BNPL: HIGH STREET RETAIL
TIME TO LET ZIP!
If high street retailers want to find their place in an omnichannel world, they need BNPL at the point-of-sale, says Zip UK MD Anthony Drury E-commerce has been the key battleground for buy now, pay later (BNPL) providers ever since what’s thought to be the first split payment of its type was processed by a Swedish online bookseller in 2005.
So, it’s little wonder that valuations of BNPL firms across the globe rocketed into the billions during a pandemic that saw high-double-digit growth in e-tail sales. And yet, despite the dizzying number of toilet rolls and bread-making kits that have careered in vans down a street near you over the past 18 months, the majority of purchases worldwide are still made in a store. According to the Centre for Retail
Research, combined online retail purchases across the UK, France, Germany, Spain, Italy and the Netherlands in 2021, for example, are forecast to be 15.3 per cent of total retail sales (down from 16.2 per cent) in 2020. While many predicted the nail had been firmly hammered into the high street’s coffin, it looks like reports of its death were much exaggerated. The UK’s BDO High Street Sales Tracker, says total in-store,
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like-for-like high street sales rose by 54 per cent in July 2021 (albeit from a base of -39.4 per cent in July last year).
Global research from Mood Media, published the same month, which surveyed more than 8,000 consumers from the US, the UK, France and China, also indicated that 80 per cent of shoppers now feel comfortable visiting physical retail stores again and 60 per cent expect to return to their old shopping habits by the end of the year. Only nine per cent, globally, said their shopping habits won’t return to normal. As with any resurrection, though, things don’t look quite the same, second time around. As the high street climbs out of the bunker, shoppers who have become used to enjoying endless choice of seamless payment experiences online, now expect the same when standing at a checkout. It’s why Australia-founded BNPL player Zip’s managing director in the UK, Anthony Drury, predicts: “As the high street opens up, that’s where the interest [in BNPL] is going to start to bubble up, particularly in this part of the world.” Zip is on a mission of global expansion.
Founded in Oz in 2013, with the aim of disrupting the credit card market, it now operates in 12 countries, including the UK and the US, and has about seven million customers. There are new markets in Europe, the Middle East and Asia in its cross hairs as it embarks on a programme of aggressive growth in the face of intense competition for a slice of a BNPL pie that’s estimated to swell to US$1trillion in transactions by 2025. This year, it converted its minority stake into full control of UAE-based market leader Spotii and is currently in the process of acquiring European BNPL provider Twisto Payments. It has also has just teamed up with the omnichannel payments platform Trust as part of a strategy to straddle in-person and remote shopping in all the markets it operates in. The partnership with Trust Payments enables the sizeable network of retailers that already use Trust’s platform to offer Zip’s pay-over-time options at point of sale – wherever that might be. This is facilitated by Zip’s newly introduced Tap & Zip virtual payments card, borrowing a format that consumers are now well used to from their standard credit providers – except, of course, Zip doesn’t charge any interest and using it doesn’t impact an individual’s credit score. Finding ways to target as many merchants as possible, as cost-effectively as possible, is key to building this ‘two-sided network’ , made up of consumers on the www.fintechf.com
