The financial implication of the pandemic has reshaped how consumers handle their money. With job furloughs and pay cuts on the rise in recent months, consumers may be holding on tighter to their income. Yet as businesses begin to reopen, can Buy Now, Pay Later (BNPL) providers entice consumers to start spending more?
To find out, quantilope ran an explorative study on perceptions and attitudes toward BNPL services, and how COVID-19 has impacted their use.
Thirty-five percent of consumers using BNPL services report their usage has increased due to COVID-19. And interestingly, 50% of respondents whose employment status has been impacted by COVID-19, either positively or negatively, have increased their usage of these services as well. This suggests that whether or not consumers have been directly affected financially by the onset of the pandemic, they are increasingly conscious of how much they are spending at once.
Consumers mentioned that they were most likely to use BNPL services in the past for Furniture and Appliances, Apparel, and Consumer Electronics. As for future use cases, consumers are less likely to consider this payment option for Apparel, but Furniture and Appliances, and Consumer Electronics are still top categories, which makes sense considering their relatively high price tags. Speaking of which, the price threshold for using BNPL is rather high, starting at or above $100 for Gen Z and Millennials and at or above $200 for Gen X and Boomers.
With this in mind, BNPL providers should pay attention to where their service is offered and ensure it is available for consumers making these high ticketed purchases, especially as consumer spending begins to rise. Data from our study shows that the majority (62%) of consumers who use these services have used them within the last three months, reflecting a time period when many businesses were opening back up and restrictions began to lift.
The full dashboard including additional insights into how consumers’ spending habits have changed in response to COVID-19 is available below.