As an eComm store, your brand should seriously consider offering a "buy now, pay later" feature at checkout. This trending payment option has become a super savory treat among especially younger shoppers, who prefer to spread out their payments over time rather than paying the full amount upfront. Essentially, this feature allows shoppers to make purchases they may otherwise not be able to afford in the moment.
If you ask us, BNPL is that little something your marketing mix needs to sweeten up your customers' shopping experiences! In fact, 60% of shoppers have used BNPL, with 360 million users currently opting for this payment option.
Baking a BNPL option into your checkout process can potentially increase your sales and entice more customers to shop. Did someone say, “Impulse purchase?” Yes, please!
Plus, this feature can boost customer loyalty and repeat purchases.
Many third-party providers offer "buy now, pay later" services, such as Afterpay, Klarna, and Affirm. These providers can integrate with your eCommerce platform to make the payment process seamless for all your customers.
But is this payment option right for your brand? Help yourself to a few super sweet benefits of BNPL! But before we dig in, what exactly is buy now, pay later, and how does it work?
What Is BNLP?
In a nutshell, “buy now, pay later” payment methods allow shoppers to purchase a product and then “pay it off” in multiple installments over a designated period of time. BNPL offers customers much more shopping flexibility. To integrate a BNPL feature into your checkout process, eComm brands will typically partner with a provider like Afterpay. Your brand will receive the payments as they’re made, and the payment partner takes on the responsibility and risk from the customer.
How Does BNPL Work?
BNPL payments are usually paid off in one of three ways, depending on the service you use:
- In full within 30 days, interest-free.
- Multiple (usually 3-4) installments, interest-free. Each installment is usually the same price and may be spread out between two weeks or a month apart.
- Multiple installments (usually 3-4) with no interest, but the installment prices vary. For example, you may have the option to make one payment of $33 or three monthly payments of $15 each. While the latter option totals $45 instead of $33, this is because the customer is paying an extra fee of $4 to spread out their payments.
Why eComm Brands Need BNPL
So, why should your brand hop on the trend? For starters, the BNPL market was valued at $141.8 billion in 2021 and is projected to grow at a compounded annual rate of 33.3% over the next three years.
“Buy now, pay later” may very well be the secret ingredient to success. To make your marketing strategy top-tier, your brand should take advantage of this super sweet feature. Still not convinced? Here’s how your business can benefit from BNPL:
Spice up your average order value (AOV). By giving your customers the option to spread out their payments, shoppers may be more likely to purchase higher-priced items or bulk orders. In fact, Klarna reported an AOV increase of as much as 45% as a result of flexible payment options like BNPL.
Boost customer loyalty. "Buy now, pay later" features provide customers with convenience and flexibility. Because your brand is a little more financially forgiving, they may be more likely to come back and purchase with you again in the future. According to Klarna, 36% of shoppers are more likely to purchase with a brand again if they offer flexible payment options. Think of it as a sweet little incentive to make your brand their favorite!
Get younger audiences hungry to shop. BNPL options are immensely popular among younger audiences who may not have credit cards or the immediate funds to pay off a purchase upfront. In fact, over 64% of Gen-Z users (ages 18-24) say they have used BNPL. By providing this payment option at checkout, eComm stores can attract and retain younger demographics, giving your brand a competitive edge.