Keyzar Jewelry offered PayPal’s Pay in 4 and Shopify’s Shop Pay Installments as buy-now-pay-later (BNPL) options as soon as it launched its ecommerce site in January 2021. It was a natural fit for the retailer with an average order value of $2,500, says Chief Marketing Officer George Pich. What surprised him was that customers were not happy with this selection. Through the retailer’s Contact Us web page, shoppers voiced what they wanted: Klarna.
In May 2021, Keyzar Jewelry launched Klarna as a buy-now-pay-later option. Within 30 days, Pich says customers that paid using Klarna were spending more than those who paid in other ways. Conversion rates increased about 6% in the first month and another 5% the next month.
“Our conversion went up by a total of 11% in those first two months,” Pich says. Overall web sales increased about 14%, he says.
Sales increases like that explain why so many online retailers are quickly adding pay-later options. 45.7% of Digital Commerce 360’s Top 1000 online retailers — North America’s leading retailers by web sales — offered a BNPL option in 2021, up from 28.2% in 2020. And 7.4% offered two or more BNPL options, an increase from only 1% in 2020.
Small- to mid-sized retailers are also offering BNPL, with 32.9% of Digital Commerce 360’s Next 1000 offering at least one BNPL option. The Next 1000 lists retailers ranked Nos. 1,001 to 2,000 by online sales.
Want to read more? Unlock Free Strategy Membership