The Ratings Game: The big winner of the holiday shopping season so far: Buy now, pay later

by | Nov 28, 2022 | Stock Market

The holiday shopping season, a crucial one for retailers, has so far yielded one surprise winner: buy now pay later, or BNPL, the payment trend that allows consumers to pay a bill over time. Orders using BNPL rose by 68% in the week through Nov. 27 compared with the previous week, according to Adobe data released on Monday. Overall revenue from BNPL was up 72% in the same time frame, the data showed.

Ahead of the post-Thanksgiving Day shopping bonanza, Deloitte was predicting a big increase in the use of BNPL, with a survey finding 37% of shoppers planning to use it to cover holiday spending. See now: More people using ‘buy now, pay later’ for holiday shopping, but experts urge people not to overspend Salesforce data cited by RetailDive.com found shoppers increasingly using BNPL for low-priced goods and not expensive ones. The average value of a BNPL transaction was down 6% on Thanksgiving Day, a sign of how inflation is affecting behavior. Buy-now-pay-later services come with various options and payment periods. Some let consumers break payments into interest-free chunks, and others charge simple interest. Affirm Holdings Inc.
AFRM,
-3.82%
is a pure play on the BNPL trend, while PayPal Holdings Inc.
PYPL,
-0.19%
and Block Inc.
SQ,
-3.17%
also offer tools that let consumers break up purchases. The holiday season appears to be off to a solid start, with online sales topping $9 billion for the first time, for a 2.3% increase on the year-earlier period, according to Adobe data. Electronics were the major driver of the increase in sales, with online sales up 221% over an average day in October 2022, according to Adobe, which tracks sales on retailers’ websites. Smart-home items were up 271% and audio equipment 230%. Toys remained a strong category, with sales rising 285%, while sales of exercise equipment rose 218%. Don’t miss: Cyber Monday is here — is that still a thing? Adobe is now expecting Cyber …

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