How the Pandemic Cleared the Runway for Buy Now, Pay Later
When the world’s largest online retailer, Amazon, finally announced to the world on Aug 27, 2021 that it will offer buy now, pay later (BNPL), you know the way we shop is indeed changing.
We did a survey last year and it foreshadowed this inevitable change. Retailers who adapted quickly to these clues got a head start, but it’s far from too late – Amazon is proof. Here’s what we discovered and why retailers need to pivot or risk being left behind.
Most are still won’t travel, but they are spending big time.
Last year 60% of Americans said they expected to stay within their city and while restrictions have eased, people are still cautious about vacations. The money saved from staying home is pouring into retailers as the economy reopens.
Both Macy’s and Kohl’s have crushed earnings in both Q1 and Q2 of 2021, along with many other big names like Foot Locker. All three retailers also surpassed pre-COVID revenues, signaling a true resurgence in consumer spending.
Over a third are more conscious of “non-essential spending” due to COVID-19.
With people being more financially aware, the timing for BNPL couldn’t be better. By splitting purchase into four equal, interest-free payments spread over six weeks, it helps millions to budget and continue spending wisely during these still uncertain times.
Zip BNPL customers said they’ll actually spend more!
Last year 44% said they would spend less on gifts, but 30% of Zip customers said they would spend more thanks this flexible payment option. Bumpboxx, an urban audio lifestyle brand, saw a 200% increase in sales volume after launching BNPL with Zip. It’s a smart way to win customers without resorting to steep discounts.
BNPL has fastest future growth of ALL payment types
With Amazon jumping into the BNPL game in late 2021, we’re not the ones realizing it’s here to stay. Here’s what world renown consulting firm McKinsey and Co. had to say:
- 60% of consumers will use point-of-sale financing over the next six to 12 months.
- BNPL acceptance grew 300% to 400% in 2020 resulting in $15 billion in financed sales.
- By 2023, BNPL will make up $90 billion annually and generate $4-6 billion in revenue.
Learn more about BNPL now!