Holiday seasons see a 30% surge in the average size of shopping baskets using Afterpay.
In the lead-up to the holiday season, consumers across the United States turned to alternative payment methods and in-store technology to enhance their shopping experiences.
One of the key players in this shift is Afterpay, a company that allows consumers to make purchases and pay for items in installments over time. Afterpay has partnered with over 64,000 global retailers, including major brands in fashion, beauty, home goods, toys, and technology sectors. In the U.S., ten of the largest retailers have partnered with Afterpay, although the exact top ten list is not publicly disclosed.
Afterpay expanded its program to select retail stores via a virtual, contactless card found in the customers' digital wallet in October. This move enabled customers to access Afterpay's pay-over-time options both online and in physical stores.
Shopify and PayPal have also entered the market with similar offerings. Shopify began offering "Shop Pay Installments" last spring, while PayPal introduced "Pay in 4" which allows customers to pay for purchases between $30 and $600 over six weeks and manage their payments within the company's app.
Retailers are not only integrating these payment options but also reworking their stores to suit shoppers. They are creating age-appropriate experiences and implementing complementary shop-in-shops. In-store technology is being deployed to support these changes, with retailers ensuring that the technology integrates seamlessly with existing store layouts.
Research from NPD Group forecast that sweatshirts, sweatpants, active bottoms, sleepwear, and socks would comprise 31% of total U.S. apparel spending during the holiday season. Popular products for Afterpay customers during this period included thermal knits, socks, pajamas from Old Navy, Crocs, fleece-lined boots, and slippers.
The shift towards alternative payment methods may have been influenced by the delayed stimulus package, which didn't arrive until after the holidays. Shakaila Forbes-Bell, Afterpay's resident consumer psychologist, stated that consumers seek simplicity and familiarity during times of crisis, influencing their shopping practices.
Macy's announced a five-year deal with competitor Klarna to give customers four interest-free installment payments on their purchases in October. Afterpay reported a 30% increase in average basket size for U.S. customers during the holiday season.
As we move into the new year, it's clear that the retail landscape is undergoing significant changes. With the continued growth of alternative payment methods and in-store technology, shoppers can expect a more seamless and personalised shopping experience.
