Retailers Resolve to Even Up Online and In-Store Experiences in 2025

While holiday spending may have filled merchants’ coffers, the challenge will be to keep consumer momentum going at the registers, particularly at brick-and-mortar stores.

The PYMNTS Intelligence report “2024 Global Digital Shopping Index: U.S. Edition,” created in collaboration with Visa Acceptance Solutions, found that about a third of United States consumers are Click-and-Mortar shoppers, choosing experiences that work convenient digital features into the in-store shopping journey.

Drilling down a bit, the study found that 19% of U.S. consumers prefer to shop in stores with the assistance of digital technologies, and 11% prefer to make purchases online for in-store pickup. Three-quarters of shoppers want to be able to use their preferred payment methods in the store.

In further illustration of the appeal of the tactile commerce experience, Visa said this week that amid 4.8% growth in overall holiday shopping, 77% of holiday payment volume happened at brick-and-mortar establishments “versus 23% online, showing the in-store experience remains important for the consumer.” In-store spending was up 4.1% compared to last year, accelerating from 2023 year-over-year gains of 1.6%.

Paying Over Time

At the same time, the accumulation of card debt (the average balance is north of $5,000) means that consumers are finding it useful, and perhaps even necessary, to stagger payments over time. Card-linked offers, in addition, likely can keep consumers aware of, and incentivized by, the opportunity to earn rewards, discounts and cash back.

The PYMNTS Intelligence report “Maximizing Holiday Value: The Strategic Value of Early Pay Later Visibility” found that the availability of pay-later options plays an important role in where consumers decide to shop. According to the report, 43% of consumers said that whether their preferred financing option is available strongly influences their choice of retailer.

Among users of general-purpose credit card-linked installment plans, 35% reported using these plans more frequently over the past year. Moving the financing options and the digital presentation of offers earlier into the buying process can help boost merchants’ sales conversions. Consider the fact that two-thirds of card users shop with brands or merchants where they are members of loyalty or rewards programs.

However, 38% of consumers are not familiar with rewards programs, which means that additional outreach on the part of the retailers (and the issuers, using receipt-level data) can help move the needle on using those offers in-store to make the sale.

Installments and Card-Linked Offers in the Aisles

The data underscored the rewards that accrue for merchants who surface card-linked pay-later plans at the right time, in the right way. The PYMNTS Intelligence report “Merchants’ Evolving Perspective on the Value of Card-Linked Pay Later Plans” found that consumers spend more than twice as much on retail items when using general-purpose card-linked installment plans than what we might term “pure play” buy now, pay later (BNPL) options. Median transaction amounts on card-linked plans reached $1,500, and 72% of merchants prefer customers to finance installments with general-purpose credit cards. The share of merchants that offer general-purpose credit card-linked installment plans has increased by 16% since December of last year.

With some granularity on the appeal in the brick-and-mortar channel, for in-store transactions, merchants said consumers’ use of general-purpose credit card-linked installment plans is growing more than their use of BNPL. Eighty-two percent of merchants reported growth in consumers’ use of card-based installment options during in-store checkout through 2024.