By the end of 2024, the Buy Now, Pay Later market is projected to expand significantly, reflecting its entrenchment in consumer spending habits. Retailers are responding to a clear consumer mandate for BNPL options, with its absence potentially driving customers to competitors, underscoring BNPL's critical role in retail strategies for the foreseeable future. StoreConnect explains why BNPL is inching towards becoming the number one payment option in the world.
SAN FRANCISCO, Jan. 29, 2024 /PRNewswire-PRWeb/ -- The payment preferences of consumers have shown a marked shift towards Buy Now, Pay Later (BNPL) services, a trend underlined by the significant projected growth of the U.S. BNPL lending market. By the end of 2024, the market is expected to increase by 1,200 percent from its valuation in 20191, indicating a broader acceptance and integration of BNPL services in consumer finance. StoreConnect has built in options that help make BNPL easier for consumers and small businesses.
Cyber Monday in 2023 highlighted this shift, recording a 43% increase in BNPL-related online spending, totaling $940 million2. This growth is part of a continuing trend that saw BNPL transactions increase significantly from the previous year, suggesting a solidifying consumer preference for such payment options.
Data suggests that the availability of BNPL services is influencing purchasing decisions, with 43% of consumers indicating they might reconsider making purchases if BNPL were not available3. The previous holiday season's 72% increase in the use of BNPL services further illustrates the role of BNPL in reshaping consumer purchasing patterns.
Online shopping's contribution
The increase in U.S. online spending, which rose by 4.9% during the 2023 holiday season, was accompanied by a 14% rise in BNPL service usage4. These statistics suggest a correlation between the availability of BNPL services and the willingness of consumers to engage in online spending.
The impact of BNPL services extends beyond individual consumer transactions, as is reflected in customer loyalty trends. Approximately 22% of consumers report they would switch retailers if BNPL options were not offered5, indicating the importance of BNPL services in retail customer retention strategies.
The impact on SMB's
Furthermore, the reach of BNPL is expanding, with the service growing beyond consumer retail to support small businesses and business-to-business (B2B) markets. Partnerships in the sector signal BNPL's potential to offer new solutions for short-term financing, challenging traditional models and providing flexible options for small business owners.
As the BNPL sector evolves, it is becoming evident that these services are more than just a convenient payment option—they are an integral part of a changing financial ecosystem that is influencing consumer behavior, retailer strategy, and small business financing.
The unforeseen problem with returns
When it comes to returning purchases, the BNPL option can make the process even more difficult than it already is if a SMB is not set up with an adequate all-in-one CRM platform. When you choose BNPL multiple departments are affected.
- Accounting: Has it been paid for? When will it be paid off?
- Inventory: Is the product in stock or is it not? What do we do with it until we can ship it?
- Shipping and Receiving: When should we ship it? What if they want to return it?
With the traditional CRM platforms, it is hard to determine what division the return affects the most. Is it accounting which deals with refunds? Or the inventory department that must adjust all its inventory numbers internally and externally? Or, when it is an online purchase, is it the shipping department that must account for the product they first shipped, and then figure out where it should go when it comes back. In some cases, even having to organize how to ship the product back and when it will be received.
A fully integrated eCommerce, point-of-sale, content management system and CRM platform can solve all these issues. Once the item is paid for in full it can trigger the process for shipping which will deduct it from the inventory. The same works backwards. Once the item is shipped, or returned, it can automatically be added back into inventory, assuming it can be resold, and accounting can be triggered to immediately refund the purchase.
'Designed for speed. Crafted for connection.'
BNPL is just one of the Customer Commerce payment solutions available through StoreConnect. For more about the impact on consumer spending and retail strategies please contact StoreConnect, the only fully-integrated eCommerce, point-of-sale, content management system and CRM platform that can handle multiple payment and ordering options. StoreConnect provides Customer Commerce solutions that provide a single source of truth designed for small- and medium-sized businesses to help them to consolidate all their marketing, sales, and support channels into one system saving time, double-work, and lost information.
About StoreConnect
Mikel Lindsaar is the CEO and Founder of StoreConnect, a Salesforce Partner Innovation Award Recipient. Mikel is a serial technology entrepreneur having successfully built and sold four SaaS companies within the last decade. StoreConnect has one goal: to help small and medium-sized businesses become scalable Customer Companies powered by Salesforce. Clients achieve this daily by breaking free of the shackles of what Mikel calls "Plugin Purgatory and SaaS Hell." StoreConnect clients don't need multiple SaaS systems connected by plugins to manage their online, in-store POS and in-person Customer Commerce business systems. Many of today's eCommerce solutions are designed to get up and running quickly and inevitably hit a brick wall of scalability and extensibility as companies grow. That's why StoreConnect is built on the world's #1 CRM, so its customers will never need to replatform no matter how fast they grow, product offerings or regions. Global growth now has no barriers for any SMB. Being built on Salesforce allows StoreConnect customers to update their websites, funnels, and content in real time, providing an unparalleled competitive advantage. StoreConnect is Time. Well Spent. Visit https://getStoreConnect.com/.
References:
1. "Buy Now, Pay Later: How BNPL Is Transforming Online Shopping." BigCommerce, BigCommerce, 5 Jan. 2024, http://www.bigcommerce.com/articles/ecommerce/buy-now-pay-later-ecommerce/.
2. "From Checkout to Growth: BNPL's Sprint Picks up Pace." PYMNTS.Com - What's next in Payments and Commerce, 28 Dec. 2023, http://www.pymnts.com/tracker_posts/from-checkout-to-growth-bnpls-sprint-picks-up-pace/.
3. "From Checkout to Growth: BNPL's Sprint Picks up Pace." PYMNTS.Com - What's next in Payments and Commerce, 28 Dec. 2023, http://www.pymnts.com/tracker_posts/from-checkout-to-growth-bnpls-sprint-picks-up-pace/.
4. US Online Holiday Spending up 5% on Steep Discounts, BNPL Options, 2024, http://www.reuters.com/business/retail-consumer/us-online-holiday-spending-up-5-steep-discounts-bnpl-options-report-2024-01-04/.
5. "From Checkout to Growth: BNPL's Sprint Picks up Pace." PYMNTS.Com - What's next in Payments and Commerce, 28 Dec. 2023, http://www.pymnts.com/tracker_posts/from-checkout-to-growth-bnpls-sprint-picks-up-pace/.
Media Contact
Karla Jo Helms, JOTO PR™, 727-777-4629, [email protected], http://jotopr.com/
SOURCE StoreConnect
Share this article