It may seem surprising that consumers are paying for their milk in installments, but PYMNTS research reveals that grocery is actually one of the most common types of buy now, pay later (BNPL) purchases, especially for millennials.
According to findings from PYMNTS’ recent study “The Credit Economy: How Younger Consumers Make Credit Decisions,” created in collaboration with i2c, which draws from a March survey of nearly 3,400 U.S. consumers about their payment habits, finds that, in every generation, more than one in 10 BNPL users’ most recent transaction with the payment method was a grocery purchase.
Moreover, 15% of millennials who pay via BNPL said that their last such transaction was for groceries, and 14% of Generation X consumers said the same. For Gen X, millennials and Gen Z alike, grocery is second only to clothing in terms of share of BNPL transactions, suggesting a growing demand to pay for even basic day-to-day needs in installments.
BNPL providers, for their part, are certainly interested in driving adoption for more kinds of purchases, including grocery.
“Anything that gets back to aligning expenditure with cash flow I think is good for consumers,” PayPal Vice President of Global Pay Later Products Greg Lisiewski said in a PYMNTS TV interview. “And you’ll start to see these solutions penetrate other non-retail verticals.”
Indeed, earlier this year, an Adobe Analytics report noted that shoppers are increasingly using buy now, pay later (BNPL) to buy food, with the grocery industry’s total share of BNPL transactions increasing 40% in the January and February.
“The rise of buy now, pay later usage for groceries tells us that consumers are likely making bigger purchases online to take advantage of special promotions and stock up on staples, thus managing living expenses in more flexible ways,” said Vivek Pandya, lead analyst of Adobe Digital Insights.
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