Grocery eats up more ‘buy now, pay later’ online purchases
BNPL orders jumped 40% for the retail grocery category in January and February, Adobe Analytics data show.
![Buy Now Pay Later-BNPL-online purchases_Shutterstock Buy Now Pay Later-BNPL-online purchases_Shutterstock](https://eu-images.contentstack.com/v3/assets/blt58a1f8f560a1ab0e/bltecda34857ca4f4ba/669f11bdc5b2a9998cdef842/Buy_20Now_20Pay_20Later-BNPL-online_20purchases_Shutterstock.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
“Buy now, pay later” programs typically are associated with higher-ticket consumer goods. But groceries recently have become a bigger part of the BNPL mix.
New Adobe Analytics e-commerce data released Wednesday show that grocery’s share of BNPL online orders jumped 40% year over year in the first two months of 2023. That well outpaced overall BNPL order-share growth of 10% for the period and 14% for all of 2022.
Adobe described the two-month grocery BNPL growth as “staggering.” The number even topped online order-share gains of 38% for home furnishings and 8% for apparel as well as a 14% decrease for consumer electronics—retail categories better known for BNPL purchases.
While overall growth in BNPL use online demonstrates that economic uncertainty is pushing many shoppers to delay payment for purchases, revenue from BNPL transactions dropped 19% year over year for January and February, indicating that consumers are using this payment method for smaller purchases, according to Adobe.
Elevated inflation also has played a role. The food-at-home Consumer Price Index (CPI) rose 0.3% in February, the smallest monthly gain—along with a 0.4% uptick for January—since December 2021 (0.4%), the U.S. Bureau of Labor Statistics reported. Year over year, the food-at-home CPI was up 10.2%, down from 11.3% in January and continuing a steady decline since August. Still, a recent FMI-The Food Industry Association shopper trends poll found that 48% of consumers are extremely concerned about high grocery pricing, up from 40% in October.
“The rise of ‘buy now, pay later’ usage for groceries tells us that consumers are likely making bigger purchases online to take advantage of special promotions and stock up on staples, thus managing living expenses in more flexible ways,” Vivek Pandya, lead analyst for Adobe Digital Insights, said in a blog post on Wednesday. “The strong online growth of home furnishing purchasing is expected to bolster ‘buy now, pay later’ adoption, given the higher ticket prices in this category.”
February’s overall CPI was up 6% year over year, down from a 12-month gain of 6.4% in January, while on a monthly basis, the February CPI edged up 0.4%, down from 0.5% in January. Still, Adobe noted, lingering online price inflation has pushed consumers to buy more lower-ticket-price goods, including in grocery.
Evaluating major retail categories, Adobe grouped goods into four pricing tiers and tracked changes from January 2019 to February 2023. The latest Adobe Digital Pricing Index (DPI), released Wednesday, showed that the cheapest pricing tier ramped up its share of sales across categories, including groceries ( 35.6%), electronics ( 57.1%), apparel ( 36.1%) and home furnishings ( 42.8%).
Grocery and home furnishings, in fact, have been online retail sales drivers, according to Adobe Analytics data. In February, online spending for grocery surged 26.7% year over year to $8.4 billion, and spending for the home furnishings category swelled 12.9% to $9.4 billion, Adobe said. Meanwhile, February online spending fell 5.4% to $13.6 billion for elections and dipped 0.6% to $11.3 billion for apparel.
The trends were similar for 2022. Online spending for the year was up 10.8% to $86.8 billion for grocery and 10.2% to $126 billion for home furnishings. In 2022, consumer electronics again led as the largest category by total spending at $202 billion but saw just 4% annual growth. Apparel, too, remained one of the biggest spending categories for online retail at $171.8 billion yet saw that total decline 3.8%, Adobe reported.
“E-commerce demand has remained resilient in an uncertain economic environment, driven in part by lasting pandemic habits where consumers had no choice but to leverage online food and home furnishing shopping services,” Pandya said in the blog. “Now consumers have embraced the rich e-commerce experiences that made them feel comfortable getting these necessities delivered to their doorsteps, making these categories new growth drivers in the digital economy.”