For millions of consumers, having a limited or blemished credit history means traditional conduits of credit are inaccessible, and so they cannot buy larger-ticket durable goods items. But alternative payment options such as buy now, pay later (BNPL) are gaining traction, and can make those purchases more affordable.
The report “Finding Retail’s Invisibles: Leveraging Flexible Digital Payments to Reach Underserved Durable Goods Customers,” done in partnership between Katapult and PYMNTS, surveyed 2,122 respondents to determine how consumers deepened their relationships with merchants when offered a range of payment options.
Among the findings: As many as 75% of U.S. consumers bought durable goods through the past year. About 40% of those purchases were for home appliances; nearly 38% were for home furnishings.
But in buying those goods, the consumers – particularly younger ones, such as millennials and bridge millennials – have been embracing lease-to-own options. Roughly a quarter of those who bought home appliances opted for lease to own or other types of financing; a slightly smaller percentage did so with home furnishings.
An overwhelming majority of consumers said they used these options partly due to the ability to manage their expenses and satisfy their immediate need for items.
The study found that 43% of former lease-to-own program users see the option as incentivizing them to shop with a particular merchant. Almost 22% of all respondents said their willingness to shop is higher with merchants that offer lease-to-own programs. That percentage increases to 35% for millennials, who report that lease-to-own options incentivize them to shop with a particular merchant.