04 March 2020
The rise of Buy Now, Pay Later
The rise of Buy Now, Pay Later, Technology in the grocery space
Recently our eCommerce Business Director, Saradha Sethuraman, spoke with leading FMCG trade title, The Grocer, about the rise in Buy Now, Pay Later (BNPL) technology and how this may affect the UK grocery industry.
Here’s Saradha’s take on the new tech:
“BNPL isn’t actually a new concept – Layaway was a popular payment method in the Great Depression era in the US and is just the same as BNPL. Indeed, Walmart and few other retailers in the US still offer Layaway on items such as electronics, toys and small appliances for purchases as little as $50. Despite this relatively low minimum purchase value, we’d assume they haven’t ventured into the wider grocery space yet because of the tight margins.
“Yet what’s triggering large UK grocery retailers to take a closer look at formalising their BNPL offering is the change in shopping preferences of their customers. Millennials and Gen Z – who already make up a very large portion of digital shoppers – are not as interested in having credit cards but would still like to have flexible payment solutions in their eCommerce journey. And with the UK grocery eCommerce market having one of the highest basket sizes worldwide, there is huge potential for such solutions.
“We’d therefore expect to see such solutions to soon be made readily available in major supermarkets as well as on premium direct to consumer sites. In particular, we see it working with either high value items like wine and spirits, or items bought in bulk, like catering for a special occasion or the festive period.
“We are working closely with agencies, like PHD Global, to help our clients anticipate this shift ahead and ensure they are well prepared. For instance, ensuring relevant content is available on the product pages, during the checkout process and in the FAQ section will help customers make a conscious decision when using BNPL and will be crucial for retaining customer loyalty and achieving a better customer lifetime value. “