core mission is to deliver honest financial products that improve people’s lives. Credit shouldn’t be scary or deceptive, but once lenders saw how profitable it could be, many Americans found themselves deep in credit card debt and no closer to the life they wanted. Affirm changed that. They've taken what was once an ambiguous world full of deferred and compound interest, hidden fees, and fear, and turned into a clear, simple world full of new consumer possibilities.
In every loan Affirm issues, there are three actors who are important stakeholders in the transaction:
1. Merchants who have goods and services to sell.
2. Borrowers who are looking to make a purchase from one of those merchants.
The initial thing that makes this relationship special for all parties involved is the shared value created for each party in the transaction. Merchants happily pay a small fee to Affirm for their ability to increase the merchant's conversion rates and average order value. Users happily pay a small fee in the form of interest for the access to credit who, in many cases, would not otherwise have access. And Affirm is happy to generate revenue from each transaction to improve our existing products and continue innovating on many new financial products to come. This relationship works incredibly well for most, but for some users, we thought Affirm could do even better.
To do that, Affirm created Affirm Offers – a product centered around a select group of merchants where consumers could shop nearly interest-free, and in many cases, no interest at all. How do they do this? It turns out that many merchants have economics that enables them to “cover the interest” for the customer who’s looking to make a purchase. For the user, this is a no brainer. Not only do they save on interest, but they can also enjoy the luxury of being able to smooth out their purchases over time. All of this whilst never being fearful of retroactive interest that commonly accompanies these “too good to be true” offers from other lenders. Once Affirm had everyone on board and excited to shop, they had to determine the best way to showcase those special low-interest merchants to their users.
The Affirm design and research teams set out to study how consumers made past considered purchases, as well as how they were planning to make these purchases in the future. Along the way, we learned a few valuable insights that influenced the product you see today.
1. Sometimes customers have a very specific merchant in mind that they plan to shop with – they know they want to purchase a Sonos speaker. They'd like to know if Affirm has specifically partnered with Sonos for a low-interest offer. For that, we positioned the search filter right at the top of the experience.
2. Merchants would gladly have the option to pay for premium real estate for improved visibility. This was a perfect opportunity to monetize our personalization efforts by starting to predict where you might be interested in shopping based on past purchase behavior. For that, we created the Featured section.
3. Many considered purchases were previously made around a considerable life event experienced by the customers. That could be anywhere from upcoming holiday purchases to summer getaways to a new home, or even a new family member on the way. For this, we created curated, hand-picked collections of merchants and titled them Plans, projects, and surprises.
4. Sometimes they don’t have a specific use case in mind – they just wanted to hunt for a good deal. Users wanted to browse “the old way”, as they saw merchants grouped in a traditional brick and mortar retail location. For that, we rounded out this version of the experience with familiar categories that they could browse.
All in all, and in classic Affirm fashion, the experience was well-received by all three parties involved. Users for their ability to find new or existing merchants that fit their need at exceptionally low interest rates. Merchants for their ability to be showcased not only by category but by life events where they’re best suited to fit the customer’s needs. And Affirm, for the privilege to keep delivering on their mission to build the best financial products to improve the lives of their customers.