How OverstockArt.com Is Using BNPL To Drive Sales For Homebound Customers

Home is where the heart is, but during the COVID-19 pandemic, it is also where the playground, office, bar and school now reside. Many U.S. consumers have recently been — and will continue to be — stuck at home for the bulk of their daily activities, even as some states cautiously reopen beaches and outdoor (and in some places, even indoor) seating at restaurants. All of this time spent at home is leading many consumers to consider redecorating to freshen up the surroundings they so rarely escape. Online browsing for home décor items shot up 205 percent in March compared to browsing levels in February, according to one recent study, while home decorating retailers such as Home Elegance and Hive Modern reported 200 percent jumps in their month-to-month traffic during that time frame.

Many big-ticket furniture items still retain their luxury price tags, however. The trick to turning this rise in online browsing to one of online purchasing will be persuading customers that they can comfortably afford them even when they are more carefully watching their disposable income, said David Sasson, president and CEO for Wichita, Kansas-based online art company OverstockArt.com.

Buy now, pay later (BNPL) has been “impactful,” Sasson said in a recent interview with PYMNTS. “I think during a time like this, when people are a little less confident about their financial futures, if you are making an investment like this, [methods such as BNPL can help].”

OverstockArt.com, which sells both reproductions and original artwork, partnered with BNPL provider Afterpay to create that comfort, according to Sasson. The company has experienced expanded customer usage of BNPL since the start of the pandemic.

BNPL can also be one way for retailers to convince consumers to buy their products rather than competitors’, especially because the wariness that many millennial and Generation Z consumers feel toward credit products has yet to wane.

Decorating On A Budget 

Delivery services such as FedEx and the United States Postal Service (USPS) report that shopping for home decor is becoming more of a pastime for Americans social distancing in the comfort of their homes. Both organizations have seen deliveries for such items ramp up in recent months. The reason consumers are becoming more interested in home decor products such as art and furniture is simple, according to Sasson. Several months spent inside due to COVID-19 health concerns is leading them to reconsider their spaces, he said, adding that OverstockArt.com also saw a more than 100 percent increase in transactions on its platform year-over-year for April.

“If you are going to watch a movie, you are going to watch it at home,” he said. “If you are going to eat dinner, you are going to eat at home. [Consumers] are doing all these things [here] so the house is becoming … more and more important a place for [them]. So, people are investing in homes. … They are having [their] disposable income kind of shifted toward home purchases.”

This urge to comfort shop also comes with financial worries for some consumers, especially for millennial or Gen Z consumers, who are wary of acquiring more debt. The average millennial carries $4,172 in credit card debt already, according to one recent study, and 22 percent of millennials promptly spent or made plans to spend their stimulus checks on erasing part of that debt. Retailers thus need to find ways to satisfy that desire for luxury projects despite consumers’ ongoing credit concerns — and to turn those digital window shoppers into buyers. That is where BNPL interest resides for both customers and retailers, Sasson said.

“I think customers feel comfortable knowing there are no high-interest rates [with BNPL],” Sasson said. “They can make their payments on time, there are no [card] penalties. I think that is the biggest thing for customers from the standpoint of, ‘I am not getting into debt, into something I cannot manage.’”

BNPL has therefore garnered rising interest among retailers and consumers during the pandemic, since removing that additional stress for consumers can help increase conversion. It is also important for retailers to consider how this payment behavior will continue in the pandemic’s aftermath, however.

BNPL In A Post-Pandemic World

The retail sector, much like other industries, is currently trying to stay abreast of consumers’ short-term needs. That means supporting payment tools and experiences that fit the current needs of consumers at home who have very specific lists of financial constraints directing where and how they shop. Retailers must also consider which behavioral changes are likely to continue in the future and strategize how they can stay atop these shifts when stay-at-home orders have fully passed.

Sasson has seen awareness of BNPL continue to grow in the retail space for the past several years and is keeping an eye on the payment method, considering how it could be advanced for customers’ emerging needs. The company is also looking into how it can interact with consumers on other channels, such as mobile.

“We have seen a major increase in mobile use in general,” Sasson said. “Mobile traffic [and] mobile purchases are up considerably, so we are going to explore tools that are going to allow for utilization of mobile in an easier way.”

BNPL use on mobile devices is also interesting, he noted, especially as customers continue to expand their use of this channel. Retailers that want to catch consumers must therefore be sure they are considering how consumers locate products on different devices as well as how they pay. Keeping up with popular payment methods and technologies and why consumers use them will be an important differentiator for companies looking to drive revenues in the future.