You’ve likely heard the term buy now, pay later or you may already use this service for your jewelry business—but if you’re wondering whether consumers were using these short-term loan apps over the holidays, the answer is a resounding YES.
The 42matters’ app watch list tracked how the top five buy now, pay later (BNPL) apps performed between Nov. 1, 2021, and Jan. 1, 2022. The results, says 42matters executive Sinisa Sambolic, show long-term trends that apps such as Klarna, Afterpay, and Affirm are now proven online payment plans and that they are here to stay well into 2022 and likely beyond.
The data tells a strong story: Sambolic says 42matters research shows that consumers downloaded Klarna a total of 8.9 million times (between Android and Apple phones on the iOS system). Afterpay downloads topped 1.6 million, and Affirm downloads came in about 1.5 million. Other top performers were Zip (previously known as QuadPay) at 360,000-plus downloads and Sezzle with about 345,00 downloads.
With online shopping taking center stage over the past two years, it is clear that consumers love buy now, pay later for one reason, Sambolic says.
“In a word: convenience. Since BNPL apps tend to be interest-free and charge only modest fees, they make it easy for shoppers to finance larger purchases without breaking the bank,” Sambolic says. “Additionally, our data suggests that while there are no dominant forces in the BNPL space, BNPL apps are nevertheless getting more popular. So, competition remains wide open, and new businesses are sure to see this as an opportunity to get involved and grow the space.”
Buy now, pay later apps allow users to make purchases and pay them off at a later time with low, mostly interest-free installments. Consumers, particularly during the pandemic, quickly adopted these apps because they have made themselves easy to use. Plus, the low-fee structure makes them enticing to use for medium- to high-price purchases.
These apps are growing in popularity for a variety of reasons, including consumers’ concerns about inflation, pandemic-related economic unpredictability, and U.S. budgets feeling squeezed, 42matters said in a recent blog post. Rising gasoline and food prices in particular may have consumers noticing their dollars aren’t going as far as they used to, for example.
Sambolic says he recommends jewelers keep an eye on what their competitors are doing and keep expanding their outreach digitally, via social media, and, if it is a good fit, through these kinds of online services.
“We don’t collect data on in-app user activity, so we can’t comment on which retail categories perform best on buy now, pay later apps,” Sambolic says. “That said, BNPL is a popular purchasing method for medium-high price products, like electronics, furniture, and appliances. So, jewelry seems to be a perfect fit for the BNPL space.”
Other researchers have noticed this trend as well, including Momentive research manager Laura Wronski. Momentive, formerly known as Survey Monkey, found in its August study that consumers are enticed by having these short-term loans as payment options.
“Younger consumers are more likely to make a purchase if these different payment options are available. They like flexibility in terms of why or where they buy,” Wronski says. “It can be a deciding factor for younger generations.”
Top: Consumers looked at buy now, pay later apps as an alternative online payment method frequently during the 2021 holiday season, a study conducted by 42matters shows (photo: Getty Images).
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