Gary Rohloff co-founded Laybuy with wife Robyn just two years ago and has already signed up 375,000 people in New Zealand, a country of 4.7 million people, to the platform.
Laybuy allows consumers to spread the cost of purchases over six interest-free payments, with the first being made at the point of sale. It has already partnered with fashion retailer Footasylum, its first big-name client in the UK.
The option to pay by Laybuy is now available to Footasylum customers on its online store, with the in-store payment option being launched in its 70 UK high street stores later this year.
Managing director Gary, 57, global brand director Robyn, 56, and son Alex, 22, are now based in the UK as part of a team of eight as they look to cement the retail credit system on these shores before exporting it to Europe and the United States.
“Footasylum took about four months to get done but they’re a great brand for us. We’ve now got a lot of other big-name retailers in the pipeline who now see the validity of what we’re doing,” Rohloff told BusinessCloud.
“Visa and Mastercard are the traditional payment methods and we sit alongside them now. Our dream is to be the chosen payment method for consumers because it’s a better way to pay.
“When Visa and Mastercard were introduced and cheques were phased out, retailers were loath to accept it – but there isn’t a retailer on the planet that doesn’t accept a credit or debit card today, especially in the Western world.
“Without being disrespectful to the retail community, retailers tend to follow the crowd. As soon as one name does it, they all want a piece of it. But no one wants to be first!
“We have circa eight per cent of the voting public in New Zealand on our platform. If we were to achieve that same growth in 18 months in the UK, we’d have somewhere around two and a half million consumers.”
Gary struck out on an entrepreneurial career after 18 years as CEO at three of New Zealand’s biggest retail brands: Number One Shoes, Warehouse Stationery and EziBuy.
“I was running EziBuy back in the early 2000s and said ‘look – there’s got to be a better way of doing this where customers can take the product today and pay it off interest-free,” he said.
“The merchant absorbs a small cost but they’ve sold the stock up front – and the consumer isn’t getting into any debt spiral because there’s no interest and it’s over a short period of time. That’s the premise of Laybuy.
“Our goal when we set this business up was not to be a finance or tech company. Brand is all about being a lifestyle enabler. The internal strapline we use to describe that to our team here is ‘we make the desirable affordable’.”
On average, retailers partnering with Laybuy have seen an increase in order value of 60 per cent, an increase in online and in-store conversion rates of 50 per cent and an increase in new customer acquisitions of 30 per cent.
Describing payday lenders as “pretty irresponsible”, Gary gives two examples of why Laybuy benefits consumers as well as businesses.
“A mum emailed us to thank us because she’d been able to buy her children a raincoat each at the start of the winter. She couldn’t afford NZ$120 for two raincoats but could afford NZ$20 for six weeks,” he revealed. “There was also a dad who told us he was overjoyed because he could buy his boys rugby boots at the start of the season for the first time.
“Like you, I’m fortunate to have been able to afford to buy things for my kids as and when they needed them, but the harsh reality is we live in a bubble, you and I… most people in the UK budget their finances weekly – and the second most popular is daily.
“Life is expensive; add some little children to the mix and it gets worse.”
Laybuy absorbs all credit risk on any transaction, safeguarding its retail partners, and also handles all foreign exchange fees on a retailer’s behalf. Users must go through an Experian credit check while Laybuy says it protects shoppers from self-imposed debt by freezing the accounts of those who fall behind on their payment schedule.
Gary and Robyn’s other son James works in the business’ New Zealand office, which employs 18 people, with two people based in Australia. The company raised eight figures of private equity funding in New Zealand dollars last year.
Gary says that spreading the word in the UK has been harder than it was in New Zealand and Australia, where he had extensive networks of business leaders keen to support the concept.
“However we’ve partnered with people like [PR agency] Tyto who have helped us raise the awareness of who we are and introduced us to a number of different people. We’re slowly but surely making traction,” he said.
“We’ll be live in certain European countries and the United States by the end of this year.”
On the move from an executive career to leading a tech start-up, he said: “Every day counts. We worked seven days a week for the first 18 months of our business because that’s what it took. That’s what drives you.
“Our dream was to establish a ubiquitous global brand – when people talk in the future they say ‘you Google it, you Uber it, you Laybuy it’. It’s about having a big, hairy audacious goal and going for it.
“But we’re not going to achieve that goal by sitting on our bums drinking beer. I’ve got enough gas in my tank to keep running hard and I’ll do that. It’s exciting – it’s an adrenaline rush.”