With highly coveted Gen Z and millennial consumers far less likely to have credit cards than older generations, financing options offer an attractive alternative for younger consumers looking for flexible payment options. Yet only three brands in Gartner L2’s Digital IQ Index: Activewear — Alo Yoga, Teva, and Skechers — offer buy now, pay later financing in 2019. Teva and Skechers only offer the financing option for products above approximately $35, with Teva displaying the amount of four interest-free payments right beneath the price on product pages.
Alo Yoga introduced buy now, pay later in November 2018, announcing the option in an email to nearly all of its subscribers. The brand, which offers more than 100 distinct styles of yoga leggings ranging from $50 to $150-plus, partners with vendor AfterPay to offer the financing option across its assortment. In doing so, Alo Yoga follows in the footsteps of innovators like Warby Parker and BANDIER as well as sneaker resellers like GOAT and StockX that have been quick to adopt alternative financing options.
Consumers are responding. A third report that because of a payment plan, they made a purchase they wouldn’t have otherwise — and 36% claim they bought something more expensive. As activewear brands consider how to incentivize younger customers to convert on premium products, they should keep an eye on how women’s-focused brands like Alo Yoga are leveraging financing options to extend their reach to millennials and younger consumers.