Consumers in the United States had big shopping goals for this holiday season. Seventy-one percent said they planned to spend as much — if not more — on gifts this year as they did in 2020. As they manage these spending sprees, many consumers have also put a premium on flexibility and being able to stretch their dollars. This change has led them to value solutions such as buy now, pay later (BNPL), which enable them to pay off purchases in predetermined installments while receiving their items or services upfront.
Consumers’ reasons for seeking out BNPL plans for holiday purchases varied. Forty-two percent of those interested in the spending method said that doing so would allow them to treat a loved one to gifts that would otherwise be out of reach. Another 33% said they were facing pandemic-related financial uncertainty and appreciated the flexibility of BNPL, though they expected their outlooks to improve in the new year. Regardless of the motivation, consumers have realized that installment payments could help them treat themselves and their loved ones this season.
The December edition of the “Buy Now, Pay Later Tracker®” examines consumers’ spending plans this holiday and how BNPL options factored into their purchasing habits. It also outlines BNPL’s growing role in the retail space and beyond, and how consumers’ spending habits could evolve in the year ahead.
Around the Buy Now, Pay Later Space
Consumers have grown increasingly interested in BNPL plans in the past 21 months, but the 2021 holiday shopping season pushed this interest to new heights. Recent research found that 21% of adults planned to use BNPL options to make purchases during the holidays, with interest especially high among millennials and those earning more than $100,000 annually. Businesses that offer these spending plans can also see significant boosts, as consumers who use BNPL report spending 30% more on their purchases than those who lack access to them.
BNPL plans are also seeing increased uptake in new markets in Asia, and few are as hot as China. Installment payments are projected to grow more than 51% annually within the nation, and they could total more than $82 billion this year. FinTechs and so-called “super apps” like WeChat and Alipay have been instrumental in driving this increase, and the country’s consumers are also increasingly familiar with eCommerce marketplaces and digital shopping options that allow them to use BNPL.
For more on these and other stories, visit the Tracker’s News and Trends.
Skincare Brand Hivessence of Building Buzz and Business With BNPL Plans
When it comes to standing out in the eCommerce space, small- to medium-sized businesses (SMBs) often have it rough. They can struggle to compete against more established players that have already cultivated strong customer bases, and many also offer premium products that come with bigger price tags — which could scare some consumers away. There is a way for these businesses to appeal to more potential customers and drive sales, however: BNPL plans.
In this month’s Feature Story, David Burrows, co-founder of skincare and personal care startup Hivessence, explains how providing BNPL options can give smaller businesses the resources they need to extend their reach, drive conversions and boost ticket sizes.
PYMNTS Intelligence: Holiday Spending Is Expected to Get a BNPL Boost
BNPL was a big help for many consumers eager to get a handle on their holiday spending this year, with many seeing the payment method as a valuable way to increase their purchasing power without taking on debt and potentially imperiling their finances.
This month, PYMNTS Intelligence examines how more consumers are using installment payment plans to purchase everything from plane tickets to holiday gifts, and considers what this trend means for the future of retail in the year ahead.