“Buy Now, Pay Later at Checkout” now the new must-have logo amongst luxury shoppers

Luxury shoppers have long regarded brands that exercise acute attention to detail. Lineless, clutter-free, get-it-now experiences are pillars of the luxury shopping experience—and Buy Now, Pay Later is one of the high-end amenities joining the fray.

Early analysts pegged Buy Now, Pay Later tools as a wallet stretcher for cash-strapped customers. But according to consumer spending firm Cardify.ai, 75% of customers checking out via BNPL have the funds to cover the tab in full. Instead of leaning on BNPL to float out-of-reach purchases, luxury customers are wielding it as an intelligent money management strategy.

Wealthy shoppers are savvy spenders, avoiding overspending pitfalls and focusing their efforts on a relatively debt-free lifestyle. For the 37% of BNPL users with an income over $200K, treating themselves to the finer things in life through a no-fee, sometimes interest-free installment plan is all about flexibility*. Gucci expressed this sentiment during their BNPL activation, “[Gucci] continues to define style on its own terms and offers tailored monthly payments that empower you to do the same.”

Gucci’s foray into BNPL definitely piqued the interest of affluent fashionistas. The brand saw online sales increase by 24% in one quarter just by adding the BNPL button at checkout.
For those boutique shoppers that have yet to take the BNPL plunge, 56% state that they are “highly interested” in using installment payments to foot online purchases. Here are some of the top trends crystallizing the collaboration between luxury brands and Buy Now, Pay Later providers.

Payment preferences are expanding beyond credit cards

One study found that high-net-worth consumers are more critical shoppers than any other cohort. They conduct lengthy pre-purchase research and lean on logical decisions vs. impulsive buys. For this group, BNPL represents a smarter, more thoughtful way to pay. They can hold onto their cash for longer, invest instead of spend, and dodge avoidable credit card interest.

Younger generations are even less reliant on credit cards. Their weariness toward high fees and interest rates drives an increase in debit card usage five points higher than credit cards. BNPL options provide shoppers that prefer using cash with a different alternative.

Loyalty is shifting from brands to payment methods

Some experts predict that instead of pursuing brands, shoppers will transition their loyalty over to preferred payment methods. They’ll gravitate towards retailers that offer BNPL and retreat from those that buck the trend. In fact, 42% of shoppers already say that they will abandon a cart if they don’t see their preferred method available at checkout.

With 60% of shoppers opting to pay via BNPL, it’s quickly climbing the charts as a preferred payment method across a range of demographics. Online retailers that add installment plans to their marketing mix will welcome a new fan base of loyal clientele.

Luxury customers love the aura of buying directly from a brand

For luxury items, the experience of purchasing within the brand’s own castle walls is enchanting. In one study conducted by a high-end watchmaker, researchers found that buying a prestigious timepiece on a multi-brand supersite was “less pleasurable and enjoyable” than purchasing it from the brand’s own website.

The notion sends a message to the luxury market. Mono-brand locations need to keep up with technology offered by larger retailers. Over two-thirds of Millennials appreciate specialty merchants that integrate BNPL into their brick-and-mortar strategy, fully expecting to split big-ticket items into smaller monthly payments in-store, too.

Luxury customers value convenience

Luxury customers are attracted to companies that offer the most convenient, frictionless experience. Hassle-free returns, airy and minimalist spaces, and elegant, visually clean sites distinguish luxury from other retail verticals. Luxury shoppers expect brands to engage top-tier tech to support the exclusive mystique. They’re such technology loyalists, that 78% prefer to purchase premium products from retailers committed to digital innovation. They want to see stunning, seamless mobile apps, and perhaps most importantly, 57% want to be able to spread out payments via flexible payment options.

For luxury shoppers, BNPL is less about affordability. It’s more about flexibility, empowering customers with a new era of convenience—a timeless quality of any high-end luxury brand.

*Kantar Profiles/Mintel, Buy Now, Pay Later Financing Report. (December 2021)