A loan is a binding commitment and must be repaid. Please ensure that you are able to make the repayments before committing yourself.

Published on 13/09/2023

High-tech and payment in instalments | A winning combination to boost sales

The High-Tech industry is known for its constant evolution, with one innovation developed after another at lightning speed. But due to shortages in supply and soaring inflation, the market is now more complex. As Deloitte highlighted in its predictions for 20231, the sector is going to have to do more with less! How are these issues impacting on consumer buying behaviour? What strategies can companies in the sector implement to overcome these challenges? Below, we’ll tell you more about solutions and opportunities for High-Tech companies in this complex market.

High-tech and payment in instalments High-tech and payment in instalments

Shortage of materials vs. the boom in refurbished products | A High-Tech sector under strain

The High-Tech sector is experiencing a tough period! Raw material shortages2 and rising component prices have put the market under considerable strain in recent years. Inevitably, this sudden rise in costs has been passed on to the purchase price of new high-tech products. For example, the average price of a smartphone has increased by around 40%3 in 6 years!

However, there are other reasons for this sharp rise in smartphone prices. First and foremost, the market model has changed. While in the past, telephone operators subsidised the initial cost of phones, this is no longer the case for the majority of companies today. The move towards a lower-cost model means they can no longer offer as many subsidies as before. Subsidies accounted for just 21% of the total cost of packages in 2021, compared with 83% in 20124 !

Secondly, manufacturers have adopted a different strategy, offering increasingly expensive smartphones. The average price of an Apple smartphone rose by 7% in Q3 2022. Over the same period, the price of a Samsung phone increased by 2%. A glaring example is the iPhone 13 Pro, which cost €1,159 for the 128 GB model, while the price of its successor increased to €1,329 (with equivalent storage). Counterpoint5 has confirmed that the decrease in smartphone shipments (-12% YoY decline in Q3 2022) has largely been offset by the rise in the average smartphone price, due to the growing trend for 5G smartphones and a market focused on premium models.

How have consumers reacted to this situation? Their reaction has been clear: they are increasingly opting for refurbished products, mainly because they are more affordable. According to a study by YesYes6, 44% of French people have already bought a refurbished product (and this figure is as high as 54% among 18-34 year-olds). Refurbished smartphone sales accounted for around 7% of market share in 2017, but are expected to exceed 14% in 2023!

Shortage of materials vs. the boom in refurbished products

How are higher prices impacting the High-Tech sector?

The case of iPhone and rising prices in the telephone sector

The mobile phone industry is one of the sub-categories of the High-Tech sector most affected by inflation. Taking the iPhone as an example, the prices of the latest models are constantly rising, making them increasingly expensive for consumers. According to a study by Self7, iPhone prices have risen by 72% since their launch in 2007. Prices have even increased by 10% more than local inflation rates! As a result, close to 22% of French people8 would like to use payment in 3 or 4 instalments14 when buying their next smartphone (whether new or refurbished).

Sound & Vision: the impact on Smart TVs

The sound and vision market is also feeling the effects of inflation. In particular, Smart TVs have seen significant price increases, partly due to component shortages. As SP Global9 clearly notes, “inflation cooled global Smart TV demand in Q4 2022 as shipments fall to five-year low”.

Computers: Macs and inflation

Inflation is also affecting the IT market. The pandemic and the widespread adoption of remote working had led to a boost in PC sales. However, by early 2023, sales were in freefall with a 29% drop10 compared to early 2022. Even Apple, which had been coping better than its competitors, reported a 40% decline in Mac sales!

Household appliances: sales remain steady despite rising prices

The household appliances sector is also having to deal with inflation and rising component prices. Every French household is equipped with 7 machines and 17 small appliances on average. According to GFK11, in 2022, sales were down by 2.1%, with a more significant drop for small appliances (4.8%).

Customer experience challenge

BNPL12 to boost sales

Payment in 3 or 4 instalments

Evidently, the effect of inflation is a decrease in purchasing power, which then leads to a change in consumer behaviour. The growing popularity of refurbished products is a prime example of this phenomenon. Consumers are becoming more and more price-conscious and are looking to minimise their spending. How do we encourage these undecided customers to take the plunge and buy that superb, state-of-the-art product? The solution is to offer payment in 3 or 4 instalments!

This is where BNPL12 (Buy Now Pay Later) comes into play! If consumers are given the option to spread their payments over 3 or 4 months, they can make purchases that they might otherwise not have bought without this payment solution. In this way, BNPL12 becomes a growth driver for your business, helping you to maintain steady sales despite any fluctuations in the economy. This omnichannel approach is suitable for all types of stores and e-commerce websites, whether you're a pure player15 or a multi-specialist.

“BNPL12 is a key driver in helping our customers move upmarket. The stat speaks for itself: these payment methods double the average value of the customer basket.”

Maxime Gainnier – Marketing Manager, SFR Mobile Services

Premium demo landing page - FLOA

A tried-and-tested solution

At FLOA, we have the pleasure of working with many High-Tech merchants: Cdiscount, SFR, Welcom, Fnac/Darty, Save, Hubside, Certideal, Easy Cash, Happycash, among others. With our expertise in Buy Now Pay Later solutions, the conversion rate among certain partners has increased by 20%13. On average, these partners are reporting a sales increase of 10%13.

Our Success stories: FLOA Partners case study

BNPL to boost sales

Payment in 3 or 4 instalments | The ideal solution to meet the challenges of the high-tech sector

At FLOA, we offer flexible payment solutions, making it easier for consumers to buy new or refurbished products. By offering customers the option to pay for their smartphones or TVs in instalments, you’ll boost sales while meeting their needs.

In addition, FLOA guarantees payment. We understand how important it is for you, as a merchant, to know that you’ll receive the full amount due, and in as short a time as possible. That’s why we undertake to pay you the full amount within 48 hours16, whatever the amount of monthly instalments. Better still, we cover the risk of non-payment! So you can enjoy total peace of mind, while offering your customers a flexible, secure payment solution.

BNPL12 is the perfect solution to boost your sales in this rapidly-changing market. Opting for FLOA’s payment in 3 or 4 instalments means offering your customers flexibility and ease of purchase, to help them navigate the high-tech world with confidence. Request a demo!

Request a demo

Request a demo

Would you like to try the FLOA offering? Contact our teams for a live demo of our service!

Request a demo

Welcome to the FLOA blog!

Welcome to our blog! 

This blog has been designed to support you on a daily basis. We analyse payment trends, share best practices from all our partners, and inspire you with amazing projects! All this at FLOA!

They trust us!

Logo obvy Logo Vide Dressing Logo Pierre & Vacances Logo CDISCOUNT Logo RED SFR Logo Sport 2000

Request a demo

Would you like to try the FLOA offering? Contact our teams for a live demo of our service!

Request a demo