Afterpay Expands to More In-Demand Categories with New Spring Merchants
Afterpay announces new merchant partnerships with Kendra Scott, Made In Cookware, and Molekule, expanding consumer choices at checkout. Afterpay empowers younger consumers to spend responsibly through flexible payment solutions, with a focus on health-conscious options. The partnership aims to provide more financial flexibility and access to a wider customer base, catering to Gen Z and Millennial spending preferences.
The announcement of Afterpay's new merchant partnerships is significant for the retail sector and the broader payments industry. The integration of flexible payment solutions like Afterpay can influence consumer spending patterns, potentially increasing sales for partnered merchants. The presence of Buy Now, Pay Later (BNPL) options at checkout can make higher-priced items more accessible to consumers, particularly Gen Z and Millennials, who have shown a preference for such services. This could lead to an uptick in average order values and a reduction in cart abandonment rates for retailers.
Financially, the adoption of Afterpay by merchants like Kendra Scott and Made In Cookware may attract a larger customer base, as indicated by the eCommerce Site Manager for Molekule. The mention of lower return rates and more frequent customers for merchants using Afterpay suggests a positive impact on business performance. From an investor's perspective, companies offering or partnering with BNPL services could see improved revenue streams and customer loyalty, although they must also consider the costs associated with providing these services and the potential risks of increased consumer debt.
The growth of the BNPL sector, as highlighted by Afterpay's expansion, reflects a shift in consumer payment preferences and a demand for more flexible financial options. The data showing that 67% of customers would use BNPL more if it were more widely available underscores the importance of accessibility in payment solutions. Moreover, the fact that the largest item categories for Afterpay include diverse sectors such as arts, travel and home & garden, indicates a broadening appeal of BNPL beyond traditional fashion and beauty products.
For businesses, the strategic placement of BNPL options could be leveraged as a competitive advantage to capture market share among younger demographics. The claim of Afterpay being the most trusted and used BNPL brand among those who have tried it suggests a strong brand recognition and customer satisfaction that could influence market dynamics. Companies in the retail and payment sectors should monitor these trends closely, as they could have substantial implications for market positioning and consumer engagement strategies.
The adoption of BNPL services like Afterpay is reflective of broader economic trends, including the financial challenges faced by younger consumers due to inflation and economic uncertainty. The ability of BNPL to spread payments over time without incurring late fees, as reported by Afterpay, may contribute to more sustainable consumer spending without the immediate burden of full payment. This could have positive implications for consumer confidence and spending power, which are critical drivers of economic growth.
However, the rise of BNPL also raises questions about the potential for increased consumer indebtedness and the impact on traditional credit markets. While Afterpay reports high rates of on-time installments, the long-term effects of widespread BNPL usage on consumer debt levels remain to be seen. Policymakers and regulators may need to consider the implications of BNPL services on financial stability and consumer protection.
03/13/2024 - 09:00 AM
Kendra Scott, Made In Cookware, and Molekule among latest top merchants to offer Afterpay’s flexible payment solution, giving consumers more choice at checkout
DISTRIBUTED-WORK-MODEL/SAN FRANCISCO --(BUSINESS WIRE)--
Today, Afterpay announced a slate of new merchant partnerships, empowering younger consumers to spend within their means through Afterpay’s flexible financial platform. For purchases big or small, consumers can now select Afterpay at checkout to spread their payments out in installments at Diane von Furstenberg, Diggs, For Eyes, HanesBrands, Kendra Scott, Made In Cookware, Molekule, Myka, Namawell, Oak & Luna, Poly & Bark, Shop Premium Outlets, Tornado Bus Company, and many more.
"Afterpay allows us to offer health-conscious consumers an additional checkout and payment experience we couldn't offer before. This partnership has enabled us to expand access of our products to a larger customer demographic who are looking for flexibility by paying over time," said Kristian King, eCommerce Site Manager for Molekule .
Since Afterpay entered the U.S. market in 2018, it has expanded its merchant network and vertical offerings to accommodate the growing desire from next gen consumers to shop and spend more responsibly beyond fashion and beauty products. Based on Gen Z and Millennial spend, the largest Afterpay item categories were arts, travel, & entertainment; home & garden; hardware; health & beauty; and electronics in 2023.1 Additionally, 67% 2 of customers indicated they would use Buy Now, Pay Later (BNPL) more if it were more widely available, with demand being higher among Gen Z and Millennials. This comes at a time when next gen shoppers are actively looking for more money management tools to help them navigate the lingering impacts of inflation.
“Younger consumers have faced many financial challenges over the past few years, fueling the growth of alternative payments like Afterpay. Our goal is to not only offer more transparent payment options, but to also promote a healthy and responsible customer base. Because of this philosophy, BNPL customers recognize Afterpay as the most trusted and used brand among those who have tried it, and our merchants have seen the incremental value of having Afterpay with more frequent customers and lower return rates,” said Alex Fisher, Head of Revenue, Afterpay and Cash App .
As an alternative to traditional credit, Afterpay was founded on the principle of financial inclusion and built to help people spend responsibly, with customer protections built-in. As of the fourth quarter of 2023, 98% of Afterpay purchases did not incur late fees and 95% of installments were made on time.3 Afterpay customers also indicated that using the service has helped them reduce financial stress (77% ), better manage their finances (67% ), and save more (60% ).2
Download the Afterpay app on iOS and Android to access all available merchant partners.
About Afterpay
Afterpay is transforming the way we pay by allowing customers to buy products immediately and pay over time - enabling simple, transparent and responsible spending. We are on a mission to power an economy in which everyone wins. Afterpay is offered by thousands of the world’s favorite retailers and used by millions of active global customers. Afterpay is currently available in Australia , Canada , New Zealand , the United States and the United Kingdom , where it is known as Clearpay. Afterpay is a wholly owned subsidiary of Block, Inc. (NYSE: SQ).
1 Afterpay U.S. data analyzed in 2023 excluding apparel and accessories
2 Oxford Economics, The Economic Impact of Buy Now, Pay Later in the US
3 Block Q4’23 results
View source version on businesswire.com: https://www.businesswire.com/news/home/20240313563640/en/
media@afterpay.com
Source: Block, Inc.
Which new merchants have partnered with Afterpay?
Kendra Scott, Made In Cookware, and Molekule are among the latest top merchants to offer Afterpay's flexible payment solution.
What is the goal of Afterpay's partnership with these new merchants?
The goal is to empower younger consumers to spend within their means through Afterpay's flexible financial platform, providing more choices at checkout.
What categories saw the largest Afterpay spending from Gen Z and Millennials in 2023?
The largest item categories were arts, travel, & entertainment; home & garden; hardware; health & beauty; and electronics.
How has Afterpay expanded its merchant network and offerings since entering the U.S. market in 2018?
Afterpay has expanded its merchant network and vertical offerings to accommodate the growing desire from next gen consumers to shop and spend more responsibly beyond fashion and beauty products.
What percentage of customers indicated they would use Buy Now, Pay Later (BNPL) more if it were more widely available?
67% of customers indicated they would use BNPL more if it were more widely available, with demand being higher among Gen Z and Millennials.
