 |
|
|
|||||
Branded is a weekly column devoted to the intersection of marketing, business, design, and culture. With economic uncertainty, inflation, and high interest rates lingering, consumers who cant decide whether to spend now or hold off until later are increasingly doing some of each. And thats good news for the buy now, pay later business. Buy now, pay later (BNPL) optionsincluding those facilitated by major BNPL services like Klarna, Afterpay, and Affirmhave been growing increasingly commonplace. According to an April survey from LendingTree, for example, 25% of BNPL users have spent the loans on groceries, up from 14% last year. And the services are becoming more widely known through linkups with familiar brands. Klarnawhich filed IPO paperwork in March but reportedly put those plans on hold when the markets swooned last monthrecently announced a partnership with DoorDash to enable customers to pay for deliveries in installments. And Affirm has a new deal with Costco that will give approved customers monthly payment options. Interest in BNPL is likely to grow as tariffs cause prices to rise (Walmart, for instance, just warned of price hikes). This builds on a steady rise of BNPL spending that goes back several years. This past holiday season, such spending hit an all-time high of $18.2 billion, up nearly 10% over the prior year, according to data from Adobe, which listed popular categories such as electronics, apparel, and video games. Research from EMarketer found that the per user spend on BNPL services topped $1,000 in 2024, and forecast the category will make up 1.4% of all retail sales this year. BNPL firms position their steady move into everyday spending categories as a matter of convenience and household budgeting flexibility. The loans are generally interest-free to consumers, with the services charging merchants a small percentage (ranging from an estimated 1.5% to 7%) of the total transaction. The merchant benefits from increased sales from consumers who presumably feel more open to spending if they can spread out the impact, and avoid adding to credit card debt. Of course theres a flip side to that. Critics argue that the services exploit consumer psychology, underscoring the instant gratification of buying something new at just a fraction of the total price nowa temptation that overwhelms the reality of continuing to pay it off for months. While BNPL offerings are fundamentally similar to old-school layaway plans and the like, theyre much easier to qualify for, and often pop up as seamless options on e-commerce sites. Moreover, the services make money from late fees if an overextended consumer falls behind. Roughly 41% of BNPL users copped to paying late in the past year, compared to 34% a year ago. Most were only a week or so late, and many of the laggards were in higher-income categories, but thats a notable trend at a time when total consumer debt stands at a record $18.2 trillion. Either way, the expanding popularity of BNPL options for quotidian purposes like takeout and groceries is seen by many as a bad economic indicator: Surely an increased interest in alternative payment schemes to fund pizza night sounds like a sign of a skittish consumer. And while the use of BNPL options has been growing for some time, it has done so at a somewhat slower pace in the relatively positive economy of the past few years; by comparison, adoption spiked during and in the aftermath of the pandemic downturn. And theres no question that services like Affirm and Klarna are becoming an increasingly routine part of the consumer-spending landscape. Recent fears of tariff-fueled inflation, shortages in some retail and grocery categories, and perhaps even a recession actually make the idea of buying nowbefore things get even worsesound particularly appealing, and rational. Ultimately, both assessments of BNPL can be true at the same time: Its a convenient and potentially sensible option, and a worrisome trend. Discussing his firms latest data, Matt Schulz, LendingTrees chief consumer finance analyst, told CNBC that the popularity of BNPL reflects economic headwinds and uncertainty that has lots of consumers struggling and looking for ways to extend their budgets. For an awful lot of people, thats going to mean leaning on buy now, pay later loans, he said, for better or for worse.
Category:
E-Commerce
In recent years, brands have changed their entire marketing approach in order to attract the new breed of so-called eco-conscious consumers. This is unsurprising considering the mountain of research showing the majority of people saying they care about sustainability when it comes to their purchasing decisions. But the notion of an eco-conscious mass consumer who is willing to sacrifice their own personal comfort for the planet is largely a myth. This is because, while people might “say” they support sustainable practices, their actions tell a different story. Our own research reveals that almost six in 10 (57%) American consumers say sustainability shouldnt come at the expense of their personal experience. Its easy to read a stat like that and feel annoyed at peoples selfishness. At the same time, weve probably all been in a situation where, despite our best intentions, we realize too late that once again weve forgotten our reusable shopping bags at the grocery store. Or tried farmer-owned, regeneratively produced coffee beans only to go back to our old brand because it just doesnt taste as good. Subconscious decision-making So why this disconnect? People tend to shop in a hot statetask-focused, time-pressured, hungry, distractedrather than in a logical, deliberative mindset. In these moments, the subconscious mind drives decision-making, and high-minded intentions often fall by the wayside. Tasks that impede instant gratification, like cleaning up or sorting waste for recycling, are perceived as chores and routinely avoided without consciously realizing it. Thats why a halo of sustainability isnt going to convince consumers to accept an inferior experience. Its not that people dont care about the environment, its that theyre human, and their subconscious priorities often override their conscious values. Brands that boast about their eco credentials often come off as authoritarian or preachy. Meanwhile, the rise in greenwashing has fueled deep-seated consumer scepticism over eco claims. A performance-based approach It can be much more effective for brands to talk up the superior performance