How Buy Now, Pay Later Fuels Growth
Buy now, pay later is here to stay. Here’s what that means for retail.
Once conceived as a financing solution for big-ticket items, buy now, pay later is now firmly entrenched in many consumers’ lives. This is especially true among younger consumers, some of whom have turned to buy-now, pay-later options like Afterpay as their lending solution of choice.
in spending via Afterpay (a buy-now, pay-later service) among Millennial and Gen Z buyers. 9
Buy-now, pay-later purchases of travel tickets surged 1,430% from 2022 to 2023. 10
Buy now, pay later spending on grills, patio furniture, and other outdoor goods increased 368% from 2022 to 2023. 11
Small-ticket items, like trash bags, lighter fluid, blushes, and bronzers were among the fastest-growing purchases using buy now, pay later from 2022 to 2023. 12
The ability to finance purchases, large and small, offers numerous advantages for consumers. Chief among these is greater control over their cash flow: With the ability to pay for purchases over time, shoppers have more options to maintain their purchasing behavior amid temporary fluctuations in their incomes. As the cost of living continues to increase, buy now, pay later later can bring luxury goods within reach for a broader range of consumers and help shoppers make the most of their discretionary incomes.
Buy now, pay later is quickly becoming a baseline expectation for today’s consumers. More and more retailers — especially ones looking to court younger shoppers — have looked to buy now, pay later to gain a competitive edge.
of retailers now accept buy-now, pay-later options, such as Afterpay – a figure that’s increased 10% since 2022. 13
Offering buy-now, pay-later options can help retailers bring in more business by making purchases more accessible to a broader range of consumers.
than traditional shoppers. They also spend an average of 40% more per transaction compared to traditional shoppers. 14
Buy now, pay later can help retailers manage risk within their businesses. With Afterpay, for example, retailers are paid in full at the time of purchase. Afterpay also works with a company’s return policy, so retailers can offer flexible payment options while retaining control over returns.
Three questions to ask to find the right solution for your business:
Look for solutions that help you meet customers where they are, with the ability to offer flexible payment terms for purchases made via eCommerce or in person.
The ideal solution should make it easy to understand the merchant fees for each transaction. Ideally, it will charge you only when a customer makes a purchase using the solution.
Customers’ interaction with a buy-now, pay-later solution can influence their perceptions of your brand. So look for a solution that offers responsive, helpful support both to you and your customers.
Fort Worth Barber Supply is a barber supply that offers a comprehensive line of styling tools and necessities. With a wealth of barbers and customers shopping in their store and the costly investment of high-end tools, the business adopted Afterpay to help their shoppers tend to their needs in a flexible way.
What we love about offering Afterpay to our customers, it allows them to manage their cash flow better. Afterpay allows you to break up your total into four payments, and it’s really helped us because the barbers can now make larger purchases and then the customer has six weeks to pay it off. We get paid right away, they get to base it out, and everyone wins.”
