Buy Now, Pay Later (BNPL) Explodes in Popularity During Holiday Season

BNPL (Buy Now, Pay Later) usage also hit an all-time high, contributing $16.6 billion in online spend.

Buy Now, Pay Later
Buy Now, Pay Later

The 2023 holiday season saw a record-breaking $222.1 billion spent online, up 4.9% year-over-year, according to new data from Adobe Analytics. This marks the seventh consecutive year of year-over-year growth for online holiday spending.

Shoppers took advantage of deep discounts across major categories, including electronics, toys, and apparel. BNPL (Buy Now, Pay Later) usage also hit an all-time high, contributing $16.6 billion in online spend.

‘Buy Now, Pay Later’ (BNPL) usage was up 14% YoY, representing $2.1 billion more than the last holiday season. November was the biggest month on record for the payment method ($9.2 billion, up 17.5% YoY), and Cyber Monday was the biggest day on record ($940 million, up 42.5% YoY).

BNPL saw strong traction leading up to the holiday season as well: Year-to-date (Jan. 1 to Dec. 31), the payment method drove $75 billion in online spend, up 14.3% YoY and $9.4 billion more than 2022.

Mobile shopping surpassed desktop for the first time. Mobile accounted for 51.1% of online sales this holiday season, up from 47% in 2022. Christmas Day saw the highest percentage of mobile sales at 63%.

Curbside pickup remained popular. Curbside pickup was used in 18.4% of online orders this holiday season, up from 21% in 2022.

Paid search was the biggest driver of sales for retailers. Paid search accounted for 29.4% of online sales this holiday season, followed by direct web visits (19.3%), affiliates/partners (16.6%), organic search (15.9%), and email (15.3%).

E-commerce prices have been falling for over a year. The Adobe Digital Price Index shows that e-commerce prices have fallen 5.3% year-over-year in December 2023.

Implications for marketers

Emphasize mobile-friendly experiences. With mobile shopping surpassing desktop, it is more important than ever for marketers to ensure that their websites and apps are optimized for mobile devices.

Offer flexible payment options. BNPL is becoming increasingly popular, so it is important for retailers to offer this option to their customers.

Focus on product categories that are driving growth. Electronics, apparel, furniture, groceries, and toys are the top five categories driving e-commerce growth. Marketers should focus on these categories to reach a wider audience.

Use paid search and other marketing channels effectively. Paid search is still the most effective way to drive online sales, but it is important to use other channels like organic search, email, and social media to reach a wider audience.

Across major marketing channels, paid search remained the biggest driver of sales for retailers this holiday season (29.4% of online sales attributable to that channel). Direct web visits (19.3%), affiliates/partners (16.6%), organic search (15.9%) and email (15.3%) were also major contributors.

Revenue directly attributable to social media remained at less than 5% of total sales this season, but that share has grown 5% YoY. 

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