Global Retail Transformation: Advent of Buy Now, Pay Later, and Online Shopping for Holiday Season

With the approaching season of the festivity, it is being seen that many consumers worldwide, especially in the US, are highly opting Buy Now, Pay Later service. Also, a tremendous influx of online shopping has been recorded in the holiday season of 2023. As per Adobe’s forecast, there's an anticipated uptick of nearly 5% in online shopping between Nov & Dec 2023. However, cautionary indicators hint at a decline in consumer confidence. Retailers aspiring for growth are urged to innovate and assist customers in navigating these challenging times. Surprisingly, even affluent households display a dip in optimism, resulting in increased adoption of installment plans.

A significant revelation from the report by McKinsey notes a substantial surge in buy now, pay later (BNPL) usage — for online Black Friday transactions to offline retail shopping.

Further, a recent study titled "Rise in Popularity of Installment Plans Among Shoppers" reveals that nearly 64% of individuals earning over USD 100,000 annually favor installment plans, with a notable inclination towards credit card-based installment payments among affluent millennials. Moreover, separate research from Bluedot, a customer service tech company, highlights the preference for BNPL among millennials and Gen Z. A substantial portion—48% of Gen Z respondents and 47% of millennials—expressed intent to utilize BNPL for holiday purchases. In contrast, while Gen X shoppers are adopting BNPL (40%), only 14% of Baby Boomers indicated a similar inclination.

In summary, Buy Now, Pay Later plans and online shopping are set to be pivotal in consumers’ shopping strategies. This pattern signifies a substantial change in how consumers spend, reflecting a rising desire for adaptable payment choices that retailers ought to contemplate in the future.