Member Exclusive   //   June 20, 2024

Research Briefing: How are retailers using buy now, pay later

By Li Lu

In this edition of the weekly briefing, we examine how retailers are using buy now, pay later tech as seen in data from Modern Retail+ Research.

Interested in sharing your perspectives on the future of retail, technology and marketing?

Apply to join the Modern Retail research panel.

Apple sunsets its buy now, pay later plans

Breaking News: Apple has announced that it will no longer offer its buy now, pay later (BNPL) plan through Apple Pay. Instead, it plans on integrating third-party BNPL companies, like Affirm or Klarna. The BNPL industry has continued to grow in popularity. The Consumer Financial Protection Bureau has voiced interest in regulations, but currently, regulations are dependent from company to company. As a result, many companies have opted to work with third-party BNPL companies rather than build out their systems. 

Questions: What are the trends for retailer usage of BNPL programs? Are strategies different between industries?

Answers From Research: 

The Modern Retail Index gives some context about how major retailers are adopting certain payments programs. For example, among the drug store cohort, BNPL programs were not prioritized – the lowest score drugstores received was for online payment options. Walgreens and CVS only accept PayPal for online orders. Rite Aid increased the cohort average by allowing more quick-pay options like Apple Pay and Google Pay, as well as perks for American Express members.

The dollar store cohort on the other hand is working to modernize their checkout experiences through digital offerings like online coupons and digital payment options. Dollar General added PayPal payment to its online checkout options. Dollar Tree expanded its PayPal partnership and now accepts PayPal Credit as a buy now, pay later payment option for customers. 

The industry with the most different strategy was the home goods cohort. Retailers like Lowe’s did not score well for payment options due to only accepting PayPal online. However, many of the home goods retailers offered their own financing and buy now, pay later options for customers, as well as a subscription service to save on recurring purchases. Unlike other industries, the group has always had big-ticket items that many customers look to finance and as a result, home goods retailers have built out their own BNPL programs.

Want to learn more: The Modern Retail+ Index examines how other retailer categories are utilizing BNPL programs and how it differs by industry.


See research from all Digiday Media Brands:

Modern Retail+ Research
Digiday+ Research
Glossy+ Research