1、BNPL REPORT 2023Buy Now,Pay Later US:a 360 impact studyTHE RISE OF BNPL14-18Market impact19The future3Executive summary4-5Key stats6-8Market landscapeBNPL classificationMarket sizeLeading players9-13Consumer insights DemographicsReal user exampleConsumer usage and purchase behavior CONTENTSBNPL REPO

2、RT 20233BNPL REPORT 2023 EXECUTIVE SUMMARYThe decline of cash,married with the unprecedented rise of ecommerce,has led to the digital payment space not only growing(well,exploding),but also diversifying.The rise of“Buy Now,Pay Later”(BNPL)as an online payment solution is reflective of the market con

3、ditions that have promoted and accelerated it:a perfect storm of digital disruption,economic downturn,and a shift to millennial and Gen-Z spending power.BNPL has been taking an increasing share of the digital payments pie over the past few years market value estimates vary,but its already in the hun

4、dreds of billions.Through behavioral data analysis of multiple consumer goods categories,our report uncovers a clear gap between ecommerce sites using BNPL technology and online retailers that dont.In fact in some categories the gap is stark.For instance,in the Luxury and Jewelry category,we saw con

5、verted visits are down 73%year-over-year(YoY)for online retailers that dont provide BNPL.It comes as no surprise that during Ins DurandSenior Market Insights Manager at Similarwebthis economic downturn,conversions have decreased across the board.However,for that same category,converted visits were o

6、nly down 16%YoY for retailers using BNPL.And in consumer electronics,the category with the biggest monetization potential from BNPL,our survey data shows that 26.7%of consumers using BNPL to purchase consumer electronics would not have bought these products without this financing option.Our survey r

7、esults,mixed with our unique online behavioral data,shows that while BNPL isnt necessarily the magic bullet to a tough economic landscape,it gives consumers more flexibility,which results in real sales retailers may have otherwise missed out on.In this 360-degree impact report,we see fascinating ins

8、ight into who is using BNPL(spoiler:its not just Gen Z),the reasons why they are using it,and the impact it can and is having on business bottom lines.Whether youre a digital disruptor or in the throes of digital transformation,one thing is clear:its a consumer-centric landscape and BNPL cannot be i

9、gnored.4BNPL REPORT 2023 MarketKEY STATS$300B BNPL market size is estimated at$241B and is likely to rise to$300B in 2023,and projected to stand at$526B by 202637%of US citizens have used BNPL and 27%within the last 12 months(as of Jan 2023)58%of BNPL users said their primary reason for usage was th

10、e longer to pay terms+200%Monthly active users for the top six BNPL providers in Jan 2022 was 11.2M-200%growth from 202159%Of those economically worse-off this year,59%chose BNPL as it was the only finance method available+21.1%Desktop&mobile traffic to the 14 biggest BNPL providers grew 21.1%CAGR b

11、etween 2020-2022,from 236.8M visits in 2020 to 420.8M in 2022(US)25-34 YOThe biggest age group to use BNPL is 25-34 year-olds,without significant gender differenceConsumers*survey conducted on a representative sample of 2509 U.S.Consumers5BNPL REPORT 2023-11%-11%YoY in converted visits for merchants

12、 not offering BNPL solutionsKEY STATS26.7%BNPL had the biggest impact in the consumer electronics category,with 26.7%of consumers using BNPL declaring they would not have bought these products without this financing optionRetailers correspond to the top 291 e-commerce players(without the marketplace

13、s)from the Fashion&Apparel,Beauty&Cosmetics,Consumer Electronics,Jewelry&Luxury and Home&Garden categoriesMonetization Efficiency of Retailers2%YoY increase in converted visits for merchants using BNPLwith BNPLwithout BNPL+2%6BNPL REPORT 2023 MARKET LANDSCAPEBuy Now Pay Later,known as BNPL,does exac

14、tly what its name suggests:Offers consumers the chance to purchase a product online and pay for it later.Financing isnt new;however,BNPL is different from other financing options as most providers dont charge interest.While there are more established online payment providers,such as PayPal,that offe

