Shopping event with Afterpay expands to incorporate brick-and-mortar stores for the first time
In the ever-evolving world of e-commerce, the impact of Buy Now, Pay Later (BNPL) services like Afterpay and Klarna continues to grow. This year, these platforms are set to significantly influence shopping trends, as they expand their reach to in-store purchases.
## Afterpay Day Expands to Physical Retail Stores
Afterpay, an installment payment startup, is set to include its services in physical stores for the first time during its fifth bi-annual Afterpay Day event from March 25 - 28. This move follows the platform's expansion into retail stores in October. The event will feature more merchants offering deals and promotions than before, attracting customers to both online and brick-and-mortar stores.
## The Power of BNPL in E-commerce
1. **Increased Average Order Value (AOV)**: Studies have shown that buyers using BNPL services tend to have an 85% higher average order value compared to those using other payment methods. This trend is attributed to the flexibility BNPL offers, allowing customers to make larger purchases without immediate financial strain.
2. **Consumer Preference and Cart Abandonment**: Nearly 41% of shoppers abandon their carts if their preferred payment option is not available. Offering BNPL options can reduce cart abandonment rates, as customers value flexibility in payment methods.
3. **Growth in BNPL Usage**: The average BNPL purchase amount increased from $135 in 2021 to $142 in 2022, indicating a growing comfort with BNPL services among consumers. This growth is partly driven by the appeal of interest-free installments, which facilitate larger purchases.
4. **Demographic Trends**: BNPL services are particularly popular among younger generations, such as Gen Z and Millennials, who seek flexible payment options to manage their budgets amidst rising living costs.
5. **BNPL and E-commerce Integration**: BNPL has become an integral part of the e-commerce checkout process, enhancing the overall shopping experience by providing seamless and efficient payment experiences. This integration supports the broader trend of increased e-commerce adoption, with online shopping becoming more prevalent.
## Adobe's Predictions for E-commerce Spending in 2022
Adobe predicts that e-commerce spending in 2022 will exceed $1 trillion. The use of BNPL services has increasingly relied on by consumers, according to an Adobe report. Consumer use of installment payment platforms, such as Klarna and Afterpay, has seen a 215% spike compared to last year.
## Afterpay's Strategic Partnerships
The Afterpay Shop Directory drove 45 million shoppers to retailers in December alone. Using the Afterpay Shop Directory, customers can find deals from brands like Puma, J. Crew, and Anthropologie during the event. Afterpay's app will point users toward participating stores near them during the event. Multiple brands and retailers, including Aveda, Vera Bradley, and Mac Cosmetics, will offer in-store and online sales in collaboration with AfterPay during the event.
Klarna integrated its services into Google Pay for in-store payments last August, expanding its reach to over 60,000 stores across the country, including H&M, The North Face, and Timberland.
Afterpay added a "favorites" feature to its platform this year, allowing users to save their preferred brands and stores for easy access during sales events like Afterpay Day.
In conclusion, the integration of BNPL services into e-commerce and physical retail stores is reshaping the shopping landscape. By offering consumers more financial flexibility and convenience, these platforms are driving increased spending and a more satisfying shopping experience. As e-commerce continues to grow, the impact of BNPL services is expected to contribute even more to online spending in the future.
- The reach of Afterpay, an installment payment startup, is extending beyond online shopping as it integrates its services into brick-and-mortar stores, a move seldom seen before.
- Klarna's integration with Google Pay, which provides in-store payment options, has expanded its reach to over 60,000 stores across the country, illustrating the potential growth of AI-driven financial technology in the retail industry.
- Amidst the rise of e-commerce spending and the increasing reliance on Buy Now, Pay Later (BNPL) services like Klarna and Afterpay, the global finance sector may witness shifts, as these platforms transform consumer spending habits across various industries, including technology and labor.
