John Lewis boss: Customers want to buy now, pay later
John Lewis boss: Customers want to buy now, pay later
The boss of John Lewis Partnership has revealed that he expects the mid-market chain to offer its customers Klarna-style buy-now-pay-later (BNPL) deals in the future.
Speaking exclusively to The Mail on Sunday, Nish Kankiwala, who was appointed as the first-ever CEO of the John Lewis and Waitrose group in March, said: ‘I think we’re going to develop a product that is buy now and pay later. This is certainly expected among the younger generation.’
The introduction of buy-now-pay-later at John Lewis, whose stores are synonymous with decency, would mark a turning point for the industry, which has boomed in recent years.
Last year, nearly 9 million Britons used BNPL, which allows customers to pay for their purchases in interest-free installments, usually spread over three months.
But despite its popularity, it has an image problem and many claim that it lures customers into debt. Most BNPL users are female and the average purchase price is £80. It is most commonly used to buy shoes and other fashion items.
The future?: The introduction of buy-now-pay-later at John Lewis would mark a turning point for the industry
Spread payment is popular with younger customers, but is quickly spreading to older age groups.
The average age of a customer at Klarna, the largest BNPL operator, is 36 years old. The fastest growing age group is 58 plus.
John Lewis already offers its own version of BNPL, but only on some more expensive home and nursery items costing over £500. Unlike other major retailers, shoppers on the John Lewis website cannot choose to pay with Klarna or competing providers such as Clearpay and Laybuy.
Full-scale BNPL will not be rolled out at the retail chain in the foreseeable future.
In a separate push, John Lewis will introduce an interest-bearing credit option this fall that charges 16.9 percent for electrical goods purchased online or through the app. This is extended to furniture and in-store purchases. Under a five-year plan set out by chairwoman Dame Sharon White, the partnership is investing £100 million in expanding its financial services business, which it aims to quadruple over the next five years.
Critics will probably be alarmed that the John Lewis CEO is considering a full BNPL, as it would be seen as a sign of social acceptance.
The Treasury has promised to regulate the industry, but this is still under review.