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- #176 HTE - 'Buy Now Pay Later': Apple's Newest Wallet Trick! 👻
#176 HTE - 'Buy Now Pay Later': Apple's Newest Wallet Trick! 👻
Greetings, oh you savvy marketers out there! 🤘🏻
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Alrighty then, let's cut to the chase!
In this newsletter, we're going to take a deep dive into:
🍎 Apple Just Dropped A Bombshell: Introduces "Buy Now, Pay Later" Feature For Apple Pay
💸 BNPL Is Not Just A Trend; It's A Growing Industry: Check Out The Tips
📈 Surprisingly Easy Way Brands Are Jumpstarting Their Influencer Marketing Program
📍 Pinterest - A Friendly Social Ad Platform
Apple Just Dropped A Bombshell: Introduces "Buy Now, Pay Later" Feature For Apple Pay
It's never been easier to make a purchase you might regret. Apple's latest feature, Apple Pay Later, allows users to make purchases of up to $1,000 and pay in four interest-free installments over six weeks.
The BNPL craze may have hit its peak during the pandemic, but Apple sees an opportunity where others see ruin. In this article, we'll explore the rise, fall, and rebirth of BNPL, and how Apple is contributing to the resurgence of this payment option.
The Rise of BNPL Rewind to peak Covid, and you'll find that digital layaway companies were hotter than matching sweatsuits.
Consumers were looking for more flexible payment options, and BNPL companies stepped in to fill the gap. Swedish BNPL company Klarna was Europe's most valuable fintech startup in 2021, with a valuation of $45.6 billion. At the same time, Block (formerly Square) acquired the Australian BNPL company Afterpay for a staggering $30 billion.
BNPL companies' popularity stemmed from the fact that they offered interest-free payment plans that were more flexible than traditional credit card payments. Instead of paying the full amount upfront, customers could spread the cost of their purchases over several weeks or months, making it easier to manage their budgets.
The Fall of BNPL But the BNPL boom was short-lived. By mid-2022, rising interest rates strained BNPL companies' business models, and regulators started cracking down on potentially predatory lending practices. Plus, the BNPL field got more crowded than an Old Navy during the 2010 $1 flip-flop sale as established companies like Walmart and PayPal tried to cash in on the gold rush.
Klarna's valuation plummeted 85% to just $6.7 billion in a July 2022 funding round. The short seller Hindenburg accused Block of being ultra-sketchy in a scathing report last week, stating that acquiring Afterpay was actually a very bad idea because the company was "designed in a way that avoided responsible lending rules."
The Rebirth of BNPL Despite the challenges that BNPL companies are facing, Apple sees an opportunity to enter the market. They're willing to take the risk of losing money on their new feature for a while, because they've got that iPhone cash flow. And Apple has been playing the long game when it comes to replacing your old leather wallet.
In October 2014, only 3% of US retailers accepted Apple Pay. But now, over 85% of them do. Apple has been steadily building its payment system, and Apple Pay Later is the latest addition to its arsenal. While other BNPL companies may be struggling, Apple has the advantage of being a tech giant with a loyal customer base.
The Future of BNPL Apple's move into the BNPL market raises some interesting questions about the future of this payment option. Will other tech giants follow suit and offer their own BNPL features?
Will traditional credit cards become obsolete as more consumers turn to BNPL options? What will happen to existing BNPL companies as they face increased competition?
One thing is certain: BNPL isn't going away anytime soon. Consumers are looking for more flexible payment options, and BNPL companies offer a way to make larger purchases without breaking the bank. As long as companies like Apple continue to invest in BNPL, it will remain a viable payment option for years to come.
Conclusion
Apple's entry into the BNPL market is just the latest chapter in the ongoing story of this payment option.
Surprisingly Easy Way Brands Are Jumpstarting Their Influencer Marketing Program
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BNPL Is Not Just A Trend; It's A Growing Industry: Check Out The Tips!
Are you tired of always having to say no to that fancy designer jacket you've been eyeing for months because you can't afford it?
Or maybe you're a direct-to-consumer (DTC) brand struggling to boost sales and increase your average order value (AOV)? Well, worry no more because Buy Now, Pay Later (BNPL) is here to save the day!
What is BNPL and How Does it Work?
BNPL is a payment method that allows you to make purchases instantly while paying for them at a later date. It's like a short-term financing plan that puts the power of flexibility in your hands. Imagine shopping for a Charcuterie Board Set worth $100 and being presented with the option to pay for it in four interest-free payments of $25 each. Exciting, right? But wait, there's more!
