With more than 11.3 million active customers spanning major global markets including the US, Canada, Australia, New Zealand and the UK, where the company is called Clearpay, payment solutions firm Afterpay is well positioned to offer the fashion industry insight into shopping patterns and behaviour.
Offering its solutions to more than 64,000 merchant partners, Afterpay has been quick to evolve how it serves these retailers beyond payment solutions. Equipped with valuable consumer data — from top selling categories to preferred channels and new versus returning shoppers — Afterpay establishes feedback loops with its partners to extrapolate key insights that can inform strategic planning and decision-making.
Today, this data is providing partners and Afterpay itself with further growth levers. In tracking the growing appetite for omnichannel solutions accelerated by the pandemic, Afterpay has rolled out its payment services into brick-and-mortar stores. It hast also facilitated cross-border shopping, allowing partners to open their e-commerce sites to Australian, British, Canadian and New Zealand markets through Afterpay.
Now, BoF sits down with Afterpay Chief Revenue Officer Melissa Davis to hear how partnerships have evolved beyond payment solutions, the company’s advancing use of data and the opportunity for partner growth in taking its solutions in-store.
What growth levers does Afterpay offer its merchant partners?
In partnering with us, the vast majority of our partners see an increase in average order value, conversion, more frequent shopping behaviours and repeat purchases. With so many consumers also starting their shopping journey at Afterpay, we send a huge amount of referral traffic to our partners — in November alone we generated over 35 million leads to brand partners globally.
That converts at significantly higher rates than other affiliate channels because these are shoppers with intent. In [launching] Afterpay as an in-store product for some merchant partners, merchants are able to sell items at full-price to a wider audience, while also seeing an increase in the number of units per transaction in-store, a reduction in return rates and a two to three times higher AOV (average order value).
How does Afterpay find unique synergies for its merchants using data analysis?
We have a wealth of customer data for our merchant partners. We can feedback on what they are purchasing, when they are purchasing, the top-selling items, the types of consumers that they are attracting and new versus returning customers.
We are thinking about how we close the circle — how we help drive new customers in store.
Now, we go further and consider how all that compares to their industry average. If we are talking to a beauty retailer, we can measure their metrics against the beauty industry as a whole. They are able to then fine-tune strategies and product offering based on data that we provide.
We also provide them with a regular cadence of research on macro changes. We did a next gen index — an economic series on consumer spending and insights — that considered how Gen-Z and Millennials are really spending. We found that 60 percent are much more concerned about keeping track of their finances in a post-Covid world; 57 percent of them are thinking about budgeting; and 50 percent are looking to be able to use instalment payments in a post-pandemic world.
Armed with this data, we are working closely with our partners on how we target and speak to those customers. Towards the end of 2020, we worked with Crocs on a unique TikTok campaign and it garnered over six billion views. It makes it a much fuller 360 marketing campaign where we are able to really tap into a different type of audience, engage with them in a fun way and bring the partnership to life — down to unique jingles and involving the right influencers.
What other merchant success stories are most emblematic of next gen partnerships with Afterpay?
During our holiday season, we partnered with a number of our top retail partners on a shoppable holiday campaign. Those partners saw as much as 131 percent increase in sales during the Black Friday and Cyber Monday period compared to the previous three weeks. We are seeing the clear benefits of some of the campaigns that we can create and the partnerships that we can drive.
Another success story is our recent partnership with Simon Malls. Aimed at raising awareness with a younger audience, we partnered with Simon Properties through a targeted campaign where we knew who consumers were and spoke to them in their language. It was fascinating to learn that Gen-Z actually still prefers to shop in-store. It has all come full circle — that in-person experience is still unlike no other.
How is the dynamic between Afterpay and its merchant partners evolving?
For us, it is now about taking the data to the next step — making it actionable. For example, retailers might know their customers are shopping at a certain time of day, but they are shopping with competitors or they are shopping industry-wide differently. So, what can they do to target them at the right time? We are creating certain audience developments to say, “These are the customers we haven’t been able to attract. How can you create segments on social networks and others to be able to attract them?”
It is now about taking the data to the next step — making it actionable.
We are also thinking about some of the macro-economic trends at play. The rise in contactless solutions and capabilities, such as Buy Online, Pickup In-Store — being able to cater to the trends that are becoming increasingly important for retailers is important to us. So, we are now prioritising an omnichannel approach, moving to a solution that is available in-store as well as online. We are thinking about how we close that circle and help drive new customers in-store. We have had over two million consumers download our in-store solution to be able to use it, which is helping to capitalise on demand when they are near to stores.
How relevant are Afterpay’s fashion industry merchant partners to its growth strategy?
Fashion margins are essential to our growth — they are core to our DNA. We have seen an increased interest from top fashion and luxury brands from the time that we launched through to the present day. We believe Afterpay is a powerful tool for the fashion industry to attract new customers and help consumers to break up those payments. Many of our partners are also seeing 50 percent new-to-file consumers — we are helping fashion merchants open up to a new audience and drive their businesses forward.
Going from online to in-store, moving to offer a full 360-degree experience, the partnerships that we have beyond retailers with Simon Malls and others are all critical, and a part of our evolving commitment to the fashion industry.
This is a sponsored feature paid for by Afterpay as part of a BoF partnership.