Gary Rohloff, Co-Founder and Managing Director, Laybuy – Retail Technology Innovation Hub
RTIH: Tell us about Laybuy
GR: Laybuy is New Zealand’s largest buy-it-now and pay-after service. We like to think that this makes the desirable in a responsible way affordable.
We offer customers the option of receiving their purchase immediately, after purchasing it online or in store, while spreading the cost of the purchase over six weeks without interest. Buyers pay the first installment at the point of sale, then choose the day of the week they want the next five payments to leave their account in the next five weeks. Registration is free, there are no hidden fees and it’s always interest-free.
Throughout the platform design process, we have always kept retailers in mind. Not only do we absorb all credit, fraud and chargeback risk on any transaction fully protecting our partners, but our unique Laybuy Global functionality means we can handle all foreign exchange charges on behalf of a retailer due of its multinational capabilities. In short, our service is a win-win for retailers and consumers.
RTIH: What was the inspiration behind the creation of the company?
GR: I spent the first 20 years of my career in banking and corporate finance positions, before moving to retail, where I held several CEO positions at some of the most iconic retailers in the world. New Zealand. The initial idea for Laybuy originated in the early 2000s, when I was running a company called EziBuy (Australia’s largest catalog company).
At that time, we were looking for a way to improve our average order value because we noticed that whatever we tried to do, we couldn’t increase our basket size. However, our managers weren’t too keen on buying now, paying for the service later at the time. The main reason was that we couldn’t do a digital credit check like we can today.
I kept the idea in mind and in 2017 felt the time had finally come to launch Laybuy. My son, Alex (then 20 years old), was instrumental in convincing me to leave the corporate world after 35 years and co-founded Laybuy with him. He convinced me of the need and desire for greater purchasing flexibility, especially among his generation.
RTIH: How has the industry reacted so far?
GR: Since we now have more retail partners than any other supplier in the New Zealand market and have further strengthened our presence with our expansion in Australia, we decided that now was the time to launch. in the UK in March 2019.
Here, the market is dynamic. But yet, while the concept of buy now, pay later is in its infancy, we are rapidly seeing a growth in demand for more flexible, interest-free payment options, and that’s where we come in.
In fact, according to research we conducted in the UK prior to entering the market, the majority of consumers here budget on a weekly basis (31% of the overall population). As we suspected, this reflects budget trends in New Zealand and Australia, around which we have designed our six-week money back offer.
With the intensification of competition in this area in the UK market, there has really been a recent push to demand an increase in payment choices among consumers.
“Genuinely understanding a diverse set of customer needs that continues to grow is an ongoing challenge for retailers, and a challenge that can be exacerbated or even solved by technology.”
RTIH: What has been your biggest challenge / setback?
GR: When we first launched in New Zealand in 2017, our initial plan was to have 200 retailers signed up by June 2019. In the first three months, we were successful in achieving this goal, which we did not. had not planned. This blew up our forecast, which in many ways was a big deal. Basically, we grew so fast that we ran out of leads.
For any early stage, fast-paced business, the ability to access capital when you don’t have a long-standing track record is an ongoing issue. We therefore had to ensure that we met the liquidity needs to cope with this growth.
RTIH: What are the biggest challenges facing the omnichannel retail industry right now?
GR: Behaviors across different channels can vary widely, which means what mobile shoppers want versus in-store shoppers may not necessarily be the same. So, truly understanding a diverse set of customer needs that continues to grow is an ongoing challenge for retailers, and a challenge that can be exacerbated or even solved by technology.
So it’s increasingly important for those of us who support omnichannel retailers to make technology solutions as transparent and intuitive as possible. We want to help retailers solve problems, not make them worse.
RTIH: What’s the best question about your business or the market that you’ve been asked recently, whether by an investor or a client?
GR: The best and one of the most important questions I get asked time and time again is why Laybuy performs a consumer credit check as part of our approval process. There are a number of reasons why we choose to do this.
First, it is a legal requirement in UK that anyone giving consumer credit, who accesses credit bureau data, must leave a credit check. Laybuy is integrated with Experian and provides us with credit and affordability checks to ensure that we are operating responsibly.
The second, which is closely related to the first, is that the introduction of AML / CFT legislation globally requires all credit providers to comply with Know Your Customer (KYC) procedures. Again, our integration with Experian ensures our compliance.
Finally, by performing a serious credit check, we are able to provide data favorable to Experian and therefore have a positive impact on an individual’s credit rating. This means that our customers can improve their credit rating (or, in many cases, move up the credit rating scale) without the need for an interest-bearing credit card or other similar product.
RTIH: What can we expect from Laybuy over the next 12 months?
GR: 2019 is another exciting year for Laybuy. We have already launched in the UK and have key partnerships with Footasylum and ALEXACHUNG, so our main focus is to grow our retailer base here.
We will then aim to expand to other European countries and eventually become the preferred option to buy now, pay later in these territories. We will also invest the same level of energy to continue to develop in Australasia. The next few months will undoubtedly be incredibly busy and stimulating, but I am excited about what the future holds.