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At Affirm, Insights Into Consumer Behaviour in 2021

Payment solutions company Affirm surveyed thousands of US consumers to better understand recent shifts in spending. Here, Chief Commercial Officer Silvija Martincevic shares the most important findings.
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A woman walking with luggage at a railroad station. Getty Images. (Klaus Vedfelt)
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Analysing the survey responses of 2,000 US consumers, Affirm has identified prevailing attitudes towards expenditure and specific spending behaviour that will inform consumer trends in 2021. In its New Year Report, 62 percent of respondents stating their spending is shifting to new categories in 2021, while 68 percent of consumers will focus their expenditure more on experiences in 2021.

These findings are echoed by BoF and McKinsey & Co.’s State of Fashion Report 2021, which states: “tourism and experiences are poised to rise in popularity once there’s a proven vaccine. Brands must be prepared for another sudden shift back to pre-pandemic consumer trends.” Forty-three percent of respondents learned to be more intentional about their purchases in 2020 — and plan to take that learning with them into 2021.

Affirm’s partner retailers are present across the value chain and in numerous verticals in addition to fashion and luxury, including beauty, home and lifestyle, travel, personal fitness, electronics, auto, events and experiences, with a diverse roster of clients that includes the likes of Expedia and Eventbrite as well as Oscar de la Renta, Walmart and Peloton.

As a result, the company is able to channel its survey consumer data from across these verticals into its analysis, creating original insights for its network of 6,500+ retailers to better understand the 6.2 million customers using its services.

The latest in a four-part thought-leadership series with Affirm, BoF speaks to the payment solution company’s Chief Commercial Officer Silvija Martincevic to learn more about the community insights from Affirm’s latest consumer survey and how the payment solutions company seeks to adopt and share its findings in 2021.

Affirm’s Chief Commercial Officer Silvija Martincevic.

What was the purpose behind the New Year survey?

We conducted the New Year survey because we were interested to see how our consumers are approaching the new year. Everything went out of the window in 2020 but that doesn’t mean once coronavirus is gone that everything will go back to how it was. In fact, the opposite is true.

Affirm prides itself on being a consumer-driven brand and company, so it’s important for us to understand consumer behaviour. Then, at its core, Affirm is a technology company. The way that we add value to our merchants, retailers and consumers is through innovation. We are excited to continue to build products that will help merchants grow and build products that will help consumers be more financially responsible.

What insights can you share that are relevant to retailers in the short term?

First, we learned that traditional New Year’s resolutions, like joining a gym or losing weight, are a thing of the past — 52 percent of respondents said those materialistic resolutions are no longer applicable to their lifestyles. Instead, respondents are looking to improve life skills — 62 percent said they’re looking to save money for future expenses and 54 percent want to be more in control of their finances.

Then, we found 68 percent of consumers will focus their expenditure more on experiences. Travel and experiences have been the most vibrant for our sales teams in the last two or three months because travel, concert and experience businesses are getting ready for resurgence.

What were your key findings of the survey looking further forward?

We saw that 62 percent of respondents said that they’re going to shift their spending into new categories in 2021. They want to try new things and customers are getting ready for what’s to come — so there’s a lot of hopefulness.

As awareness and activism increased around racial injustice in 2020, consumers also began to vote with their wallets — and our survey found 43 percent of respondents learned to be more intentional about their purchases in 2020. So, consumers are going to be a lot more thoughtful in which brands they engage with and how they spend their money in 2021. This is why we’re seeing some mission-driven companies take great market share.

How are consumer attitudes toward payment solutions evolving?

The Buy Now, Pay Later solution was a nascent alternative payment method a few years ago, but 45 percent of respondents said they used that solution in 2020 and 54 percent are interested in using the solution in 2021. Travel is also adopting Buy Now, Pay Later in droves to drive affordability because consumers, coming out of this pandemic, don’t want to put a $5,000 trip on a credit card. I think travel is going to be definitely an interesting place for an adoption of these alternative payment systems.

When you’re fuelling payments, driving merchants’ growth, you have to talk to your merchants regularly about how you’re adding value.

To me, that speaks to the massive change in the way that we spend, and we believe there are three reasons for this shift: one is its affordability. That $1,000 sporting equipment can now be $100 a month, with no late fees, which allows a consumer to spend in a responsible way and buy something they need that they otherwise wouldn’t be able to.

Two, is its predictability — we use a subscription-like payment model, so it works similarly to models like Rent the Runway or Netflix. Three, it brings transparency, so you are a lot more in control of your finances. You have a clear understanding on how much you will pay and by when. We think that this New Year’s resolution of balancing the budget, being more financially responsible, will continue to fuel the growth in Buy Now, Pay Later.

Why is trend analysis and sharing data insights a growing part of your business?

When you’re fuelling payments, driving merchants’ growth, you have to make sure that you’re talking to your merchants regularly about how you’re adding value and what you’re finding out in the industry. So, we try to ensure our merchant partners are prepared for growth in areas where tectonic shifts have happened, such as the increased use of touchless payments and Buy Now, Pay Later, as well as the buying online purchasing in-store (BOPIS) and buying online, returning in-store (BORIS) approach.

What challenges and opportunities do your retail partners face in the New Year?

As consumers are shopping online, they want more flexibility in how they return their goods. Consumers want to shop online then pick-up curbside or return in-store, or shop in-store and return through mail. All of the different touchpoints that were created largely in 2020, like BOPIS and BORIS, are here to stay — and retailers will need to ensure that all of these consumer touchpoints are completely connected. Interconnectedness of online, mobile and in-store is absolutely critical.

Second, consumers will want flexibility in how they pay. The pandemic has brought on a massive shift away from physical cards and cash and into alternative payment methods, like touchless payments and pay-over-time solutions, because of safety and the virus among us. Buy Now, Pay Later solutions like Affirm allow them to do that.

This is a sponsored feature paid for by Affirm as part of a BoF partnership.


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