DM Jul-Aug 2021

TRANSACTIONAL DATA
// 14
How a Customer-Centric Business Model
is Driving Growth in Canada for Afterpay
How a Customer-Centric Business
Model is Driving Growth in Canada for
Afterpay
Afterpay is the leader in “Buy Now, Pay
Later” (BNPL) payments, helping millions
of users get the products they want fast and
with responsible spending in mind. More than
this, Afterpay has proven to be a valuable
marketing tool for retailers when it comes to
reaching young and engaged shoppers. Afterpay
is one of those rare “win, wins” for both
consumers and merchants, helping the brand
see unprecedented success since entering the
Canadian market.
We spoke with Afterpay’s General Manager
of North America, Zahir Khoja, to break down
what Afterpay is, how it helps merchants and
retailers understand their shoppers, and how
the brand’s customer-centric business model
has spurred Canadian growth so far.
Tell us about Afterpay. What is it and how
does it work?
Afterpay lets consumers receive products
immediately and pay over time using their own
money — always interest-free — at thousands
of retailers across the globe. Purchases are paid
in four installments due every two weeks. Since
launching, Afterpay is now offered by over
86,000 retailers and used by 15 million active
customers around the world.
How does buy-now, pay-later drive
marketing?
The benefits of using BNPL for merchants are
far reaching. For one, merchants have access
to millions of global shoppers, mainly in the
Millennial and Gen Z cohort, who are turning
away from traditional credit cards, debts and
fees. Merchants see a service like Afterpay as
a marketing vehicle, as many of our customers
will start their shopping journey on the Afterpay
platform. An average of 35 million merchant
referrals are generated globally per month from
our Shop Directory, providing a source of new
traffic to our retail partners and an increase in
cart conversation by twenty per cent on average.
What’s the cost for the merchant?
For merchants, it’s as simple as paying a small
transaction fee for the service which, in turn,
gives their brand exposure to millions of users.
Once a product is bought, the merchant ships
the product immediately and Afterpay pays the
merchant in full the next day, minus the fee.
Afterpay assumes the full risk of non-payment
so the retailer doesn’t have to worry.
Our goal is to give its
customers the ability to budget
their own money and pay over
time, instead of turning to
expensive loans with interest,
fees and revolving debt.
There’s a connection to
loyalty as well.
Afterpay has a highly tailored
user platform, which has
influenced customer loyalty
and acquisition. Tell us a bit
about how Afterpay helps
retailers understand their
overall customer demographic
and keep them coming back to
shop.
Overall, we’ve found that a
more personalized consumer
shopping experience delivers
strong value. In the US, we’ve
seen this especially with our
Favourites feature — which
allows customers to keep track
of all the items they want to
Afterpay in one place. With
this feature, shoppers return
more frequently to track saved
items, merchants see increased referral traffic
from return shoppers, and Afterpay get insights
to make better recommendations. We look
forward to bringing this feature to Canada in
the near future in our newly launched app.
We also aggregate and share purchasing
data with retail partners to help them better
understand what people were buying, when,
and why — see our latest Trend Report here.
Tracking massive shifts — like the move to
more transitional dressing as consumers emerge
from lockdown — helps savvy retailers adapt to
retail in a post-pandemic world.
How is Afterpay using its buy now pay later
service as a discovery tool for retailers?
Afterpay’s Shop Directory is a destination where
customers can find our newest merchants, and
can filter brands by category, trends, values,
and those offering sales. Whether customers
are looking to browse through our thousands of
retailers or they have a very specific item they’re
looking for, our app and website are designed to
support them through their shopping journey.
Our Shop Directory is also an important
marketing channel for our partners, connecting
the best brands in the world with a powerful
demographic of young and engaged shoppers.
Zahir Khoja is General Manager of North America for Afterpay.
Afterpay has seen great success since its
launch in Canada. What are some successes
or results you’ve noticed from your
Canadian partners?
Despite Afterpay’s relatively recent entry into
Canada, it is the most used and visited BNPL
service in the country with the highest customer
intent, according to a February 2021 Citi
Research report.
This success is benefitting Afterpay’s retail
partners in a big way. For example, recent
data shows Afterpay owns 30 per cent of cart
share with Herschel Supply Co. This is a result
of bringing approximately 150,000 shopper
referrals to Herschel between September
2020 and March 2021 from Afterpay’s Shop
Directory.
As of late, Canadian retailers such as Urban
Outfitters, Lululemon, Pandora, NARS and
Shiseido have recently partnered with Afterpay
to reach a younger demographic of consumers.
ZAHIR KHOJA is General Manager of North America for Afterpay.
Founded five years ago in Sydney, Australia, Afterpay has millions
of global customers and tens of thousands merchant partners
now using the platform globally across Australia, US, Canada, UK
(where it is called Clearpay) and New Zealand. Afterpay’s global
team is currently made up of more than 700 people and growing.
❱ DMN.CA JULY/AUGUST 2021