The Stage is Set for Buy Now, Pay Later to Supercharge Holiday Spending and Revenues
What if we said you could grow your revenue by 10% or more this holiday season by doing one thing different?
Merchants who have added buy now, pay later (BNPL) to their checkout seen a 14% increase in overall revenues. With Black Friday/Cyber Monday fast approaching, it represents a major opportunity to test out the new payment option that’s shaking up the world of consumer financing.
Consulting firm Deloitte as well as Mastercard are forecasting at least a 7% increase in holiday spending over 2020 and recent market action backs this up. Home Depot sold out of Halloween decoration early this year foreshadowing an appetite for all things Christmas. Dick’s Sporting Goods is hiring the largest number of seasonal associates ever in its history and Walmart Canada is adding 12,000 people ahead of the 2021 holiday season.
We’ve already seen a host of earnings beat pre-pandemic levels in Q2 including Lululemon, Macy’s and LVMH, and here’s the kicker: Experts say retailers will rely less on discounts and deals this holiday and allow the anticipated demand to drive sales.
And retailers have a good reason to ride the wave of confidence. Recent factory shutdowns, delivery driver shortages and port congestion have created industry-wide supply chain issues. Chances are supply won’t keep up with demand, thus adding to the expectation consumers will see fewer deals. That also means a shopper’s dollar won’t go as far and BNPL can help alleviate that problem by giving consumers more buying power with the ability to spread purchases over four equal, interest-free payments.
Target took a preemptive strike ahead of the Black Friday/Cyber Monday frenzy and began its holiday sales campaign on Oct. 10. Zip U.S. is doing the same by running its four-day shopping extravaganza, ZipFest, from Oct. 21-24. Zip, the fastest growing BNPL company in the U.S. (now available in Canada) and ranked #2 in BNPL apps, saw transaction volume grow by 20% during its inaugural event last April over the previous month. Over 40% of purchases were also made by first-time customers to the Zip brand.
In Canada, Zip found outstanding credit card balances have declined 13.6% year over year, echoing the overall decrease in credit card use and applications. BNPL payments are estimated to grow in Canada by 41.1% and reach $4.6 billion in 2021, and you can expect the holiday season to play a huge part.
Around the globe customers are demanding BNPL. That’s why Amazon Canada added it in September, why PayPal bought Paidy and why Target now offers not one, but two BNPL providers. It’s seamless to integrate into your checkout online and instore, and opens up consumer financing to a whole new demographic of shoppers – especially millennials and Gen Z. The stage is set, so let Black Friday, Cyber Monday and the rest of the holiday season show you what BNPL can do for your bottom line.
It only takes 10 minutes to get set up with Zip BNPL. Get started here.