This 2019 journalism’ish report says Abercrombie & Fitch was targeting Gen Z consumers … who averaged 14 years old in 2019 (range 8 to 22 years old) – by offering them Buy Now, Pay Later payment options. Literally extending credit to children?
Abercrombie Is Latest Retailer to Adopt Buy-Now, Pay-Later Program – Business Insider
“Corey Pierson, CEO of customer intelligence platform Custora, told Business Insider that buy-now, pay-later is a smart way for apparel brands to reach Gen Z and millennial shoppers, taking a cue from methods long used successfully in other industry categories like electronics and homegoods.”
One item the story got correct – BNPL is displacing credit cards. Unfortunately for consumers, the use of BNPL is a marketing trick that leads to consumers spending more than they otherwise would have spent – and more than 98% of BNPL purchases are for discretionary goods – not for necessities. Consumers are more likely to pursue instant gratification with 4 smaller payments – and hence, more likely to pay full price than wait for a sale price. Abercrombie & Fitch is a “lifestyle” clothing retailer – hence, almost entirely discretionary purchases.
The growth of BNPL usage is due to it replacing credit cards, in many cases, as a new payment option. BNPL went from $2B in goods to $80.8 B in 2024, and the number of vendors offering BNPL increased by a factor of 5x.
BNPL is a new way to take on debt to pursue instant gratification. Surveys indicate up to 40% will miss at least one payment over a 12-month period.
