New data shows that 71% of BNPL users making more than $100,000 per year increased their use of BNPL in the last year. In the “Buy Now, Pay Later Tracker®,” Dermadry’s Mathieu Mireault tells PYMNTS how affluent consumers are leveraging BNPL as a smarter way to manage their cash.
Buy now, pay later (BNPL) has become routine for millions of shoppers, who use it to finance everything from groceries to dental care to electronics. It has traditionally been thought of as the domain of younger, less affluent generations of consumers who need this service when they cannot purchase items outright — although this is changing fast.
Older, wealthier consumers are quickly adopting BNPL as a means of simplifying financing for larger, big-ticket items and reducing the impact on their credit scores. One merchant experiencing this growth is Dermadry, which sells iontophoresis machines intended to curb hyperhidrosis, or excessive sweating.
“When you’re in university or your early career, $400 is a lot of money,” said Mathieu Mireault, co-founder of Dermadry. “We know what it means to have hard times, and it can be hard to afford this type of solution. So we wanted to make sure that the machine was as affordable for everybody through BNPL.”
Mireault told PYMNTS how the company’s BNPL reach is expanding to older, more affluent individuals and the benefits of this expansion when it comes to merchants’ bottom lines.
Who Primarily Uses BNPL
Dermadry’s primary BNPL demographic consists of younger individuals, said Mireault, although these consumers leverage installments for a variety of reasons. Lack of purchasing power is the most common reason for these consumers’ fondness for BNPL, but a contributing factor is their familiarity with digital payment options.
“The vast majority of people [who use installment plans are] between 25 and 45,” he said. “The main reason is because these are the people who have less liquid capital, simply because these are the people who have mortgages to pay. I also think it’s a generational thing: These people are more used to paying online for credit card [purchases] and having [BNPL] payment plans.”
Older generations are gradually becoming more prevalent BNPL users, however, according to Mireault. They are drawn to the lower credit score impact and ease of use over traditional credit and financing options.
“We have seen that in this present climate, all age groups of people are asking more and more if there are payment plans possible,” he said. “So we of course do see that people who are of older generations are asking for this payment plan option.”
Dermadry is happy to provide these options to its customers, not just for the added sales but also for increased ticket sizes. BNPL is not a silver bullet, however: The product needs to come first.
Benefits of Leveraging BNPL
BNPL proved to be a quick success for Dermadry, with the company seeing both an increase in sales volume and a boost in average ticket size. The true benefit, however, was much more qualitative.
“Ticket size did increase about 10%, but more critically, it increased the general trust toward our brand,” said Mireault. “With the upcoming recession, I can see this kind of thing being something a lot of people are going to be using a lot more.”
BNPL is not a ticket to instant success, warned Mireault. Brands cannot expect to coast on its implementation but must instead continue to put in the legwork of improving their products, customer relations and overall shopping experiences as well as devoting significant advertising to the BNPL service itself.
“Do not think that it’s something magic that you put on your website and your sales are going to skyrocket,” said Mireault. “We have implemented a lot of Google ads, Facebook ads and email remarketing to make sure that our clients know that BNPL exists. When you do any type of marketing … you give them a discount, but if they still don’t buy, you need to understand why they aren’t buying. For all those people who cannot buy because it’s not affordable, those are the people you need to target to make sure they know that the [BNPL] payment plan exists.”
Companies willing to invest in raising customer awareness of BNPL could find it a boon for a long and prosperous future. For those that put minimal effort into marketing, however, the outcome could be the same as if BNPL did not exist.
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