The likes of Afterpay and others have put the spotlight on Buy Now, Pay Later schemes, and new analysis of more than 9,000 shoppers has provided insights on what consumers think of them.
In its second annual report on the emerging sector, titled BNPL 2019: More shoppers, more players and more options, Power Retail analysed findings from 9,430 online shoppers, 94 Australian retailers and reviewed 30 industry reports and studies from both within Australia and overseas.
It found that Buy Now, Pay Later (BNPL) schemes have pretty much reached total saturation in terms of awareness, with 98 per cent of shoppers aware of such schemes.
Yet uptake is proving slower, though still posting solid growth.
“The actual usage of BNPL has risen between our reports, from 27 per cent to 39 per cent,” the group’s managing director, Grant Arnott, said.
“It’s then no doubt that over one-third of Australians will be looking to use these payment options during this busy time.”
According to the report, BNPL accounted for 18 per cent of online transactions examined in 2019 — almost doubling the 10 per cent proportion recorded in 2018.
“Other” options surged even more strongly, from 6 per cent to 15 per cent.
Both of these were at the expense of PayPal, which saw its share of online transactions slump from 49 per cent to just 38 per cent.
Credit card usage also declined in 2019, with the proportion of transactions using the fantastic plastic falling from 35 per cent to 29 per cent.
Some of the findings about the use of BNPL options are that:
- 10 per cent of consumers use them “whenever they can” when making online purchases.
- The value of goods bought through such offerings has steadily fallen, from an average $1,098 in April 2016 to a median $155 in September 2019.
- Fashion accounts for the lion’s share of BNPL purchases, at 52 per cent of all transactions. Other popular transactions were electronics and electrical goods, house and garden products, and beauty products.
- Almost one in five (19 per cent) shoppers who have used such options to buy goods has missed a payment within the past year.
- Women were much more likely than men to have ever used BNPL options (42 per cent versus 30 per cent of men), although men tended to use these options for higher-value purchases.
- Popularity was highest among under-25s, and fairly steadily decreased with age.
The latter findings led the report to suggest that for businesses embracing these payment options, BNPL “should be positioned differently depending on the age and gender of the target market”.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.