Shoppers might be refreshing their closets with attire fit for fall but new data from Affirm finds growing numbers of consumers eschewing credit cards at checkout.
The good news: the majority (77 percent) of 2,000 surveyed consumers across America told Affirm, a company that’s “reinventing credit,” they have plans to pick up apparel, footwear and accessories for the pumpkin-spice season. But shoppers, it seems, are paying greater attention to their personal bottom lines. A quarter of respondents indicated they’ll be reining in their fall fashion sprees compared with previous years, either because their incomes have dropped or padding a savings account is a higher priority, Affirm said. Still, more than half of the survey takers said their spending will total $300 or less, and more than half (58 percent) indicated they’ll defer autumn apparel purchases until a sale or promotion offers attractive discounts.
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Stores emerged as the top fall-shopping destination, with 51 percent confirming plans to patronize brick-and-mortar for their seasonal style needs, while just 20 percent said e-commerce will get their dollars. Simply shopping in a physical store isn’t sufficient for the 79 percent who affirmed the importance of supporting local neighborhood shops, keeping resources in the local economy.
That values-based shopping mentality spills over for the consumers who prefer to purchase from brands that are transparent about their operations and impact, and are sustainable, too. Voting with their wallets doesn’t deter the 77 percent who said they’re willing to pony up for more sustainable brands. Along those same lines, ethical brands are a priority for 74 percent of consumers in Affirm’s survey, who also said they’d accept a higher price tag for such thoughtfully produced goods.
This all points to consumers shopping more consciously than ever—and in more ways than one. When it comes to paying for their purchases, Affirm discovered that many consumers are interested in breaking up their financial outlay into bite-size pieces, with 70 percent preferring not to put their consumption on a credit card. What’s more, this behavior holds up for consumers of varying income levels and FICO scores, quashing the notion that only low-income individuals use alternative methods of payment at checkout.
In fact, as millennials and Generation Z behind them blossom into full spending power, they’re bringing with them their attitudes and preferences—and upsetting the long-established financial apple cart, so to speak. Disruptive anti-finance retail payment companies like Afterpay have convinced hordes of young shoppers from its native Australia to the U.S.—scarred by the aftermath of the Great Recession—to pay for purchases with interest-free installments in a sort of new take on layway, usually with bank debits rather than credit-card charges.
Affirm’s findings confirm this trend. Being able to distribute the cost interest-free would persuade 38 percent of surveyed consumers to take the plunge on a full-price purchase, said Affirm, noting that 41 percent said they’ve used an installment loan in the past to make a purchase affordable. Nearly a quarter (18 percent) would opt for interest-free distributed payments at full price over a discount at checkout with the final cost due immediately.
Consumer’s cost consciousness re-emerged when Affirm sought to understand what’s driving the interest in payment installments. Divvied up payments helps with sticking to a budget, said 29 percent, and 18 percent just want to free up their cash flow. For 17 percent, the option to pay over time makes a big-ticket purchase possible—without having to absorb the hidden and confusing fees that come with a credit card.
Affirm pointed to the experience of paying becoming as important as what people are shopping for in the first place. “Shoppers shouldn’t just love what they buy, they should love how they buy,” Affirm founder and CEO Max Levchin said.
