“Buy Now Pay Later is on the rise, and Black Friday acts as a prime example as to why.“
With Black Friday just around the corner, retailers are preparing for their busiest—and most profitable—time of the year. Consumers, on the other hand, are bracing for the inevitable surge in holiday spending. As the saying goes, “One person’s feast is another’s famine,” and the holidays are a perfect example of that dynamic. But for retailers to truly “feast,” they need to help customers avoid that “famine.” And so the question arises: How can they do that?
The answer may be simpler than you’d think– with industry forecasts predicting BNPL solutions as the key to bolstering sales. Buy Now Pay Later is on the rise, and Black Friday acts as a prime example as to why.
Black Friday Sales During the Holiday Season: A Lifeline to Retailers
Holiday cheer and the spirit of giving are central to the season. But for retailers, that can often translate to a financial lifeline– separating survival from success. 20% of all retail sales within the last five years occurred during the months of November and December1. Knowing this, Black Friday marks the start of retailers’ final push before the New Year. The goal? To shift from “in the red” to “in the black” 4.
The period between Thanksgiving and Cyber Monday, The Cyber Five, represents one of the biggest retail events of the year. In 2023, a record 200.4 million consumers participated in this five-day shopping spree 2. And this isn’t as exclusive to brick-and-mortar stores as it used to be. Of those 200.4 million shoppers, 134.2 million shopped online, up from 130.2 million the previous year 2. This growing blend of e-commerce and traditional Black Friday sales is a force. One that is estimated to bring in around $75 billion in U.S. sales this year 3.
Now more than ever, retailers rely on this holiday window to secure their financial stability– and for good reason. 6,189 major retail stores have announced closures this year, the highest figure since the COVID-19 crisis of 2020 5. And that’s just from major retailers. If these industry giants are vulnerable, smaller retailers are likely feeling the pressure equally, if not more.
It’s the Most Expensive Time of the Year (For Some)
The holiday season is undoubtedly a turning point for many retailers. But, it can also be a make-or-break period for customers. Customers want to spend– and are expected to spend at least 7% more this season compared to 2023, respectively 6.
However, just as businesses are struggling to thrive in the current economic climate, so too are customers. In September 2024, 75% of U.S. adults rated the consumer goods economy as either “fair” or “poor 7.” Similarly, 53% of U.S. adults reported feeling anxious about their finances given the upcoming season 8.
So, customers are still willing to spend—and even predicted to spend more. But the truth is they’re facing a lot more internal hesitation before reaching the checkout. Economic concerns are top of mind, and that will be influencing their purchasing decisions to come.
The Key to Black Friday: Flexible Consumer Financing, BNPL Solutions, & More
So how can a retailer balance the need to sell with a customer’s hesitation (yet desire) to pay?
The answer lies in removing the friction that often arises when a customer weighs their wants against their personal finances. By easing that moment of doubt, retailers can help smooth the path to purchase.
Industry trends increasingly point towards a clear solution to this challenge: consumer financing. Most often, this is seen in the form of Buy Now Pay Later (BNPL). BNPL allows shoppers to enjoy the holiday season without the stress of upfront payments. Nothing dampens the holiday spirit like the anxiety of maxing out a credit card.
BNPL companies have provided a promising payment solution towards instant point-of-sale (POS) financing. This is a solution that allows customers to pay for what they need without sacrificing what they want. Instead of choosing, they are free to enjoy both with the peace of mind that comes with flexible payment plans.
Sounds convenient, right? Customers certainly think so. In fact, 28% of shoppers plan to use buy now pay later for their holiday spending this year 9. 50% say they’re open to it 9. And 43% of U.S. holiday shoppers say the availability of BNPL at checkout influences their choice of retailer 9. BNPL is an industry standard that customers have come to expect.
So how can BNPL solutions be optimized to best benefit a business this Black Friday?
5 of The Best Practices Retailers Can Use to Boost Their Sales with Buy Now Pay Later
1. Buy Now Pay Later Does it All: POS Financing Both Ecommerce and In-Store
BNPL Companies have provided an all encompassing payment solution for both in-store and e-commerce. Black Friday customers will be using both–it’s a guarantee. To optimize sales, provide Buy Now Pay Later through all extensions of the checkout– including e-commerce.
2. Transparency is Key: BNPL Solutions Should Help to Earn Trust, Not Lose It
In 2024, Not all BNPL solutions are created equal. Each provider offers different rates and not every customer understands the difference between a favorable and unfavorable rate. This is where transparency becomes crucial. Offer a payment solution that clearly outlines the terms and works in the customer’s favor. This way retailers can build trust and ensure they’re protecting their customers’ financial well-being.
3. Choose the Right BNPL Solutions for Consumer Financing at Checkout
Some BNPL companies specialize in funding customers with lower FICO scores. Some may only approve those with excellent credit. And some do it all. Be mindful of who your customers are and what they’re looking for. Don’t be afraid to shop around for a BNPL company that fits those needs.
4. Streamline the Checkout Experience, A Confused Customer is Not a Happy Customer
The U.S. market is saturated with payment solutions, but not every option deserves a spot on a checkout page. With so many choices, it’s easy for customers to feel overwhelmed. Instead of offering a wide range of options that may confuse the process, focus on a select few—consumer financing included. This will give the most value with the least friction.
5. Track Buy Now Pay Later Metrics and Watch Them Grow
The beauty of consumer financing services is that its main function is to drive sales towards a business. BNPL solutions are known to improve conversion rates, increase average order value, and decrease cart abandonment. Tracking these key metrics isn’t just good business practice. It also gives retailers valuable insights to make informed decisions about their financing partners in the future.
The Bottom Line to Sales During Black Friday
Both retailers and customers are feeling the urgency when it comes to sales during the holiday season. BNPL solutions bridge the gap between retailers’ need for profit and customers’ financial concerns. When implemented effectively, consumer financing can be a powerful tool for boosting sales and enhancing the shopping experience.
Looking for more tips to maximize your sales this Black Friday?
Join us for a WeGetFinancing webinar, “Crush Your Sales Goals with Frictionless Financing,” on November 14th at 2 p.m. EST. Register now to dive deeper into this conversation on BNPL companies and POS financing!
Sources
- Waldenu.edu. The History & Importance of Black Friday
- Nrf.com Thanksgiving holiday weekend sees record number shoppers
- Retaildive.com Consumer-spending-record-black-friday
- Nrf.com Winter-holidays FAQs
- Cnn.com The Retail Apocalypse is Back
- Cbsnews.com Holyday Spending Forecast
- Pewresearch.org Economic Ratings and Concerns
- Morningconsult.com Buy Now Pay Later Holidays
- Pymnts.com Power Holiday Shopping Strategies
