- Key insights: Affirm is launching its first-ever 0% Days, a three-day shopping event pushing 0% financing offers from top retailers.
- What's at stake: The BNPL lender is looking to draw more people into its app, which will allow it to offer the Affirm Card to more consumers.
- Forward look: The sales event, depending on its success, could become an annual occurrence.
Affirm is jumping on the pre-holiday shopping train with its own Amazon-style multiday sales event pushing the buy now/pay later lender's popular 0% financing offers.
The firm is launching 0% Days, a three-day campaign in its app that takes place Oct. 22-24. Thousands of merchants will offer promotional financing with interest rates as low as 0%, according to the company.
Some of the country's
"Consumers have a very specific ask from us, which is, 'How can you do more zeroes for us?'" Kapoor said. "There's a lot of folks who find us at the point of sale, get a 0% loan, and when they come to the app … they're looking for more 0% deals."
Merchants also want to offer more 0% subvented financing to draw more potential customers and increase conversion rates and cart sizes, he said.
"We have tens of millions of visitors to the app," Kapoor said. "With this, we are expecting a whole slew of new customers and existing customers trying to come in and transact within the Affirm ecosystem."
Affirm is looking to take a page from other major retailers and capitalize on the ever-extending holiday shopping season. Amazon holds a version of Prime Day twice a year in July and October. Target has Circe Week, a quarterly, weeklong sales event that was most recently held Oct. 5 to 11, and Walmart holds rollback deals regularly to push products.
These sorts of promotional events have proven to work, said Ben Danner, a senior analyst at Javelin Strategy and Research.
"These formulas are successful," Danner told American Banker. "Having these days that are built towards holiday offers and capitalizing on the fervor of getting ready to go out and make holiday purchases, they do draw customers en masse to at least go and look at these deals and make some purchases."
For example, the sales average for July's four-day Amazon Prime Day was 140.3% higher than the 30-day sales average leading up to the event, according to digital marketing agency Acadia.
The event also provides Affirm with key marketing for its own brand, Danner said. "It's obviously about the purchase volume and people buying things, [but also] it's all about the marketing piece of it, so they can market the
The Affirm Card and
But Affirm will have to contend with depressed consumer sentiment over rising prices and the labor market as it looks to convert window shoppers to actual customers.
"Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers' minds," according to the University of Michigan's Survey of Consumer Sentiment. "At this time, consumers do not expect meaningful improvement in these factors."
Heading into the holiday shopping season, there are two kinds of shoppers: cautious shoppers and confident shoppers, according to Ingenico's Holiday Shopping Guide.
"Retailers who embrace flexible payment solutions — like Buy Now Pay Later, split payments, and frictionless mobile wallet or contactless checkout — are best positioned to serve both segments," said Ingenico's North American Head of Marketing Sandra Ishak in a statement.
Younger adults and women lead the cautious approach, with 74% of 18 to 24 year olds saying they had concerns about affording gifts this year. Adults aged 35 to 44 said they were entering the holiday season with confidence; 62% of this group said they planned to spend more this year, and 63% said they expected to use more credit to handle those larger balances.