15、r their own versions of BNPL,in this report,we focus on those that offer BNPL exclusively,such as Klarna and Afterpay.Through this data,weve been able to understand the growth and impact of this solution on the market.7BNPL REPORT 2023 MARKET LANDSCAPEMarket sizeThe BNPL market size was valued at$14

16、1.8B in 2021,and is predicted to rise to$596.7B by 2026(according to GlobalData estimates).With Similarweb data we see increased traffic share to BNPL providers within the payment landscape in the last 3 years:Traffic share per 100%payments provider USDesktop&Mobile Web,2020-2023BNLPShopifyGoogle Pa

17、yAll other payments100%75%50%25%0%3yr ago2yr ago1yr agoFebruary 2023AydenPaypal+42.9%+24.3%Desktop&mobile traffic to the 14 biggest BNPL providers21.1%CAGR between 2020-2022,from 236.8M visits in 2020 to 420.8M in 2022500M400M300M200M100M0M420.8M338.3M 236.8M2020-01 to -01 to -

18、01 to 2022-128BNPL REPORT 2023+200%YOYGrowth of monthly active users(to 11.2M a month)for the top six BNPL Android&iOS apps,2022 vs 2021Klarna-All devicesAfterpay-All devicesZip-All devicesAffirm-All devicesSezzle-All devicesPerpay-All devicesThe big six BNPL players are:Klarna,Affirm,Afterpay,Sezzl

19、e,Zip and PerPay.Australian player Afterpay is the leading provider for the US market,although this position is increasingly challenged by Swedish firm Klarna&San Francisco-based Affirm.Leading players Growing app usageMonthly unique users per BNPL apps(Android&iOS)US,App,February 2021-January 20226

20、.0M4.0M2.0M0.0KFeb-21Oct-21Jun-22Jun-21Feb-22Oct-22Apr-21Dec-21Aus-22Aug-21Apr-22Dec-22Mar-21Nov-21Jul-22Jul-21Mar-22Nov-22May-21Jan-22Sep-22Sep-21Mey-22Jan-23While there is most likely usage overlap between the different BNPL providers available in the US,it is clear that they are becoming a popula

21、r way for customers to pay for their purchases online and in-store;combined monthly active users for Klarna,Affirm,Afterpay,Sezzle,Zip and PerPay rose by over 200%from 5.7M in February 2021 to 11.2M as of January 2022.In a Similarweb survey,37%of respondents(US based)had used a Buy Now Pay Later tec

22、hnology,and 27%in the last 12 months as of January 2023(note that survey was in app).9BNPL REPORT 2023 CONSUMER INSIGHTSConsumer behavior is not uniform for all Buy Now,Pay Later users,and our data highlights key differences.Our surveying capabilities allowed us not only to survey a representative s

23、ample of 2509 US consumers in January 2023,but also to analyze their online behavior and spot gaps between declarative answers around BNPL usage and the reality.In this next section,you will find how the age group and gender are differentiation factors into how consumers leverage BNPL for their purc

24、hases.10BNPL REPORT 2023 CONSUMER INSIGHTSDemographicsDemographics split for monthly active usersUS,Android&iOS apps,2022Growth opportunities exist across every demographic,but especially with the emerging spend-power of Gen Z,and the increasing adoption of new tech from Gen X and Boomers.53%Male47%

25、Female17%40%28%10%4%18-24 yo25-34 yo35-44 yo45-54 yo55+yo40%40%of BNPL users belong to the 25-34 years-old age group11BNPL REPORT 2023 Consumer motivationsQuicker,simpler and cheaper can represent convenience over traditional finance options.Most BNPL providers dont charge interest,which automatical

26、ly makes purchases through it cheaper.The application process for BNPL is also easier than for traditional finance,backed up by 31.9%respondents saying it was the only finance option open to them.BNPL apps have been made with consumers in mind-they have excellent user experience and are quick and ea

27、sy to use,which is reflected in both the motivation and repeat usage figures.There is a note of caution for retailers,with 21.2%of respondents saying the primary reason for using BNPL is to try before pay.This has been particularly prevalent in the fashion space,but is likely to spread into other ca