The catch is that BNPL providers like Klarna, Clearpay, PayPal, Afterpay, and Paybright, among others, operate as separate entities from the actual retailers. So, before you can enjoy the benefits of BNPL, you'll need to go through a soft credit check.
Why Does BNPL Work?
BNPL works for both customers and DTC brands. Here's why:
For Customers:
Flexibility: BNPL allows you to spread the cost of your purchase into smaller amounts over a short period of time, usually weeks or months. This means you can finally get that designer jacket you've been eyeing without breaking the bank.
Level Playing Field: With BNPL, you don't need a credit card to avail of "credit" services for smaller purchases anymore. You can enjoy the benefits of credit without having to worry about an extensive credit check.
For DTC Brands:
Increased Conversions: Offering BNPL services can increase shopping cart conversions by almost 20-30%. Customers are more likely to make a purchase if they have the option to pay for it later.
Boost in Sales and AOV: BNPL influences customer behavior to boost overall sales and increases the average ticket size by between 30% and 50%. This means more sales and bigger profits for your DTC brand.
Here are some tips for ecommerce owners on "buy now pay later" programs:
Choose a reputable payment provider: Look for payment providers with a good reputation in the industry and a track record of successful payment processing.
Offer clear payment terms: Make sure your payment terms are clearly stated on your website and easy to understand. This includes the interest rate, payment schedule, and any fees associated with the program.
Make it easy to use: Your "buy now pay later" program should be easy to use and understand. The checkout process should be seamless, and customers should be able to easily choose the payment option that works best for them.
Promote the program: Make sure your customers are aware of the "buy now pay later" program by promoting it prominently on your website and through your marketing channels.
Be transparent: Be transparent with your customers about the terms and conditions of the program. This includes any penalties for late payments, the impact on credit scores, and any other potential fees or charges.
Monitor payment processing: Keep an eye on payment processing to ensure that all payments are being processed correctly and on time.
Consider offering incentives: Consider offering incentives for customers who use the "buy now pay later" program, such as discounts or free shipping.
Train your staff: Make sure your staff is trained to handle questions and concerns about the "buy now pay later" program, and that they are aware of the program's terms and conditions.
Monitor your cash flow: Keep an eye on your cash flow to ensure that you have enough funds to cover any payment processing fees or potential defaults.
Review and adjust as necessary: Continuously review your "buy now pay later" program to ensure that it is meeting your business goals and adjust as necessary.
The Bottom Line
BNPL is not just a trend; it's a growing industry that's here to stay. If you're a customer, BNPL offers flexibility and convenience, allowing you to make purchases without breaking the bank.
If you're a DTC brand, BNPL can increase your conversions, boost your sales, and increase your AOV. So, what are you waiting for? Get ready to shop now and pay later with BNPL!
Pinterest - A Friendly Social Ad Platform
Get ready to have some fun shopping on Pinterest! The social media platform is on a mission to make social shopping a blast for both shoppers and brands. At a recent Shoptalk event in Las Vegas, Pinterest CEO Bill Ready shared some exciting updates about the platform's new shopping capabilities and AI recommendations designed to make users feel great.
Unlike other social media apps that have received criticism for their negative psychological impact, Pinterest is all about positivity. Ready explained that the platform's focus on positivity naturally leads to increased product sales, as long as brands advertise and sell on Pinterest. And the results speak for themselves! Retailers that have brought their catalogs to Pinterest have seen a whopping 90% increase in people saving their products and a 30% boost in attributed conversions.
With 450 million global monthly users, Pinterest is a prime location for brands to capture shoppers' attention. Plus, with unbranded searches accounting for 97% of top searches on the platform, there's plenty of opportunity for brands to be discovered as users seek inspiration.
But shopping on Pinterest isn't just about buying; it's about the joy of discovery and inspiration. The platform's Shuffles app, which launched last year, allows users to create collages and view details like brand and price. It's been a hit among Gen Z users who love using it to make aesthetic collages.
As Ready puts it, the future of e-commerce is all about solving for the joyful part of shopping, and Pinterest is leading the charge. So next time you're looking for inspiration, head to Pinterest and get ready to have some fun discovering new products and brands!
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CHOOSE SUCCESS below and have a great weekend! Get that DTC business runnin’.
