The Lingering Effects of Buy Now Pay Later

As we forge ahead into 2023, I believe we are on the brink of a credit crisis. There’s a reason that, despite inflation, we saw an incredible quarter for eCommerce in Q4. Much of that growth was enabled by buy-now-pay-later promotions from third-party lenders. Unfortunately, now our chickens are coming home to roost.

I’m not here to doom-and-gloom you to death, but I do think a healthy dose of pragmatism will serve marketing leaders well as we strategize for the year ahead. Let’s take a look at the automotive market, for example:

car guy tweet

BNPL players like Affirm and Shop Pay have made it easier than ever for merchants to level up their CRO (Conversion Rate Optimization, for my Grandpa that reads this) game with payment installation options. Sometimes the offer, such as four easy payments on a $20 item, is downright laughable. 

But it’s working.

Here’s why that’s a problem:

Christmas is over. The need to buy gifts is gone. The reality, for many families, is setting in that eggs, gas, and other staples are not getting any cheaper. And that Visa statement isn’t getting any smaller. 

Here’s where we’re headed: The availability of relatively cheap/easily obtainable consumer credit in Q4 sustained eCommerce as a whole in Q4, but now the credit card statement is due, and the average worker’s check is still worth significantly less than a year ago. 

This is going to impact far more than car dealers. As marketers, we need to adjust. Our marketing messaging has to be far more meaningful. Marketing leaders need to lead with real, tangible benefits in their copy and creative. 

Start with value, then make that value irresistible. 

Don’t sell a pair of skis- sell the experience of the best views in the world shared with friends and loved ones. Don’t sell a new pair of shoes. Sell the confidence and comfort the customer will feel when they put them on before that big event. Don’t sell marketing services, sell how your marketing services produce a tangible ROI and make your clients’ lives easier- like Fidelitas does 😉

If you’re not sure how to hone your messaging for maximum impact, you’re not alone. Fortunately for you, I happen to pay a lot of smart people to help with that exact problem. I’d love for you to meet them. Just reply to this email and we’ll be in touch.

Luis Robinson

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