28、tegories,such as jewelry,luxury,and consumer electronics.26%35%of female BNPL said using BNPL was their only financing option and had no alternative for payment,versus only 28%of male BNPL users26%of 18-24 year-olds declared their reason for using BNPL as Try-Before-Buy vs the average of 16%for othe

29、r age groups.This behavior can cost a lot of money in returns for retailers35%28%VSQuickerSimplerCheaperLonger to payTry before payOnly finance optionOther reason53.1%16.1%21.1%28.4%21.2%31.9%1.9%12BNPL REPORT 2023 Expert commentaryWhile there are those who use BNPL because they have no choice,the m

30、ajority dont need to use it,but choose to.The biggest reason for it is longer to pay,i.e.spreading payments,and we see evidence of people using not only using it for fashion or one-off,larger purchases,but also on everyday purchases in marketplaces like Target,Walmart and even DoorDash.Similarweb be

31、havioral data shows people who actively shop online and are on trend lean towards using BNPL more than others-so capturing this engaged,active audience is an opportunity for businesses.Understanding audience demographics and consumer trends helps businesses become truly customer-centric,as age group

32、s differ in purchase interests and in product life-cycles.Real user insight“I started using BNPL in 2021.I first decided to use it having seen it as a payment option on some fashion websites,and I thought it seemed like a good idea to spread payments,without the interest.I would have usually used a

33、credit card for purchases like this in the past,but BNPL is cheaper and still builds up your credit score,so it makes more sense for me.I use Klarna,and regularly shop at Farfetch or Adidas,although I could afford paying in one go.Recently,I started using BNPL for home appliances purchases.“Age:26Ge

34、nder:MaleLocation:New York,US Job:Investment Associate13BNPL REPORT 2023 Monthly unique users for all Buy Now,Pay Later apps combined,Android&iOS)US,app,February 2021-January 2022Usage peaked around the holiday season,but was lower during 2022 than during 2021 due to a decrease in consumer spending

35、in the last few months.Consumer Usage and Purchases15.0M10.0M5.0M0.0KFeb-21Oct-21Jun-22Jun-21Feb-22Oct-22Apr-21Dec-21Aus-22Aug-21Apr-22Dec-22Mar-21Nov-21Jul-22Jul-21Mar-22Nov-22May-21Jan-22Sep-22Sep-21Mey-22Jan-2372%62%35%48%72%of 25-34 year-olds used it for fashion purchases in the last 12 months.W

36、ith a return to the gym,we found this age group used BNPL to fund sportswear purchases(28%)more than other age groups(22%).62%of Gen Z shoppers of consumer electronics used BNPL to buy Gaming Consoles.25-34 yo|Fashion&ApparelGen Z|Gaming Consoles35-44 yo|Fashion&Apparel25-35 yo|Home AppliancesOver 3

37、5%of 35-44 year-olds who made a fashion&apparel purchase through BNPL used it for workwear in the last 12 months.48%of 25-35 year-olds used BNPL for home appliances purchases as they move into their first home,more than any other age group(avg.37%).14BNPL REPORT 2023 MARKET IMPACTNot only does BNPL

38、help consumers spread the cost of their purchases over time,but it can also be a powerful conversion tool for merchants.While BNPL is a nice to have in categories with lower price points such as Beauty&Cosmetics,our data highlighted huge discrepancies in converted visits YoY change in several catego

39、ries,emphasizing potential additional revenue losses for retailers that dont offer more payment options to their financially stranded customers at the point-of-sale.15BNPL REPORT 2023 MARKET IMPACTMeasuring market impact of BNPLMerchants using BNPL convert more customersSimilarweb analyzed 291 US me

40、rchants in several categories of consumer goods:Beauty&Cosmetics,Consumer Electronics,Fashion&Apparel,Home&Garden,Jewelry&Luxury,looking at YoY converted visits and conversion rates for merchants offering Buy Now,Pay Later at checkout against those who dont.2022 was not the year online retailers exp

41、ected or needed-the overall market conditions were tough and spending was down across the board.However our study revealed that US merchants that offer Buy Now,Pay Later solutions saw on average better YoY converted visits(+2%)performance than those who dont(-11%).This gap is more pronounced in cert

