Companies such as Klarna, Affirm, Afterpay and Quadpay have popuarlised ‘buy now, pay later’ in retail, which gives shoppers the ability to pay for purchases through instalment plans, taking on the financial risk that typically falls on retailers when going after Millennial and Gen-Z consumers. In doing so, they’ve changed the way credit card-skeptical young consumers shop online and have lowered barriers to product accessibility, allowing the brands to gain access to new customers.
“With buy now, pay later we’re seeing a huge influx of a certain demographic of customers that are using it, specifically, younger women, 20 to 35, young professionals whose average order value then jumps to six or $700,” said Carl Cunow, co-founder of swimwear brand Onia, which uses Klarna. “And I don’t think that we would have had, you know, 40 percent of those customers before.”
In the latest BoF Live digital event, BoF deputy editor Brian Baskin and correspondent Cathaleen Chen are joined by Cunow and Albert Saniger, founder and chief executive of retail finance startup Nate, to discuss the state of buy now, pay later space today and what’s to come.