Retailers with “buy now, pay later” options might have an advantage in the time of the coronavirus.
According to financial services firm Klarna, average daily transaction volumes for items bought through its app surged week over week in the period ended April 18.
While the demand for furniture and jewelry increased the most among categories at a whopping 60% in that timeframe, the analysis showed that average daily transactions at sporting goods stores were also up 17%. (Nike and Under Armour are among Klarna’s company partners.)
“With millions of us still under some kind of quarantine in the U.S., many consumers appear to be upgrading their furniture and looking to make their living spaces more comfortable,” noted Klarna’s head of U.S. David Sykes. “Our recent data also show that people seem to be looking for creative diversions to keep them occupied at home.”
Klarna’s data tracker — which helps identify how the coronavirus outbreak is affecting e-commerce and consumer shopping behavior on a weekly basis — also revealed that stores selling musical instruments as well as electronics retailers each saw a 37% uptick in daily transaction volumes for the week ended April 18. What’s more, craft shops showed gains of 16% week over week.
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In the U.S., the Stockholm-based company noted its second-highest weekly transaction volume on record during April 12 to 18 — second only to Black Friday last year. Klarna’s “buy now, pay later” service is currently used by more than 200,000 brands and retailers, including fast-fashion giants H&M and Asos; shoemakers Koio and Overlook Boots; and designers Givenchy and MCM. As the coronavirus pandemic creates significant economic challenges including record job losses — for the five weeks since the virus took hold in the U.S. jobless claims have skyrocketed by 26 million — it makes sense that more Americans are seeking cost-saving options.
Meanwhile, federal authorities continue to urge people to stay indoors during the COVID-19 pandemic and shoppers have increasingly swapped their physical shopping baskets for digital ones. Retailers across the board are reporting a loss of foot traffic and subsequent dent in their bottom lines due to widespread store closures, but some are noting improvements in their online channels as they offer discounts — such as free shipping or site-wide sales — to help persuade consumers to buy discretionary goods.