Afterpay CMO Reveals Key Findings from its Millennial and Gen Z Customers
Afterpay is the leading global Buy Now, Pay Later provider, but it is also much more than a payment option. Afterpay’s merchants see the platform both as a marketing partner and as a resource for reaching consumers - given its access to more than nine million active customers in North America.
Twice a year, Afterpay drops its Bi-Annual Fashion and Beauty Trend Report, sharing the latest trends and behaviours from its large demographic of Millennial and Gen Z consumers. We spoke with Afterpay’s CMO, Geoff Seeley, to break down what Afterpay is, how it works and what marketers should know about its growing and highly engaged user base.
Geoff Seeley, global chief marketing officer, Afterpay.
Photo Credit: AfterPay
Q&A
Tell us a bit about Afterpay. What is it and how does it work?
Afterpay lets consumers receive products immediately and pay over time using their own money — always interest-free — at thousands of retailers across the globe. Purchases are paid in four instalments due every two weeks.
Merchants pay a small transaction fee to Afterpay for the service and ship the products immediately to their shoppers. Afterpay pays the merchant in full the next day, minus the fee. Afterpay assumes the full risk of non-payment, fraud and chargebacks.
With Afterpay, merchants gain access to a large and growing segment of shoppers (nearly 15 million globally) who prefer not to incur credit card debt, interest or fees. For this reason, Afterpay delivers increased conversion rates — approximately 20-30 per cent higher compared to other payment methods — as well as higher average order values, fewer returns and increased customer engagement. During March 2021, Afterpay referred approximately 35 million customers to its merchant partners via its Shop Directory.
Afterpay is one of those rare “win, wins” for both consumers and merchants. There is no catch for consumers using Afterpay — that’s the beauty of our business. Our model was built to encourage financial wellness and responsible spending.
2. Afterpay's Bi-Annual Fashion and Beauty Trend Report for Spring/Summer 2021 just dropped. What can readers expect to find here?
Afterpay’s Bi-Annual Fashion and Beauty Trend Report takes a closer look at what our global customers are loving this season. The report reveals insights into what brands, products and styles are trending based on customer purchasing patterns. It uncovers things like top prints, colours, silhouettes and much more.
Afterpay is uniquely positioned to present a definitive guide to the fashion and beauty landscape through the lens of how the world’s highest-value and most powerful demographic is spending its money - the Gen Z and Millennial customer. These consumers are frequent fashion, beauty and lifestyle shoppers with spending power who are also repeat, loyal Afterpay customers.
3. What trends should be on marketers' radar this season?
North American customers are still in the mood for comfortable clothing, but are switching up their purchasing habits as they start to come out of lockdown. We’re seeing the return of more transitional and easy-to-style looks, with ready-to-wear items in monochrome tones at the top of the list. This is especially apparent in the U.S. where lockdown restrictions are easing and people are returning to work and travel. We believe purchasing patterns in Canada will soon start to follow suit.
What’s really exciting for local Canadian merchants is that Afterpay offers cross-border trade - enabling local businesses to open their storefronts to millions of shoppers in the U.S., UK, AUS and NZ. Marketers can explore the trends across all of these regions inside the report.
4. Did the report point out any surprising consumer behaviour changes?
The pandemic has not only shifted the way consumers shop, but also when they're shopping. Since our last report, Afterpay consumers have changed their preference from shopping later in the day to the pre-work hours. This is valuable insight for our merchant partners to help them dictate timing for product drops, new content, marketing new lines and more.
5. How does Afterpay leverage data from the report to inform marketing strategies and partnerships with merchants?
Afterpay has unique insight into how Millenials and Gen Z are shopping — down to every brand, product and SKU. For example, from the trend report we know better than anyone that chambray will be a top fabric for the season because it’s based on real customer purchasing data.
We optimize this data to help our merchants better connect with their customers from a marketing and merchandising perspective.
6. Understanding your user base is primarily millennial and Gen Z, what should marketers understand about connecting with this audience?
With Millennials and Gen Z so fully immersed in social media, marketing campaigns should be social and mobile first in order to meet the customer where she is. For example, we executed highly successful TikTok campaigns in partnership with our brands, introduced live shopping, joined forces with Snapchat on AR technology - among other campaigns.
This generation also has a different mindset about how they pay for the things they want and need in their lives. In a recent survey of Afterpay shoppers, nearly 90 percent of respondents said financial wellness is important to them. With Afterpay, customers are able to practice responsible spending by using their own money to budget and pay over time - avoiding excessive credit card fees, interest and revolving debt. Marketers should consider the significant shift to debit spending led by Millennials and Gen Z.