Catching on first in eCommerce, buy now, pay later (BNPL) is working its way into physical stores as shoppers venture out more and seek affordable ways to pay when they do.
With a few years of BNPL experience and data to work with, players in the sector are recognizing the retail benefit installments represent, be it higher sales or increased loyalty.
“Shoppers are looking for great products, they’re looking for great experiences, and they’re doing that agnostic of channel,” Janessa LaCombe, senior program manager at Sezzle, told PYMNTS.
Punctuating her point, LaCombe said that Sezzle’s underlying merchant sales (UMS) for in-store purchases rose more than ninefold year over year in the fourth quarter and that in-store sales accounted for 10% of total UMS in December.
“It’s growing exponentially as consumers continue to want service on their terms,” she added.
That applies as much for the financially worry free as it does for those who are struggling financially. PYMNTS research found that “financially secure consumers who use BNPL see it as a tool for improving their buying power,” with 59% of worry-free consumers who use or would like to use BNPL seeing it “as a payment option that makes them more likely to shop” in stores offering it.
Get the study: Why Financially Worry-Free Consumers Still Want Alternatives to Traditional Credit
70% More SMBs Go With BNPL in Past 60 Days
Acknowledging that most sales still happen in brick-and-mortar stores and not on eCommerce sites, LaCombe said that onboarding new physical merchants is “one of our top priorities as a company.”
The Sezzle Virtual Card powers in-store purchasing for the BNPL platform, offering consumers and merchants that accept the payment method tap-and-go installments capability. Moreover, LaCombe said she sees it as part of the fully formed omnichannel strategy that all merchants now need.
“Making sure that buy now, pay later is reflected in your omnichannel strategy as a merchant makes sure that your ecosystem is more meaningful, where the whole becomes greater than the sum of its parts,” she said. “Adding [the BNPL] option increases engagement across all channels and gives a true omnichannel shopping experience.”
That engagement is happening more as word spreads of BNPL availability inside stores.
“The easier we can make it for the shopper and the merchant is where we see the best results,” she said. “We have our virtual card, which really is the vehicle that unlocks buy now, pay later as an easy, digital and touch-free option.”
She added that in one survey, 62% of BNPL users “made the decision to use it while in the store” standing at the checkout.
Read also: Merchants See Financially Worry-Free Consumers as Growth Area for BNPL
Double-Digit Loyalty
Installment credit in brick-and-mortar stores is a natural, and merchants are finding that offering the option can boost everything from receipts to satisfaction.
“Loyalty is one of the best parts of this buy now, pay later unlock for brick-and-mortar merchants,” LaCombe said. “We’re seeing 12.9% higher repeat rates for in-store with Sezzle versus having Sezzle on [eCommerce] alone. Adding buy now, pay later increases loyalty anyway, but when you see a double-digit increase like that in-store, I think that’s really powerful.”
Small- to medium-sized businesses (SMBs) are among the keenest retail category to bring in BNPL, and that’s a trend LaCombe said she sees in Sezzle’s data as well as the wider industry landscape.
Pointing to strong SMB growth for Sezzle in 2022, she said “even our larger retailers and merchants [are] looking at their business through the changing lens of the consumer demographics. We’re going to see a lot of merchants viewing [BNPL] options to help some of their consumers … in a more underserved space, especially when it comes to traditional credit.”
See also: How Buy Now, Pay Later Payments Create New Merchant Opportunities
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More