Black Friday and Cyber Monday may have been disappointing compared to previous years, but a top “buy now, pay later” (BNPL) provider sees a bright future for its technology, both online and in stores. In total, Afterpay says that orders through its platform across all channels have jumped 34 percent year-over-year this holiday season.
The Square-owned platform may have reason for optimism. A recent survey by Cardify indicates that 45 percent of BNPL users say they plan to use the services to cover some or all of their holiday purchases.
Within the “Cyber Week” period from Tuesday through Cyber Monday, BNPL usage jumped 29 percent year-over-year, according to Salesforce, marking more than $22 billion in holiday purchases financed. Adobe said that installment payments services on Cyber Monday generated a boost of 21 percent revenue year over year, with orders inching up 1 percent.
Afterpay has put its faith in youth throughout the start of the peak season, saying that between Black Friday and Cyber Monday, 11 percent more Gen Z consumers purchased through its platform versus the prior year.
After a year of accelerated digital adoption, e-commerce is still maintaining a stronghold, with a 30 percent increase year-over-year of Afterpay users spending online. Additionally, due to supply chain issues, 442 percent more shoppers that use the platform are buying items in stores rather than waiting for online orders to arrive, showing that more consumers are getting used to flexible payments however they buy.
Retailers specializing in the fashion and fitness categories were the most popular with shoppers this Cyber Week, up 26 percent and 46 percent year-over-year, respectively. Additional top-selling categories include footwear, beauty and homewares.
The best-selling items all fall with fashion and accessories, with Afterpay saying that clogs, weekender bags, trucker hats, pajamas and shoes, which were at the top of Afterpay shopping lists. Afterpay’s 100,000 merchant partners also saw an 8 percent increase in basket size on Cyber Monday.
“As we celebrate another holiday season in the pandemic, consumers were eager to gain a sense of normalcy and spend on gifts for themselves and loved ones,” said Zahir Khoja, Afterpay’s general manager of North America. “Compared to previous Black Friday and Cyber Monday weekends, we’re thrilled to partner with even more U.S. merchants to offer Afterpay’s convenient and flexible payment method—revitalizing brick-and-mortar spending and helping consumers budget before the new year.”
Sezzle hopes sweepstakes can spice up holiday
Another BNPL provider, Sezzle, is looking to promote its flexible payment platform with a holiday season giving campaign. Through Jan. 9, 2022, Sezzle is bringing shoppers “Home 4 The Holidays,” so that shoppers using the platform to make a purchase with its 44,000 merchants will be automatically entered for a chance to win one of several prizes. Prizes include a 2022 Bambi Airstream, free rent for a year, travel vouchers and “Sezzle Spend.”
The certified B Corp is giving away more than 1,400 prizes to participating shoppers. While only one winner will be awarded an Airstream, four winners will get the “free” rent, which pays $12,000. The Airstream winner can elect to instead choose $40,000 in winnings.
Those looking for $1,000 travel vouchers can follow Sezzle’s Instagram account for weekly chances to be one of 12 winners. Participants must comment on the designated posts with the hashtags #SezzleTravel and #Sweepstakes.
“This campaign is a rewarding way for Sezzle to thank our users and retail partners, and presents us with a fantastic opportunity to introduce Sezzle to new shoppers,” Veronica Katz, Sezzle’s chief revenue officer, said. “As a B Corp, ethical initiatives are a pillar of Sezzle’s mission, and this year we want to get down to the basics. Through rent gifting, charitable donations, and thousands of prizes—we want to ease the financial burden that holidays can often bring.”
The remaining reward, Sezzle Spend, is free credit that can be used toward purchases using the platform. Participants can win up to $500 in Sezzle Spend, usable on the Sezzle website or app within 90 days after issuance.
Winners of travel vouchers and Sezzle Spend will be awarded every week. Winners of the Airstream and free rent will be announced by Feb. 7, 2022.
Amazon still tops Black Friday market share
While BNPL providers are pushing to make a bigger impact on the holiday season, the king of e-commerce once again showed that consumers are flocking to its marketplace in droves. Amazon has captured the highest share of Black Friday 2021, at 17.7 percent of total retail sales, according to a survey from Numerator.
This is the second year in a row Amazon has led the shopping bonanza in market share, further representing the continued trend toward online shopping. Overall, online shopping share grew again this year to 38.1 percent of overall Black Friday sales, up 11.5 points from 2020, Numerator found.
Amazon was the top retailer for all generations except Gen Z, who spent more of their Black Friday dollars at Walmart (12.7 percent). The e-commerce giant also saw its share decline in that age demographic, down 1.3 points to 11.1 percent.
Walmart and Target both gained share with Gen Z compared to 2020, particularly in stores. Gen Z and millennials have a higher share of spend at Target, at 8.5 percent and 8.3 percent, respectively, than their Gen X (5.4 percent) and baby boomer (2.4 percent) counterparts.
High-income shoppers worth more than $80,000 drove the largest growth in online share, which jumped to 44.1 percent of total sales, but Amazon’s share grew more with low-income shoppers worth less than $40,000. Online shopping gained 14.1 percentage points of market share among high-income shoppers, while it gained 6.2 points among low-income shoppers.
Amazon grew share with all income groups, but most significantly with middle income consumers. Costco and Best Buy in-store locations saw the largest share declines in total, with online gains not large enough to offset losses. While Costco declined 0.9 percentage points to 3.9 percent, Best Buy dipped 0.8 percentage points to 4.6 percent.
Numerator tallied its data from TruView solutions, which tracks market share data across retail.
Black Friday loses luster on early promotions, inflation, shortages
The market research company also developed Cyber Weekend survey results from more than 4,000 respondents throughout the weekend, confirming that early Black Friday deals pulled in more shoppers this year. Nearly two-thirds (63 percent) said they shopped early deals before Thanksgiving in 2021, compared to 52 percent in 2020, Numerator said.
And as has been widely discussed in larger macroeconomic circles, inflation clearly made an impact on a fair share of shoppers this year.
Of the 22 percent of consumers who said they spent more on Cyber Weekend 2021 than last year, 33 percent attributed their higher spend to rising prices. Among those who claimed they spent less this year, 30 percent said it was because they had less disposable income due to rising prices on everyday goods.
Alongside inflation-related trends, inventory shortages have been a common theme throughout 2021 leading into the holiday season. Numerator said 35 percent of Cyber Weekend shoppers said they were not able to buy everything on their list this year, up from 32 percent in 2020. The top reasons indicated were out-of-stocks (43 percent) and being unable to find items (38 percent).
The out-of-stocks are even more concerning when accounting for the fact that more consumers planned for Cyber Weekend in advance this year. Ninety-one percent of respondents said they planned ahead, up from 84 percent in 2020. More than half (57 percent) knew more than a week in advance that they would shop.