The Australian buy now, pay later provider’s analysis of 16 million global users and 100,000-plus brands and retailers offers a compelling look at where shoppers are devoting their dollars, and why. Recent strong spending on small adornments like hair bows and barrettes could signal that “Americans are finding fashion to be more functional, buying elevated basics and leaving it to accessories to add a personal touch,” according to Afterpay, which counts the United States’ 10.5 million active users as its largest market.
Pandemic dress codes are finally beginning to evolve toward practicality and versatility in lieu of loungewear, said Afterpay fashion futurist Geraldine Wharry.
“Dress codes have become much more elastic, as people have rewritten the playbook on how to dress for the day-to-day,” she said. “We’re seeing a shift to layering and closet staples that are both comfortable and can carry over from season to season and indoor to outdoor, combined with items that allow for self-expression.”
Buying fashion for specific places or occasions is “a thing of the past,” Wharry added, noting that budget constraints, environmental awareness or shifts in social habits have likely contributed to consumer interest in doing more with the pieces they purchase. Key basics and garments that function as wardrobe staples will be critical for retailers, as shoppers look for items that play multiple roles.
Things look a little different for the 2 million shoppers across the pond using Afterpay’s U.K. version, Clearpay. They’re leaning on the installment payments platform to acquire fashion and beauty products—in such volumes that Afterpay said the U.K. is poised to enter a “Roaring ‘20s’ era of online shopping.” Collective purchases of these categories are expected to outpace pre-Covid levels, reaching 112 billion pounds ($150 million).
Consumers in the U.K. are gravitating to pajamas. Searches for classic silky PJs have surged, especially on Sundays, Clearpay said. U.K. shoppers are also wearing their piped button-down shirts and slinky wide-leg trousers out and about, styling them with turtlenecks, vests and statement jackets, it added.
The influence of the ‘90s and early aughts is also going strong, with cropped silhouettes, bucket hats, chokers and low-waisted silhouettes dominating the fashion lexicon, Wharry said. “People experienced a loss of time perception, and nostalgia helped them feel more grounded in the present,” she said.
Buy now, pay later gains ground
Meanwhile, Afterpay is expanding its network of brick-and-mortar retail partners in time for the holiday shopping season. Nordstrom and Nordstrom Rack, J.Crew, Madewell, American Eagle, Aerie, Tilly’s, Morphe, Alo Yoga, Parachute Home, and Le Creuset will now offer the option to pay in installments when shoppers buy items in store, the company said Wednesday.
More than 25 percent of shoppers plan to make their holiday purchases in physical retail locations, and almost half said they would begin shopping early to ensure that the gifts on their list are available for purchase, according to Afterpay research.
“The current economic climate and supply chain issues have impacted the way consumers are shopping this holiday season, proving an even greater need for flexible shopping and payment options,” David Di Bene, Afterpay’s vice president of retail marketing, said. Bringing the company’s in-store payment option to new brands will give shoppers who planned to use Afterpay for holiday purchases greater freedom to shop in person or online.
As part of its newly official partnership with Westfield shopping centers, Afterpay will offer an augmented reality scavenger hunt experience at malls across the country. Using QR codes, Afterpay will lead shoppers through Westfield centers on a search for its “hidden helpers,” which will unlock deals and promotions from Afterpay-enabled retailers, similar to the mall operator’s experiential activation last holiday.
Meanwhile, competitor Klarna expanded its services, bringing its flexible payment solution to subscriptions—a fast growing business model in the lifestyle space. Consumers with annual or quarterly subscriptions and memberships will now be able to pay for them in four installments trackable, like all their other purchases, through the Klarna app.
“The subscriptions market has seen massive innovation in the last decade to meet increased demand and popularity amongst consumers,” David Sykes, head of Klarna in North America, said in a statement, pointing to data from the Subscription Trade Association showing that by 2023, 75 percent of direct-to-consumer enterprises will offer subscription models.
The offering is “a first for the market,” Sykes added. “As competition intensifies, the brands that provide the best services across value, flexibility, and a customer-obsessed experience will thrive.”
The new subscription payment offering follows established programs in Sweden, Norway, Finland, Germany, Austria, the U.K., and the Netherlands, with expansion planned for 2022.