“We partner with our retailers as closely as possible,” said Afterpay co-founder Nick Molnar in conversation with BoF last year. “From our perspective, we are asking: ‘How do we really partner with our brands? How do they look at us as a marketing channel, not just a payment product?’”
Indeed, global payment solutions firm Afterpay has been quick to double down on its commitment to forge partnerships beyond payment solutions. Offering its solutions to more than 86,000 merchant partners, the retail technology company can point to specific, dynamic partnerships with a point of difference. Last year, a unique TikTok campaign in partnership with Crocs garnered over 6 billion views.
Afterpay’s marketing team are responsible for facilitating these more creative collaborations, alongside existing, compelling customer acquisition strategies for both Afterpay and merchant partners. Now, BoF gains insight into their evolving strategies via three key team members, discussing expansive consumer acquisition tactics, data as a marketing tool, the forging of partnerships, and how marketing strategies connect to the crucial point of sale.
Geoff Seeley, chief marketing officer at Afterpay
How have Afterpay’s marketing strategies pivoted since the pandemic began?
We have had to adjust like everyone else has, but the fundamentals of what we offer merchants hasn’t really changed in that we have a brand that we continue to invest in. Customers know who we are, what we do and what the value is. However, we are continually investing in partnership with our merchants in marketing programmes. The work has become more accelerated and concentrated as more merchants collaborate with us and see the value in our partnership.
There are a few recent examples of marketing innovation with our merchant partners, such as our work with social platforms which centre on combining the magic of Afterpay with the power of TikTok and our merchants. We recently partnered with TikTok and Crocs on the “Croctober” event. The campaign received nearly 7 billion views and over 1.3 million videos were created by consumers. Another recent programme we launched was our first-ever live shopping experience, which we did in celebration of Earth Day. Influencers showcased their favourite sustainable products for customers to purchase through a live shopping feed.
Live shopping is a new concept we’re testing, as we know our Gen-Z and Millennial customers tend to shop based on advice and input they have seen and heard from friends, family and influencers that they feel they can relate to. There’s an equation adding up here, which is Afterpay, plus the merchant partner, plus the social element. Then, you multiply that by a creative approach and you see great returns for the consumer.
How do merchant partners operationally benefit from Afterpay’s marketing infrastructure?
On the technology side, we have the ability to mine our real-time purchase data to understand market trends and marry that data with customer demographics and other insights. Not only do we know what people are buying across all of our merchants, but we know who’s buying it, which allows our merchants to predict where the trends are going. These insights help the merchants with their supply chain and equally informs our internal strategy about what we should be presenting through our channels in terms of customer interest.
We also have our shop directory, which drives more than 35 million quality referrals every month. Again, we leverage the insights from the data mining that we do to inform how our shop directory is set up to maximise the consumer journey. As mentioned, we also have partnerships with social platforms including the likes of Snapchat, TikTok and companies like MagicLinks. These relationships enable us to offer innovative programmes and campaigns to our merchants that can attract the Gen-Z and Millennial audience in a creative and impactful way.
We have powerful performance marketing and lifecycle marketing capabilities in-house that merchants increasingly want to leverage. For many of our merchants, we now act as an agent for their own media dollars to drive incremental revenue. We find that the merchant partnered with Afterpay generates more trust and more cut-through with customers than just going down the merchant-owned brand path. We see outsized results, sometimes up to six times the efficacy of merchant-led programmes. We also offer our own internal brand studio to create co-marketing campaigns. The insights that we have into those audiences enable us to unlock powerful campaigns.
Which new technologies are innovating Afterpay’s marketing approach to consumers?
As technology like AI and AR become more accessible, we’re bringing that into play through our programming. We also couple this with our machine learning capabilities that help provide that real-time human insight into customer behaviour and buying patterns. This helps bring the right products to the consumer’s fingertips. Everyone is trying to look into the future and we are as close to what the future looks like as I think possible, because it is real-time purchase data which we can marry with customer demographics and innovative technologies.
Now, we’re also working on location-based marketing — investing in serious technology that will enable us to drive footfall, and improve and personalise the in-store experience. Localised marketing technology is also where we are investing because, at a customer level, we all want to get back in-store. Our in-store product is offering safe and seamless shopping experiences — over 30 percent of customers had never used contactless payments prior to trying it with Afterpay. There’s a lot more you are going to see from us around reigniting the in-store retail environment.
Natalie McGrath, vice president of marketing at Afterpay
How are creative partnerships forged between Afterpay and its merchant partners?
We have built a global agency and that’s changed how we develop programmes with our partners. We are now developing vertical strategies for different categories.
