Fans of buy now, pay later solution Afterpay have a new reason to use the tool to shop for gifts this holiday season.
In October, the payment provider unveiled a contactless payment option for shoppers using the Afterpay app, allowing them to pay for purchases made in participating brands’ brick-and-mortar stores. And on Tuesday, the company said its pay-later platform will now be available to use at Lilly Pulitzer, Aritzia, Fabletics, BareMinerals, Crocs and Krewe retail stores, in addition to Forever 21, Finish Line, JD Sports, Levi’s, Skechers, Fresh, APL, Solstice Sunglasses and DSW, which launched last month.
“The fundamental value proposition remains the same as what you’re used to online,” Alex Fisher, Afterpay’s vice president of retail, told Sourcing Journal. “You’re giving customers the opportunity to shop now and pay later—always interest free—with the added perk of being able to take the product home that same day when you’re shopping in stores.”
According to Fisher, users of the Afterpay app can use the solution by setting up an Afterpay card that lives in their Apple or Google wallet, depending on the make of their mobile device. When visiting an Afterpay partner’s store, they simply “tap to transact” as they would using Apple Pay or Google Pay. Shoppers pay for just 25 percent of their purchase in store, and the remaining three payments are collected in equal installments over six weeks.
As retailers ease into an unprecedented holiday season that will likely see fewer consumers heading out to the stores, Fisher admitted that “this is not a normal time in retail.” Under normal circumstances, brick-and-mortar would be gearing up for a stampede of holiday shoppers over the Black Friday holiday. Despite mixed messages about foot traffic this season, an Engine Insights survey of 1,000+ adults says 85 percent plan to visit stores for their holiday shopping needs, and 46 percent will be on the hunt for apparel. However, Fisher says this year will be more about omnichannel solutions.
“Our in-store solution is in no way meant to replace our online experience,” she said. “It’s more to supplement, and to give customers that additional option of shopping via some combination of in-store and online.”
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Since going live last month, more than 700,000 shoppers have added the Afterpay app to their digital wallets, she said. And while the solution has only been live for about a month, Afterpay partner retailers have already noted that shoppers are choosing more full price items than sale items and buying about twice as many units per transaction. They’ve also experienced a reduction in returns when shoppers use the solution to pay for purchases.
Fisher said that dividing purchases into four installments reduces the initial “sticker shock” of a large or expensive buy. Retailers are selling more, and selling full price, helping maintain margins in a season often driven by deep discounts. “We see a lot of retailers wanting to be live before the holidays, so that they can give their consumers that option,” she said. “We have a really tangible impact on their sales.”
Amy Montoya, director of retail operations for Forever 21, said the mass-market brand added Afterpay to its stores after seeing shoppers flock to the payment solution online. “Since launch, the enthusiasm has not disappointed and we’ve seen great success and strong business results,” she said in a statement. “We’re happy to provide our customers with a fun and easy way to shop with us.”
The holiday season is a “period of concentrated spending” for shoppers buying gifts for friends, family, and even themselves, Fisher said. “The ability to take advantages of the sales incentives of those key shopping days—and being able to pay for it over time—is really, really compelling.”
Afterpay plans to roll out new retailers each week, she said, as the company continues to monitor consumers’ ever-shifting appetites. “We’re rapidly growing in terms of the the number of partners we’re adding to the program,” she said, adding that Afterpay’s philosophy has been to heed shopper demand when it comes to engaging brand partners. Social media has played a key role in that research.
“They’re very loud about what retailers they want to shop with on Afterpay,” she added. “I would say to expect to see this list continuing to grow.”