42、ain industries.Beauty&CosmeticsConsumer ElectronicsFashion&ApparelHome&GardenJewelry&LuxuryMind the gap:the cost of not having BNPLDesktop converted visits YoY change for retailers without BNPL(2022 vs 2021)Desktop converted visits YoY change for BNPL-equipped retailers(2022 vs 2021)-14%5%-17%-11%-3

43、%-19%-7%-6%-1%1%16BNPL REPORT 2023 For all categories analyzed,we see that merchants without BNPL had poorer performance compared to those who offer the payment solution.Within the context of high inflation and lower consumer spending,every conversion counts.On average,merchants with BNPL saw a 0.5%

44、increase in conversion rate and a 2%hike in converted visits,vs.a drop of 0.2%in conversion rate and-11%in converted visits for those without the technology.The category gaining the biggest boost from BNPL adoption is consumer electronics,which we have spotlighted(on the next page/below).Another str

45、ong performer was the Fashion and Apparel category,which bucked the trend of overall decline,but had an increase in extra converted visits for BNPL merchants(+5%vs+1%without).From our survey data,we saw this was the biggest category for BNPL users-with 47%of respondents using it for Fashion and Appa

46、rel websites.We see a general trend in BNPL adoption for more expensive items,consumer electronics being one category and luxury and jewelry being another.Non BNPL-enabled sites in this sector aced a huge 19%decrease of converted visits,whereas sites with BNPL tech only dropped 5.5%.With both conver

47、sion and traffic analysis we see the impact of BNPL on bigger ticket items:jewelers such as J,B,and D,whose engagement rings are priced between$500-$15,000 dollars,offer BNPL alongside traditional financing options.Their converted visits skyrocketed YoY,growing by 90%,27%and 22%respectively,versus a

48、n average drop in converted visits of-10%YoY for all jewelry and luxury products retailers in our competitive set.Expert commentary“Analyzing YoY traffic and converted visits across a market give us a clear view of website benchmarks.These are metrics we suggest every business monitor and analyze,es

49、pecially in a post-Covid world,where both the online and macro economic landscapes are facing significant and frequent changes and challenges.Moreover,monitoring which etail technologies your successful competitors are using can be particularly helpful to spot any conversion rate optimization opport

50、unities.“Merchants using BNPL convert more customersFashion&Apparel spotlightLuxury&Jewelry spotlight17BNPL REPORT 2023 Consumer Electronics spotlight Consumer Electronics retailers had the most significant advantage by offering BNPL solutions BNPL-equipped retailers saw a drop of desktop converted

51、visits of only-0.6%,while retailers without BNPLs converted visits fell by over-17%YoY 26.7%of consumers using BNPL for consumer electronics would not have been able to buy without this financing option,representing an additional potential drop of demand for the categoryExpert commentary“The rise in

52、 BNPL usage for consumer electronics is telling.Traditionally,retailers have associated this payment method with fashion,beauty,or other smaller yet,more frequent purchases.With the stagnation of wages,and the cost of living crisis growing,we are seeing online consumers turn to BNPL for more expensi

53、ve,one-off purchases.Concurrently,we also see more consumers opting to rent electronics rather than buy,so the landscape is tough,and retailers need to pivot their offerings and payment methods to capture the audience.“18BNPL REPORT 2023 From the last 70 days(Nov 1 2022-Feb 20 2023),we see the surve

54、y data as reflected of online behavior.We also see that frequent BNPL users use it for more regular purchases in marketplaces like Target and Walmart.Usage on DoorDash was also high.While there are those who use BNPL because they have no choice,the majority dont need to use it,but choose it.People w

55、ho actively shop online and are on trend lean towards using BNPL more than others-so capturing this engaged,active audience is an opportunity for businesses.We see an affinity between BNPL users and the platform TikTok.Klarna has capitalized on this with its focus on TikTok marketing,amassing 2.7B v

56、iews on the platform.Klarna is also spending big on advertising campaigns and brand ambassadors:Paris Hilton is featured in its latest campaign.The top BNPL providers design their service to be easy additions to an online stores payment journey.In fact,with growing usage of the providers,many retail

