If Cyber Five trends hint at what to expect from the rest of the holiday season, expect buy now, pay later (BNPL) to be a big hit. According to Adobe Analytics, orders placed with BNPL grew 85% over the course of the five days, echoing the growth BNPL providers saw in the third quarter. Though adoption is still relatively low, there’s a massive opportunity for providers who can prove their worth to consumers.
Holiday boost: As inflation continues to weigh on consumers, they are looking to BNPL to help with holiday shopping.
The major players: Increased consumer use spells success for BNPL providers.
The adopters: Only 12% of US consumers use BNPL regularly, according to an October survey by Bizrate Insights.
Give ’em what they want: What features can BNPL services offer to entice more adoption? According to our 2022 “US Buy Now, Pay Later Feature Demand” report, the top five most in-demand features for US BNPL users fall into two categories: fee avoidance and rewards.
All talk: At the Money20/20 event earlier this year, BNPL was one of the most prominent themes, with many conversations centering around differentiation and innovation.
What lies ahead: Though adoption is relatively low, we expect that to quickly change. We forecast BNPL payment value will reach $75.60 billion in 2022, growing by double digits each year to reach $143.44 billion in 2026, when almost 40% of internet users will have used a BNPL solution.
As we transition into the next wave of BNPL, providers will need to innovate and differentiate themselves to capture a share of those consumer dollars.
Pro tip: A Gen Z strategy is a must-have for providers, as they are the generation most likely to use a BNPL service. For example, this year, 55.1% of Gen Z digital buyers will use a BNPL service, versus 48.6% of millennials, 31.2% of Gen Xers, and only 16.3% of baby boomers. When targeting Gen Z, there’s a huge opportunity to capture consumers who haven’t built up credit yet but still want to finance small purchases.
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