Growth of 'Buy now, pay later' shows inflation's continued domination of household budgets

According to Adobe Analytics, the 'buy now, pay later' trend played a significant role in the 2023 holiday shopping season, contributing $16.6 billion in online spending– up 14% from the previous holiday season. Vivek Pandya, Lead Analyst, Adobe Digital Insights, joined TheStreet to discuss what this growing trend says about U.S. consumers.

Full Video Transcript Below:

J.D. DURKIN: What does this tell you right now about the state of the U.S. consumer? Is this just a new way to pay for things. And people are kind of trying it out? Or does this tell a little bit of a deeper story given where we are with the U.S. economy?

VIVEK PANDYA: It definitely tells us that consumers are being very strategic and cost conscious and very specific about how they purchase and how they buy. Yes, it's a new mode of transaction and that's holding some level of appeal. I mean, the idea of installment payments has been around for decades, but the way it's being integrated across these online channels is very new. And so that's helping drive some of that growth. And that's not something to be too concerned about. 

But I do think in an environment where retailers are looking to try to drive more growth, you know, they have to be cognizant of the fact that you still have consumers who are not spending like they did back in 2020 and are having to be very conscious about areas of the economy where there's still heavy inflation like food, like housing, and that has knock on effects to their regular consumption purchasing. So the fact that we're still seeing people lean on, buy now, pay later, and that growth, I think speaks to consumers having, wanting to spend and needing to spend on certain goods, but having to kind of be very strategic and not overspend because they're having to lean on these types of options.