57、ers now offer 2+BNPL providers as payment methods in a bid to up conversion rate.When choosing a BNPL provider,or providers to partner with,there isnt too much between them on the surface.Although there are slight differences in providers user demographics and interests,which should be taken into co

58、nsideration:Affirm has the higher share of users aged 45+,16%vs 12%on average.Among the top 20 websites ranked by cross-visitation,five of them are consumer electronics retailers,making it a preferred partner for the category Afterpay users are most common among Fashion retailers in the 20 most cros

59、s-visited websites.Female consumers between 25-34 years-old represent 1/5 of its user base,and are the most likely demographic to use BNPL for fashion Klarna paragraph change directly to:Klarnas top 20 overlapping sites show that the provider is trying to break into every retail category,with the mo

60、st even distribution:seven marketplaces,seven fashion retailers,two beauty&consumer electronics,and one in Home&Garden and Groceries Klarna top 20 overlapping sites show that the provider is trying to break into every retail category,with the most even distribution;7 marketplaces,7 fashion retailers

61、,2 beauty&consumer electronics,1 in Home&Garden and GroceriesHow to target these usersChoosing the right BNPL provider for retailers19BNPL REPORT 2023 THE FUTUREWith the market size of BNPL set to grow to$500B by 2026,the adoption and prevalence of this technology is far from saturation point.From b

62、uyer journey analysis,we already see a gap in converted visits for websites with and without BNPL,and we see evidence of BNPL growing and impacting other sectors with high price points,such as travel.While it looks like all ecommerce sites cant afford to ignore BNPL,it is wise to also treat it with

63、caution.As of yet,BNPL is an unregulated finance option.While the majority of BNPL users declared their primary reason for use as either a quicker,simpler and/or cheaper option available to them.Data from our survey also shows recent changes in its usage,with 19%of respondents declaring using BNPL t

64、o buy groceries in the last 12 months;its use to finance everyday purchases is a worrying trend that should not be overlooked.In fact,it mostly boils down to the fact of wanting to finance over time,rather than pay the full amount upfront.Its the same as credit cards and short-term loans,without the

65、 additional cost of interest and hassle of paperwork.In a landscape of economic downturn,and increased presence,advertising and awareness of BNPL is likely to keep eating into the more traditional finance market.Banks,and financial institutions arent likely to sit back and let more of their pie get

66、taken without challenge.Depending on how and when BNPL is regulated,it could lose its USP of being readily and easily available to all.Moreover,although it has proved to be useful to retailers,it is worth interrogating the future of BNPL companies as interest rates increase;BNPL businesses already h

67、ad to proceed in workforce cuts to offset rising costs,and we may question if this type of lending will remain free forever for the consumers,unless BNPL providers tech is acquired and integrated by larger financial institutions that can afford offering this service to their customers.While regulati

68、on could be seen as a risk and barrier to entry for BNPL,which doesnt exist today,it could make the finance option more appealing for the more cautious shopper.Gen X and Boomers adoption isnt as high as the younger generation-financial regulation could generate positive publicity and adoption for BN

69、PL for these age brackets in the long-term.The other risk is the rise of Gen-Z spending habits.In our survey,the Try-Before-Pay reason to use BNPL was most represented within the 18 to 24 years-old user group(26%vs 16%average for all age groups),with this behavior costing a lot of money in return co

70、sts for retailers,not to mention the environment.Overall,the technology has found a sweet-spot for consumers and retailers-it makes shopping easier.Although there could be challenges coming in the future,BNPL already has a core user-base,excellent public awareness and growing adoption industries bey

71、ond ecommerce retailers(travel being the primary example),we see this as an emerging tech thats here to stay.BNPL REPORT 2023Lead authors&insights:Ines Durand|Senior Insights ManagerMarta Sulkiewicz|VP Global Research SolutionResearch&data:Lewis Jennings|Advisory Services Research&Analytics Team LeadJustin Neville Rolfe|Senior Product ExpertLev Tsipes|Data specialistEkaterina Rugo|Data specialistChief writer:Adelle Kehoe|Director of ContentDesign&editorMolly Winik|Senior Content Marketing ManagerShirley Ohava|Brand D