Urban Outfitters (URBN) is giving U.S. online shoppers a new payment option.
The fashion and lifestyle retailer, whose banners also include Anthropologie and Free People, is teaming up with global retail bank, payments and shopping service Klarna to offer online customers in the U.S. buy now, pay later” (BNPL) payment. BNPL enables shoppers to flexibly pay for purchases in four installments, with no additional cost when payments are made on time. The retailer is leveraging the Klarna Pay in 4 solution online at its Urban Outfitters, Anthropologie, and Free People banners. BNPL will also be available for online U.S. purchases of items from the BHLDN and Terrain brands.
This new U.S. partnership is an extension of an existing collaboration between Klarna and Urban Outfitters banners across 11 European markets including the U.K., Austria, Germany, Belgium, Netherlands, Spain, Finland, Italy, France, Portugal, and Ireland.
The future of BNPL looks promising
Urban Outfitters entering the BNPL space as data is indicating it is popular with desirable younger consumers (a key Urban Outfitters shopper demographic) and growing rapidly. According to data from eMarketer, millennials account for 42.7% of BNPL payment volume, followed by Gen Z shoppers, who account for 30.3%.
In addition, data from Juniper Research indicates BNPL is poised for rapid near-term growth. The study shows that spending via BNPL services which are integrated within e-commerce checkout options, including fixed installment plans and flexible credit accounts, will reach $995 billion in 2026, up 274% from $266 billion in 2021.
Juniper Research analysis also indicates that BNPL growth will be fueled by a greater consumer appetite for credit to spread costs, particularly in the wake of the COVID-19 pandemic. As a result, by 2026, BNPL services are expected to account for over 24% of global e-commerce transactions for physical goods by value, up from 9% in 2021.
In addition, according to shopping insights released by Klarna, 77% of consumers surveyed globally say retailers should continually invest in new tech to meet their evolving expectations. More than half (51%) of surveyed global consumers noted their most-wanted innovations for online shopping are frictionless payments.
“Our aim is to offer consumers the shopping experience that best works for and fits with their lifestyle,” said Demo Lymberopoulos, global executive director, customer technology at Urban Outfitters. “As consumers increasingly demand more convenience for how they shop and pay, we are thrilled to continue our partnership with Klarna to enable U.S. shoppers to pay how and when they want across their favorite brands.”
“A smooth online shopping experience continues to play an essential role in how consumers engage and connect with retailers today,” said David Sykes, chief commercial officer at Klarna. “We are excited to build on the success we’ve seen with the Urban Outfitters portfolio of brands in Europe, and expand our popular interest-free payment solutions to the U.S. market.”