We want to work hand in glove with our merchants to drive their business. We’re asking, “How do we build successful marketing programmes with the internal marketing teams within each retailer? How do we bring in our vertical experts to really drive innovation?” I think that’s critical to what we bring to the table. We want to bring in new, interesting marketing opportunities that maybe the in-house team have not thought about and supplements the work that they are doing internally.
Can you point to creative partnerships that are emblematic of working with Afterpay?
We have a collaborative relationship with TikTok. We recently worked with them on a Valentine’s Day campaign in the US through a multi-merchant initiative that had over 150 million impressions and double the average engagement rate. This campaign was a great success in engaging the Gen-Z and Millennial cohorts through a cohesive Afterpay and merchant collaboration.
Another campaign that we launched recently was an initiative with Finish Line — a partner to JD Sports — called The Dropshop by Afterpay. It opened access to a Nike sneaker that you couldn’t get anywhere else in the US — only available on Afterpay. The sneakers sold out within 12 hours. Through The Dropshop, we are unlocking exclusive access to limited edition merchandise, offers and experiences. We want to create shoppable moments that are only available to Afterpay customers. It’s going to be critical to how we build interesting marketing programmes.
What will the next iteration of creative partnerships between Afterpay and its clients look like?
Innovation will come as we build out all of our various verticals. The home category, for example, is one that is thriving for us. For home, we know from a curiosity perspective that people will go to Pinterest. We are currently working on an interesting programme that we will position to our home partners, involving back-to-school curation.
The roll out of our in-store proposition in the US is a huge priority for the next financial year, with the world opening up post-pandemic. We are seeing an increase in demand for consumers to have access to flexible payments through an omnichannel experience. In the US, the adoption rate for in-store has been strong with 3.5 million US customers setting up the Afterpay Card for in-store purchasing in its first six months.
We are now also principal sponsors of New York Fashion Week. We’ve spent a lot of time rebuilding what that will look like this September. You will see the physical, the omnichannel and the consumer elements. There are no boundaries in how we should be showing up as a partner.
Sigal Bareket, vice president of customer growth and lifecycle marketing at Afterpay
How does Afterpay apply its customer acquisition strategies to suit both consumer markets and merchant partners?
If you get the experience to work with the user, tailoring an experience that users feel truly works for them, they will love the service and will keep using it. As they keep using it, they will love the routine it provides.
Instead of us trying to understand what works for users versus what works for merchants, the growth team takes a predictive-based approach, trying to anticipate user behaviour. We are asking, “What’s going to be the next need of the user? If they are starting from a certain category, what will most likely be their next?” If we can be there for the users, on the merchant’s channel and on our own channels, and anticipate their needs, then interests align. The merchant will be happy because we see the needs of users across all categories. The user will most likely be happy because they feel that we see them. That’s the way to reconcile merchant and user needs.
What processes are used to generate this understanding of the consumer behaviour?
A growth team is a fascinating beast because it has marketers, analysts and product managers all working on the same task, bringing their own specific abilities into this mix. The marketers are bringing their user empathy and trying to predict or listen to user behaviour. They will bring in the hypothesis, then we will run a survey and study the behaviour. We then come up with ten experiments to test the best way to help the user over identified hurdles. Whatever is proven to be working, the scientists and product people will automate it. It’s constant test, trial and automation.
We are using this growth hacking method as well as predictive data science to constantly be on top of the user lifecycle. But you need the technology to personalise the experience. All of this has to be sitting on a very sophisticated predictive technology that will create the right experience for the users and trigger a personalised email.
Which customer acquisition strategies are proving a powerful retention tool?
We take our internal rigour and focus on product recommendation outside of our ecosystem and into Facebook, Google and into our media buying activities. We use creative automation to show shoppers product via Facebook ads. We’re trying to combine our user data, the data that Facebook has on its users and auto-catalogue merchants to present shoppers with the right products. Then, we automatically break the price point into four. Shoppers see the product they want, in four payments, so they click through, sign up to Afterpay and purchase. Right after, we can then send them the next product they will most likely be interested in. If we invest in the early lifecycle, the rest of the lifetime value is pretty much there.
Now, some merchant partners are repurposing their own marketing dollars and telling us to use it on their behalf. With our tools and team of experts, they have full transparency of what’s happening. I think we have years ahead of collaborating, refining, building and hypothesising around finding users and matching them with the next product they’re most likely to buy. We have an exciting future of continuing to match technology against merchant needs and user needs, creating a big ecosystem. In many ways, we are just getting started.
This is a sponsored feature paid for by Afterpay as part of a BoF partnership.