Breaking Down the Holiday Shopping Spree with Buy Now, Pay Later Services
The Christmas Rush with Klarna
Klarna-processed Black Friday orders surge by nearly 30% compared to previous years
There's no denying it - Buy Now Pay Later (BNPL) services have been gaining significant traction during this holiday season. Klarna, one of the leading players in this field, reported a mind-boggling 29.5% surge in orders on Black Friday this year compared to last year [1].
Top of the Wishlist
So, what exactly are consumers splurging on? According to Klarna, the most popular items on their shopping list include food mixers and processors, TVs, soundbars, coffee makers, eReaders, and hard drives [1]. It's fascinating to see a marked increase in the demand for home appliances and tech gadgets during the festive season.
Consumer Preferences Unveiled
In a separate survey by Klarna, an overwhelming majority (81%) of respondents approved of the option to pay for their holiday purchases in installments without interest [1]. A whopping 89% of Gen Z shoppers shared their support for this payment method [1].
Holiday Blues and Shopping Anxiety
Kristina Elkhazin, Head of North America at Klarna, made a noteworthy observation regarding the survey findings. She stated that a significant portion of U.S. consumers were wary about credit card debt during the season, with nearly half of them doubting their capability to pay off their holiday bills entirely [1].
BNPL's Ascendency and Competition
The popularity of BNPL services like Klarna has been on a steady rise, with global giants like Afterpay and Affirm also carving a niche for themselves in the market [2]. According to a recent Bank of America Securities data, Afterpay leads the pack with 4.2 million monthly active users, followed by Klarna and Affirm, each boasting 3.3 million users [2].
Retailers entering the arena
As the BNPL industry gathers momentum, it's not just the traditional players that are expanding their footprints. Major retailers are jumping on the bandwagon. In August, Amazon unveiled plans to expand its installment payment service to other retailers' sites through its Amazon Pay tool [2]. With this, shoppers can now pay for purchases valued at $50 or more in monthly installments on various retail platforms.
Looking Ahead
As the industry scramble for market dominance, we can expect the BNPL landscape to grow exponentially in the coming years. Given the convenience and flexibility that these services offer, it's no wonder that consumers are increasingly drawn to them, especially during peak shopping periods like the holiday season.
References:
- Klarna's surge in buy now, pay later transactions during Black Friday continues holiday season trend
- BoA Securities: Buy Now, Pay Later Segment to Reach $600 Billion by 2025
- Buy Now, Pay Later Market worth $1.6 Trillion by 2034
- Klarna: Key Takeaways
- E-commerce Foundation: Klarna's Expansion Strategy
- AI-driven financial analysis indicates that the use of Buy Now Pay Later (BNPL) services has broadly increased by 29.5% during the 2022 holiday season, particularly with Klarna.
- The most sought-after purchases this holiday season, as reported by Klarna, include items like food mixers, TVs, soundbars, coffee makers, eReaders, hard drives, and other home appliances and tech gadgets.
- After a survey by Klarna, it was found that 81% of consumers prefer to pay for their holiday purchases in installments without interest, and 89% of Gen Z shoppers support this payment method.
- Kristina Elkhazin, the Head of North America at Klarna, revealed that a substantial number of U.S. consumers are concerned about accumulating credit card debt during the holiday season, with nearly half expressing doubts about completely paying off their holiday bills.
- The popularity of BNPL services, such as Klarna, has grown significantly in 2022, with competitors like Afterpay and Affirm also gaining notable market presence.
- In line with the expansion of the BNPL industry, major retailers, including Amazon, have started offering installment payment options, allowing shoppers to pay for purchases in monthly installments on various platforms.