or enhanced user experience of a product before getting to the sustainability aspect of it. And, for a topic as complex and divisive as the environment, sometimes the best approach is not to shout about sustainability at all. Ford took this approach with its Frunk campaign, which shows EV owners popping their hoods and putting the added space normally taken up by a combustion engine to imaginative new uses, from a pop-up kitchen to a tattoo shop. Meanwhile, the iconic anti-littering campaign Dont Mess with Texas plays on state pride rather than guilt. User-unfriendly Sustainability efforts also fall short because services aimed at getting people to recycle or be more sustainable are not user-friendly. In fact, many systems are unknowingly designed to elicit the opposite effect. For example, in many food outlets and retail spaces, the recycling bin is next to the rubbish bin. Both involve throwing items into a black hole, never to be seen again, and so the semiotics unintentionally cue waste, anonymous disposal, and ultimately, the death of the product. Our study found 72% of consumers believe they’re responsible for clearing and sorting their rubbish in cafes and quick-service restaurants, like McDonalds or Starbucks, but only 29% of them actually do so. Avoiding Rebellion Neuroscience shows that we subconsciously rebel when we feel forced to do something, so retailers should focus on making us actually want to take action. This is why the gamification of coin-spinning machines collecting charitable donations works so well. Kids love them for the fun factor; the philanthropy part is incidental. Retailers and quick service restaurants should swap “black hole” rubbish chutes for playful and rewarding alternatives that encourage people to recycle. To trigger behavior change, small nudges like these are much more effective than lofty messaging in marketing campaigns. There has also been a shift toward eco-led design, with branding and packaging featuring earthy, neutral colors and worthy messaging. But this pared-back, functional design takes a lot of the joy out of the experience and turns people off subconsciously. The vegan meat category is a great example, with a number of the biggest brands opting for dull, utilitarian packaging and earnest messaging that prioritizes ethics over appetitemaking the products feel more like a compromise than a craveable choice. Effortless and indulgent Almost three-quarters (72%) of those surveyed said they love innovative brands that invest in product development and deliver pride and excitement. The question brands should ask is not just how can we make this sustainable? but how would Silicon Valley design this? Sustainable solutions should feel effortless and even indulgentthink eco-hedonism, not eco-consciousness. Brands need to stop passing the burden of sustainability to the consumer. If you can create a product or experience that is pleasurable, joyful, and rewarding, but also happens to be good for the planet, you will be able to sell sustainability to even the most selfish of consumers.
Category:
E-Commerce
On Running has hit 2025 at full speed, reporting Q1 earnings on Tuesday that saw the company grow sales by 43% year-over-year. Its a reflection of the overall growth trajectory the Zurich-based athletic lifestyle brand has been on since it launched in 2010. With a healthy direct-to-consumer business, growing retail footprint (with 53 stores around the world), and cutting edge product innovation, On has built its brand around its product quality and sleek, simple design. But cofounder and executive cochairman Caspar Coppetti says that despite the healthy numbers, the brand still has plenty of room to grow, and it’s using its own unique combination of culture and athletics to do it. Our global brand awareness last year was only 20%, while Nike is at 95%, says Coppetti. We’re not trying to be the next Brand X or Brand Y. We’re writing our own script, and that script is: We want to be the most premium brand in sports, really elevating the whole brand experience. Zendaya [Photo: On] Premium culture Every athletic shoe company has its own approach to building out its audience. Nike has recently rejuvenated its swagger aimed at competitive athletes; Adidas has leaned on big names like Patrick Mahomes, Jude Bellingham, and Anthony Edwards; and Hoka is going all-in on runners. On, meanwhile, has built its brand around a unique combination of innovative design and elevated fashion sense. Elmo [Photo: On] That’s something we’ve always had in the brand, says Coppetti says. It began with its foundational cushioning technology, Cloudtech, an engineered solution to absorb impact that looked distinct from any other sneaker. That was combined with a Swiss design ethos that’s very reductionist and clean. Our products always look different and also quite fashionable,” says Coppetti. “And when performance and fashion collide, that’s when magic happens. This year, the brand took that magic in some compelling directions. While some athletic brands have steered toward competition and the athlete mentality, Ons brand work went in a different, pretty damn quirky direction. In February, On dropped a Super Bowl ad featuring Roger Federer and Sesame Streets Elmo debating the brands logo. Subsequent spots in the Soft Wins campaign had Elmo talking about running for fun as opposed to competitive fire. Then in April, the brand launched a trailer for a fake sci-fi movie starring Zendaya (who signed as a brand ambassador last year) to hype its new lifestyle bodysuit. With a new FKA Twigs partnership inked earlier this year, On has squarely positioned itself as the workout gear of choice for people who care about art and style. In its Q1 earnings report, On credited its Zendaya partnership as one of the driving forces of the brands impressive momentum. These kinds of things have the potential to go viral, says Coppetti. Consumers are also not seeing us as just another brand shoving advertising in their face, but seeing that its actually kind of cute and clever, and that resonates. Looking ahead to the rest of 2025, the brand is looking to open 25 more stores around the world, and continue to hype it’s Lightspray shoe technology, and its expanding apparel line. Coppetti says that the challenge is to make sure people see On as a head-to-toe brand, as opposed to just sneakers. Now were expanding our market share from the feet up.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||