Holiday expenses Checkout Innovation, BNPL | So Good News


This holiday season, check out last minute — whether it’s at the register, at a self-service kiosk or especially Hovering over a buy online button can make or break a merchant.

It’s no secret that consumerism is narrow, this spirit of giving comes up against the hard, cold reality of affordability. While many Americans now live paycheck to paycheck, PYMNTS research shows that even the highest earners are not immune.

New insights into Target’s earnings this week underscored that the traditional buffers for spending — loans and savings — are being actively used.

“This year, many consumers have relied on borrowing or dipping into savings to manage their weekly budgets, but for many consumers, those options are running out,” Target CEO Brian Cornell said at the company’s conference call. “As a result, our guests are more price sensitive, more attentive and responsive to promotions, and less hesitant to shop at full price.”

The company cut its sales forecast for the all-important holiday quarter.

Wind and possibilities

There are headwinds, but there are also opportunities. In a context with personalized financing options, merchants and providers who offer innovation at the checkout stand a better chance of sealing the deal.

Consumers are ready. A report by PYMNTS and LendingClub, The New Reality Check: Paycheck to Paycheck Report: Holiday Shopping Edition, found that nearly four in 10 Americans will finance the holidays. The data shows that consumers experiencing financial difficulties are more likely to rely on other payment options. While 59% of consumers planning to do their holiday shopping say they will use buy-now, pay-later (BNPL) financing, that share rises to 71% among paycheck-to-paycheck consumers with bill-paying issues.

But having these options at hand won’t be enough for merchants to compel consumers to pull the trigger. Timing is of the essence, according to “During Checkout: Deal Chasers Are Loyal Customers,” a separate study developed by PYMNTS and Across more than 2,000 consumers and several personas—including “loyal” customers and “deal hunters”—about a third of all groups spent less than 30 minutes online to complete their purchase. More than 80% of all shoppers said being able to use their preferred payment method was one of the most important features at checkout.

Three-quarters of people surveyed believe that a satisfying checkout process that includes multiple payment options keeps customers coming back.

When it comes to the greenfield opportunity ahead for BNPL and for expanded promotions across digital channels, BNPL has only received low single digit percentage of sales wherever you look (see chart). If only 26% of consumers prioritize buying from preferred merchants over finding the best deal, then it’s affordability and financing options that win the day.

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How customers pay online with saved credentials
Convenience prompts some consumers to store their payment credentials with merchants, while security concerns put off other consumers. In collaboration with Amazon Web Services, for How We Pay Digitally: Stored Credentials Edition, PYMNTS surveyed 2,102 US consumers to analyze the consumer dilemma and determine how merchants can overcome holdups.


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