Key Takeaways:
- Men are more inclined to use Buy Now, Pay Later (BNPL) options for Black Friday shopping, with a notable increase compared to women.
- The surge in BNPL usage is driven by the escalating cost of living, with consumers planning to spend over £100 on average during Black Friday.
- Regulatory oversight boosts consumer confidence in BNPL, leading to increased adoption by businesses and shoppers alike.
A Shift in Shopping Behavior: BNPL Takes the Lead
As the Black Friday shopping frenzy approaches, a significant trend is emerging: the increasing reliance on Buy Now, Pay Later (BNPL) services, especially among male shoppers. This shift, as revealed in new research from Ecommpay, underscores the changing dynamics of consumer spending in the face of economic pressures.
Men Lead the BNPL Trend
The study highlights that 44% of male shoppers are likely to use BNPL services this Black Friday, a higher percentage compared to 35% of women. This trend is attributed to the rising cost of living, with 39% of consumers citing inflation as a key factor in their decision to use BNPL services more in 2023.
Black Friday Spending: Navigating the Cost of Living Crisis
Black Friday, originally an American phenomenon, has gained traction in the UK. Amidst rising prices, about 28% of consumers who shopped during last year’s Black Friday plan to increase their spending this year. The average spending during the 2022 Black Friday was £101.18, with men spending more at an average of £134.72.
Younger Generations Embrace BNPL
The younger demographic, particularly those between 25 and 44 years, are more inclined to explore BNPL options for their Black Friday shopping. This indicates a strategic shift in how younger consumers are managing their finances amidst the cost of living crisis.
Consumer Confidence in BNPL Grows
The increasing popularity of BNPL is also fueled by growing consumer confidence in the service. Early in 2023, BNPL lenders became subject to regulatory oversight by the FCA, which increased awareness and comfort in using the service. 56% of consumers are now aware of these new regulations, with 30% feeling more comfortable using BNPL.
The Impact of Regulation on Spending Habits
Interestingly, the perception that BNPL encourages overspending has decreased, dropping from 58% in 2022 to 52% in 2023. This suggests that regulatory interventions are building greater consumer confidence in responsible lending practices.
Businesses Respond to BNPL Demand
Reflecting the consumer trend, a significant proportion of businesses now offer BNPL as a payment option, with 59% including it in their checkout processes, up from 42% in 2022. The majority of these businesses have noticed an increase in customers using BNPL as inflation rises.
BNPL Promotion During Black Friday
With Black Friday representing a crucial period for retail, 65% of businesses offering BNPL plan to promote its use during this period, aligning with the growing consumer preference for flexible payment options.
Conclusion: A Paradigm Shift in Consumer Spending
The rise in BNPL usage, particularly among men and younger shoppers, marks a paradigm shift in consumer spending behavior. As economic challenges persist, BNPL offers a viable option for managing finances, supported by increasing regulatory oversight and growing business adoption.
Methodology: The research was conducted by Ecommpay in collaboration with Censuswide, surveying 2,001 UK consumers in September 2023. A previous survey in March 2022 by the same collaborators involved 1,001 UK consumers. This study provides insights into the evolving trends in consumer spending and payment preferences.
For more information on the study and its findings, visit Ecommpay’s Research.
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