The rising cost of groceries is pushing more consumers to use Buy Now Pay Later (BNPL) services for necessities such as groceries, according to new data from Adobe Analytics.
In January and February, BNPL's share of online purchases jumped 10 percent year-over-year, while revenue fell by 19 percent. This suggests more consumers are using the services for smaller purchases. In the meantime, groceries share of BNPL purchases skyrocketed 40 percent.
That compares to a 8 percent increase for apparel and a 14 percent drop for electronics.
“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,” said Vivek Pandya, lead analyst at Adobe Digital Insights.
Overall, ecommerce demand is holding up despite economic uncertainty. In 2022, consumers spent $86.8 billion on groceries on ecommerce platforms, up 10.8 percent year-over-year.
“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.
Apple CEO Tim Cook said Thursday that the majority of iPhones sold in the U.S. in the current fiscal quarter will be sourced from India, while iPads and other devices will come from Vietnam as the company works to avoid the impact of President Trump’s tariffs on its business. Apple’s earnings for the first three months of the year topped Wall Street’s expectations thanks to high demand for its iPhones, and the company said tariffs had a limited effect on the fiscal second quarter’s results. Cook added that for the current quarter, assuming things don’t change, Apple expects to see $900 million added to its costs as a result of the tariffs.
