Dive Brief:
- Amid the buy now, pay later boom in the U.S., Belk Has introduced Afterpay's buy now, pay later payment service online and in stores, the financial tech company announced on Tuesday.
- So far, the retailer has seen a 50% increase in average order values for customers using the service. The majority of Belk's Afterpay users are millennials and Gen Z shoppers.
- The service is launching amid the holiday season and allows customers to "pay for their gifts responsibly in four interest-free installments," according to the release.
Dive Insight:
A partnership with Afterpay is one of the multiple operational moves Belk has made this year in the midst of a turnaround.
In February, the company filed for Chapter 11 bankruptcy with a lender-supported reorganization plan that eliminated $450 million in debt and kept its store footprint intact. Only a day later the department store emerged from bankruptcy with the approval of its restructuring agreement and $225 million in new capital.
In July, the retailer announced that President and Chief Merchandising Officer Nir Patel would become its new CEO, replacing Lisa Harper who would take on the executive board chair position. The company also promoted COO Don Hendricks to president, taking over the role of Patel.
Belk is launching a buy now, pay later service during a time of increased retail adoption of the service. The payment alternative has been particularly popular during the holiday shopping season, with Adobe reporting BNPL spending increased 422% in November, with order volume up 438% compared to the same period in 2019.
"We always strive to give customers the best and most convenient options for their shopping experience, and they've really responded to the Buy Now, Pay Later model, especially younger customers," Patel said in a statement.
Meanwhile, Afterpay has undergone changes of its own this year. Signaling its entry into in-store payments, in March the company kicked off its fifth bi-annual Afterpay Day event where brands like Aveda, Vera Bradley and Mac Cosmetics offered in-store and online sales. Block (formerly known as Square) acquired Afterpay in August, indicating that the BNPL market is heating up. During the holiday season so far, the BNPL platform has seen an uptick in installment payment orders, with clogs, weekender bags, trucker hats, pajamas and shoes leading the top items purchased.
