impact end users. This rigorous testing ensured the system’s readiness for live operation, providing Frasers Group Financial Services with a reliable and efficient credit service.
Conclusion
The implementation of the BNPL solution by Studio Retail and Frasers Group, with the support of DeeperThanBlue, represents a strategic move to align with evolving consumer preferences and enhance the shopping experience across its brands. As the BNPL market continues to grow, Frasers Group’s innovative approach with Frasers Plus, supported by robust development and testing processes, positions it well to capitalise on this trend, offering both retailers and consumers significant benefits in the current economic climate.