Shoppers payment
Insights North America Reports

Bread Report: How Retailers Can Capitalise On Changing Consumer Payment Behaviour

Shoppers are actively looking to experiment with more ways to control their finances and split their spending, according to a payments survey of consumers. While retailers are rethinking their strategies as they seek to provide customers with the best payment options.

These findings are from the How We Pay The Bread Consumer Payments Report from payments firm Bread, a division of Alliance Data.

The report quizzed more than 2,000 shoppers of varying ages, locations and income levels about their appetite for different payment methods. It identified that half of consumers make the majority of their purchases online, with this number expected to rise as e-commerce’s popularity grows.

With a changing retail landscape, shoppers are actively looking to experiment with more ways to control their finances and split their spending, rather than paying for major purchases entirely up front.

The majority of shoppers feel like their finances have improved in the last 12 months. While more than half (51.2 per cent) are interested in trying a buy now, pay later (BNPL) option than they were a year ago. (The report defines buy now, pay later options as either paying in monthly installments with interest, or splitting a purchase into four biweekly interest-free payments).

Shoppers are actively looking for more ways to pay, with around three-quarters of customers expressing interest in using a retailer-specific credit card or buy now, pay later option at their favourite store. 42.9 per cent of shoppers who have a retailer credit card said they are very likely to try a buy now, pay later option. While 62.1 per cent of shoppers who have a retailer credit card are more interested in using a buy now, pay later option than they were 12 months ago, compared to 40.8 per cent who don’t have a retailer credit card.

Retailer recommendations

According to Bread, now it is the time for e-commerce brands to capitalise on the BNPL boom. If the target demographic is urban Millennials or suburban Zoomers, retailers should consider a BNPL option.

57.8 per cent of BNPL shoppers have a household income above $50,000, as do 64.3 per cent of retail credit card holders. Nearly 70% of shoppers who rely on alternative payment methods do the majority of their shopping online.

When considering alternative payment options, a great shopper experience that adds value to customers is crucial, the report claims. For retailer-issued cards, this would be discounts and added benefits. When it comes to BNPL, that means zero per cent interest and flexible options.

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