The latest data shows there is a link between Buy Now, Pay Later and conversions, as well as AOV, but is BNPL usage on the rise?
Each fortnight, Power Retail surveys over 1,000 online shoppers to find out exactly how consumer behaviour is changing. Our latest survey took a deep dive into Buy Now, Pay Later. When BNPL hit the scene, there was an expectation that it would completely shake up the payments landscape. And while we have seen a definite increase in BNPL awareness and usage since 2020, it hasn’t quite been the monumental shift that some were expecting.
USAGE AND LATE FEES ON THE RISE
In the last six months, almost half of all consumers surveyed (47%) have used a BNPL provider. This is an increase in usage over the last few years, up from 37% in 2020. In line with an increase in consumers using BNPL, there has also been an increase in consumers who have paid a late fee since 2020. This year, 14% say they have paid a late fee for an overdue instalment. While this is a relatively small percentage, it is double the 7% who paid a late fee in 2020. We can see that from 2021 however, there has been no change in the proportion of consumers who had had to pay a late fee while using BNPL (also 14%).
BNPL, AOV AND CONVERSIONS
Is there a link between conversion rate and BNPL? Almost three quarters of consumers (74%) say that they are more likely to make a purchase online if the website offers BNPL. This has remained steady year-on-year (down from 76%), however there has been a jump from 2020. This may be related to BNPL being a fairly recent addition to the payment space and therefore its influence (and indeed consumer awareness of BNPL) jumped from 2020 to 2021, and has now stabilised.
Furthermore, BNPL does increase average order value. Sixty-six percent say they are likely to spend more on a single online purchase if BNPL is offered. While this is down slightly year-on-year (from 70%) we can again see a jump from 2020 (when just 51% said they would spend more).
Source: Power Retail Switched On Trajectory Report #50
INTENT TO SPEND
Interestingly, 30% say they plan to decrease their BNPL spend in the next month. When asked in 2021, only 22% said they had plans to decrease BNPL spend. That intent to decrease (30%) is higher than intent to increase (12%) in 2022, shows that consumer confidence in BNPL usage may be wavering.
The majority, 58%, do say they plan for their BNPL usage to stay the same, and that this figure is stable year-on-year. It does show that BNPL has staying power, though usage may have plateaued slightly rather than the growth we saw from 2020 to 2021.
Want to know the most popular BNPL provider? Find out why shoppers are planning to decrease spend PLUS what proportion of shoppers paid for their last online order with BNPL (and how has that changed in the last month? Hint: it’s going down). Download our Special Edition Trajectory Report #50, filled with BONUS trends and insights from the last two years. FREE to Power Retail Switched On Members.
PLUS join our fortnightly Market Update, in which we present findings from the most recently published Trajectory Reports. FREE to join (for both Switched On members and non-members), and just 15 minutes! Our next Market Update will take place on Wednesday, 24 August at 1 pm, and we’ll be taking a deep dive into BNPL. Register here.
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