According to Adobe Analytics, the “buy now, pay later” trend played a major role in the 2023 holiday shopping season, contributing $16.6 billion to online spending, up 14% from the previous holiday season. Vivek Pandya, principal analyst at Adobe Digital Insights, joined TheStreet to discuss what this growing trend says about American consumers.
Full video transcript below:
JD DURKIN: What does this tell you right now about the state of the American consumer? Is this just a new way to pay for things? And are people trying it? Or does this tell a slightly deeper story given the situation we're in with the American economy?
VIVEK PANDYA: It definitely tells us that consumers are being very strategic, cost-conscious and very specific about how they shop and how they shop. Yes, it is a new mode of transaction and it has a certain level of appeal. I mean, the idea of installment payments has been around for decades, but the way it's integrated into these online channels is very new. And that's helping drive some of that growth. And that's not something to worry too much about.
But I do think that in an environment where retailers are looking to drive further growth, they need to be aware of the fact that there are still consumers who are not spending like they did in 2020 and that they need to be very aware of areas of the economy where they still There is strong inflation, like food, like housing, and that has knock-on effects on your regular consumer purchases. So the fact that we still see people leaning on buy now, pay later and that growth, I think speaks to the fact that consumers have, want to spend and need to spend on certain goods, but they have to be very strategic and not spend too much because they have to rely on these types of options.
