As COVID-19 vaccinations have been rolled out to the masses, consumers are once again opening up to the idea of engaging in experiences that were tabled for the good part of the last year.
With brands and retailers making efforts to bring back the traditional shopping experiences, they are dialing in new offerings that meet the payment needs and expectations of consumers today.
For example, buy now, pay later (BNPL) solutions have historically been more popular amongst the more budget-conscious and debt-averse Gen Z and millennials. That quickly changed over the course of the pandemic, especially as consumers across the spectrum shifted toward engaging in online shopping experiences.
In 2020 alone, Afterpay reported that just about 90 percent of their global customers opted to pay using debit cards to make purchases. Furthermore, Melissa Davis, global chief revenue officer at Afterpay, revealed that the company has also witnessed new consumer segments join, confirming the normalization of the buy now, pay later option amongst all demographics.
It is perhaps not surprising that many BNPL providers are looking to extend their solutions beyond traditional eCommerce, especially as consumers more freely engage in activities such as travel and shopping in physical stores.
Here are some of the many ways BNPL providers are thinking beyond the traditional checkout experiences:
Bringing the convenience of BNPL in-store
While consumers have come to love flexible payment options online, BNPL solution providers have looked to extend that convenience by partnering with retailers from across the country to launch flexible payment options in-store.
Afterpay, for one, rolled out the offering just in time for the holidays, enabling in-store shoppers to pay for their purchases in a series of four installments without taking out a traditional loan or being bothered with upfront fees or interest rates.
“Afterpay customers can now choose either physical or online shopping to buy holiday gifts – which brings new customers and drives more sales conversion to retailers without any additional set-up or integration costs,” said Nick Molnar, Afterpay’s Co-founder and CEO of North America.
According to Afterpay, customers who choose to shop both online and in-store spend anywhere from 15 percent to 20 percent more per transaction than online shoppers and shop they 66 percent more frequently. This increased spending translates to an increase in average order values (AOV) for retailers with AOV of BNPL transactions three times higher than that of other payment forms.
Jumping in on the travel boom
Buy now, pay later service provider, Uplift, partnered with Southwest Airlines Co. so customers can book their Southwest Airlines flights to more than 100 U.S. and international destinations and pay for their travel expenses over time.
The offering comes on the heels of strong pent-up consumer demand for travel as COVID-19 case cases continue to decline and vaccination rates ramp up.
“Southwest Customers are eager to fly again, and our expanding partnership with Uplift will help open up the possibilities of affordable travel to even more people, just in time for the summer vacation season and beyond,” said Jonathan Clarkson, Managing Director of Loyalty, Partnerships, and Products for Southwest Airlines.
Customers who choose to utilize the offering can book when they are ready and spread the cost over a series of affordable monthly payments.
Southwest Airlines joins a portfolio of travel brands that have teamed up with the BNPL provider, including Air Canada, Alaska Airlines, American Airlines, United, Spirt and Air Portugal.
Taking a consumer-centric approach to industry led events
Then there’s Afterpay’s recent multi-year partnership announcement with IMG, the owner and producer of New York Fashion Week, which is seeking to bring a “consumer-first” approach to the event.
According to Molnar, the partnership will help the event make a strong comeback in 2021 by enabling consumers to engage in “shoppable moments.”
“Our industry has faced countless setbacks during the pandemic, but our collective resilience is unparalleled,” said Leslie Russo, President of IMG’s Fashion Events and Properties. The BNPL offering will not only reignite the commerce and creativity showcased at America’s most critical fashion industry event, but also revitalize New York’s fashion and retail sectors at large, Russo added.
As part of the initiative during this year’s Fashion Week programming, Afterpay will be partnering with New York-based designer LaQuan Smith to launch a “see now, buy now” show during NYFW where U.S. shoppers will be given a front-row seat from the comfort of their own home, with the opportunity to buy items directly from the runway and pay for them over a series of four installments.