Extreme economic difficulties have made it important for every store to focus on influencing consumer behavior and accepted practices. A thorough rethinking of how to make the consumer journey from product browsing to enjoyment hassle-free is required in this new world, where changes to the format of the shop and portfolio alone won’t work. Buy Now Pay Later has enabled consumers to be flexible in their shopping habits.
Let us read more about the schemes and theorems of BNPL.
New Retail Theorem
Retailers are under intense pressure from all sides to remain competitive. Competition is becoming more difficult as a result of customers’ declining purchasing power, rising commodity costs, increased worldwide demand, and an emerging technology retail environment. Retailers must realize that customers are searching for the fundamentals, or ABCDE – augment the brand experience by connecting with customers and providing quality technology experience. Retailers must create better applications to improve each step of the consumer purchasing trip if they want to stand out in these historic times.
A Practical Financing Method
Fortunately, the concept of Buying Now and Paying Later (BNPL), a novel take on layaway that frequently includes an interest-free period in contrast to a credit card, has made the fantasy of every shopaholic a reality. BNPL is a new financial revolution in making retail future-proof among the many strong new chances in this unimaginable catastrophe.
Globally, the BNPL market is anticipated to expand at a CAGR of 21.2 percent, from $7,320.6 million in 2019 to $33,638.3 million in 2027. On a corporate level, Pine Labs payment terminals reported Rs 1,700 crore worth of sales through the BNPL option in October after processing payments from lenders. Consumer durable purchases increased by 49% for the company during the July–September quarter.
What is in it for Retailers and Customers?
For retailers, BNPL companies, and customers, BNPL has shown to be a win-win situation. A predetermined fee of 4-6 percent of the sales price as revenue is expected of participating merchants with BNPL. Despite the high cost, the merchants’ business strategy depends heavily on volume benefits and loyal customers. In the event of a payment default, certain businesses do impose fines on the customers. It is a free option for the consumer to pay at a later time.
Major e-commerce operators collaborated with financial services firms to develop promotions encouraging digital transactions rather than cash on delivery during their “Big Billion Days” and “Great Indian Festival.” Along with traditional digital payment methods, BNPL services were available during the holiday season. More and more customers are embracing BNPL’s services, which include rapid credit for small-ticket transactions at no additional cost, instant refunds, and a quicker and safer checkout experience.
Fintech and the Younger Generation
According to experts, as technology has advanced and the internet has been more widely used, today’s tech-savvy millennials are seen to be leaning more and more toward ease, and the BNPL system provides exactly that.
The young generation’s engagement with Klarna has received praise from Jeff Gennette, CEO of Macy’s.
According to Gap’s Chief Digital and Technology Officer John Strain, their target market has changed to be younger people as a result of their cooperation with Afterpay.
BNPL and the Indian Holidays
With the aid of apps like Simple, LazyPay, Paylater, TruePay, and others, the adoption of BNPL was observed to be on the higher side during the Indian festival season. With an increasing number of traders, banks, and installment suppliers now providing this service, BNPL is gradually and steadily acquiring control/power in the Indian market. Amazon, Myntra, Yatra, MakeMyTrip, ZoomCar, Uber, Royal Sundram, SBI General Insurance, Upgrad, ExtraMarks, Apple, and Croma are just a few of the biggest retailers transforming their online payment and shopping ecosystems in India.
With a trust in the UPI (unified payments interface) option, this adaptable no-cost EMI alternative is meeting consumer needs across all categories. Banks including Kotak Mahindra, Federal, Axis, and BOB Financial Solutions were very pleased with the participation of more than 30 companies with PineLab cooperation and campaigns like #Choti MIP Big Celebrations and #Khushiyon Ki UnMasking. Not to be overlooked, US-based company Sezzle has already begun a test and is integrating with UPI Platform at the same time.
The Bottom Line
Because BNPL gives customers instant satisfaction, Afterpay has renamed its buy-now, the pay-later programme “enjoy now, pay later” to reflect the arrival of this new technology. It eases the BNPL application process as the demand of CIBIL score online is also not strict. Even though it appears that consumers are acting differently these days, they are actually listening, thus businesses must adjust their strategies accordingly. When converting customers’ interest in this novel situation, your voice should be captivating and real.