Afterpay’s In-store Solutions Continue to Grow Amid Pent-up Demand
According to new back-to-school research from Afterpay, young consumers are looking forward to getting back in-store in a big way. In fact, the company’s survey found that 41 percent of Gen Z students plan on doing the majority of their shopping in-person this year while 28 percent plan to buy online and pick up in-store.
For the back-to-school season, Afterpay’s data shows that its consumers are shopping with buy now, pay later, or BNPL, in-stores at Lululemon, Urban Outfitters, Forever 21, Crocs and Finish Line. Indicating that the style will be all over college campuses this fall, the Crocs classic clog has been a top-selling item this season on Afterpay. Shoppers are also gearing up for a return to campus with dorm-related purchases, like pillows, storage containers and towels, topping the list from Bed Bath & Beyond.
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Notably, the company said Afterpay’s in-store partners experience higher than average order values, especially in beauty brands — who are experiencing an uplift in AOV by up to 150 percent — now that consumers are in replenish mode and prepare for a return to college campuses. At the same time, in-store purchases made with Afterpay have shown a return rate of less than 4 percent on average, which is even less than what the BNPL company has seen on e-commerce.
Despite the incredible impact that COVID-19 had on physical retail, Afterpay’s general manager of North America, Zahir Khoja, told WWD the company’s Afterpay in-store program continues to accelerate with new merchant partners and has had a rapid response to be launched. Notably, since shoppers access the Afterpay card via Apple or Google Pay, there is no additional integration time or cost to the retailer.
“In the last few months alone, we’ve integrated with a number of major retailers and brands, including Lululemon, Aldo, The Container Store, The Children’s Place and Lush Cosmetics, among others,” Khoja said. “Retailers have told us that by partnering with Afterpay in-store, they are more easily able to meet the new consumer demand of a seamless omnichannel shopping experience.”
Moreover, Khoja said, “According to the latest data, mall traffic has rebounded higher than pre-COVID-19 levels. Trips to malls were up 18 percent in June 2021 compared to January 2020, and across the country, mall visits now exceed pre-pandemic levels by 5 percent. We’re excited to see where this growth takes us in the coming months.”
As the holiday shopping season arrives, Khoja told WWD it will be beneficial to get BNPL in-stores now. Afterpay data found its omnichannel customers shop 160 percent more frequently and spend 176 percent more than online-only customers.
“The holidays are often a time of financial stress, as consumers are worried about paying for all of the gifts they need during a concentrated period of increased spend,” Khoja said. “By offering Afterpay in a physical store, the retailer is giving customers more opportunity to engage in flexible, responsible spending. [And] offering Afterpay in-store provides retailers strong business benefits, namely helping generate new customers and drive sales. By integrating Afterpay in-store now, retailers will be set up for these added benefits this holiday season.”
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