Keyzar Jewelry offered PayPal’s Pay in 4 and Shopify’s Shop Pay Installments as buy-now-pay-later (BNPL) options as soon as it launched its ecommerce site in January 2021. It was a natural fit for the retailer with an average order value of $2,500, says Chief Marketing Officer George Pich. What surprised him was that customers were not happy with this selection. Through the retailer’s Contact Us web page, shoppers voiced what they wanted: Klarna.

In May 2021, Keyzar Jewelry launched Klarna as a buy-now-pay-later option. Within 30 days, Pich says customers that paid using Klarna were spending more than those who paid in other ways. Conversion rates increased about 6% in the first month and another 5% the next month.

“Our conversion went up by a total of 11% in those first two months,” Pich says. Overall web sales increased about 14%, he says.

Sales increases like that explain why so many online retailers are quickly adding pay-later options. 45.7% of Digital Commerce 360’s Top 1000 online retailers — North America’s leading retailers by web sales — offered a BNPL option in 2021, up from 28.2% in 2020. And 7.4% offered two or more BNPL options, an increase from only 1% in 2020.

Small- to mid-sized retailers are also offering BNPL, with 32.9% of Digital Commerce 360’s Next 1000 offering at least one BNPL option. The Next 1000 lists retailers ranked Nos. 1,001 to 2,000 by online sales.

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