Buy now, pay later options drive increase in e-commerce
New data from Klarna about sales of travel services and event tickets
Klarna released new data from its app in the US, indicating that travel services and event ticket sales are beginning to recover. While still significantly lower compared to an average pre-COVID week, the Airlines category saw a 26 percent week-over-week rise in average daily transactions, while one event ticket seller saw Klarna-enabled transactions increase by a whopping 330 percent week over week in the week ended May 9. Average daily sales volumes for household appliances, excluding sales made at big-box retailers, also increased significantly week over week, rising by 45 percent, while women’s accessories sales made through the Klarna app rose 12 percent.
“Our weekly data point to consumers’ desire to get back to the activities that enrich their lives, such as traveling and attending live events, as soon as possible,” said David Sykes, Head of US at Klarna. “At the same time, consumers still seem to be focusing on their home life, as data from the Klarna app revealed that sales of vacuums, stand mixers and other home appliances rose by 45 percent week over week. That may indicate that people are purchasing flights and event tickets for the future, but for the time being, are continuing to look for items that make cooking and housekeeping easier and more enjoyable.”
Expenses of the different generations
Aside from analyzing average daily volumes to identify increases and decreases in category transactions week to week, Klarna has been analyzing share of wallet — or how its app users are dividing their spending among different shopping categories — to identify what product categories Gen Z, millennial and Gen X audiences are shopping for most often using Klarna’s flexible payment options, and how their e-commerce spending is shifting throughout the pandemic.
Klarna’s most recent demographic data show that from May 3 through May 9, Gen Z and millennial Klarna app users increased their share of spending on apparel, footwear and accessories for the fourth week in a row, while Gen Xers increased their share of spending on the category by nearly 10 percent. Klarna app enabled sales at stores that sell women’s accessories grew by 12 percent week over week in the week ended May 9, suggesting that women are looking to freshen their wardrobes with seasonal accessories as more states and municipalities lift stay-at-home orders.
Klarna, which serves 7 million consumers in the US and 85 million consumers globally, will continue to analyze transaction data weekly to identify how the coronavirus outbreak is affecting e-commerce and consumer shopping behavior.
Other Key Findings
- Week over week in the week ended May 9, the apparel, footwear and accessories category’s share of all purchase transactions made through the Klarna app increased by nearly 2 percent among Gen Zers, by 4 percent among millennials and by nearly 10 percent among Gen Xers.
- Gen Xers continued their eight-week trend of shifting share of wallet toward home and garden items, with share up nearly 6 percent, suggesting they are continuing to focus on DIY projects, items that make cooking and cleaning easier, and products to make their homes more comfortable and livable. Gen Zers’ share of spending on the category rose by nearly 12 percent week over week, while millennials’ share fell by nearly 4 percent.
- Gen Zers and millennials increased their share of spending on leisure, sport and hobby items week over week in the week ended May 9, while Gen Xers’ share of spending on the category fell slightly.
- For the third week in a row, millennials and Gen Xers both increased their share of spending on electronics, with millennials’ share up 7 percent and Gen Xers’ share up 10 percent. Gen Zers’ share of spending on the category was down nearly 5 percent in the week ended May 9.
- All three demographic groups significantly decreased their share of spending on marketplaces (which include sites such as Amazon.com, Walmart.com, Target.com and eBay.com), indicating that they are looking to other retail formats to fill their shopping needs. Both Gen Zers’ and Gen Xers’ share of spending on marketplaces decreased by nearly 8 percent, while millennials’ share fell nearly 5 percent week over week.