John Lewis boss: Customers want to buy now, pay later
John Lewis boss: Customers want to buy now, pay later
John Lewis Partnership’s boss has revealed he expects the middle-class store chain to offer its clientele Klarna-style buy-now-pay-later (BNPL) deals in future.
Speaking exclusively to The Mail on Sunday, Nish Kankiwala, who was appointed as the John Lewis and Waitrose group’s first-ever CEO in March, said: ‘I think we will develop a buy-now-pay-later product. Especially in the younger generation, people expect it.’
Introducing buy-now-pay-later at John Lewis, whose stores are a byword for respectability, would mark a watershed moment for the industry, which has boomed in recent years.
Nearly 9 million Britons last year used BNPL – which allows customers to pay for purchases in interest-free instalments spread typically over three months.
But despite its popularity, it has an image problem with many claiming it lures customers into debt. Most BNPL users are female and the average purchase is £80. It is most frequently used to buy shoes and other fashion items.
The future?: Introducing buy-now-pay-later at John Lewis would mark a watershed moment for the industry
Paying by instalments is popular with younger shoppers, but it has been spreading rapidly to older age groups.
The average age of a customer at Klarna, the biggest BNPL operator, is 36. The fastest growing age group is 58-plus.
John Lewis already offers its own version of BNPL, but only on some higher-priced home and nursery items costing more than £500. Unlike other major retailers, shoppers on the John Lewis website cannot opt to pay with Klarna or rival operators such as Clearpay and Laybuy.
Full-scale BNPL is not being rolled out at the store chain in the immediate future.
In a separate push, John Lewis will this autumn introduce an interest-bearing credit option charging 16.9 per cent on electrical goods bought online or through its app. This will be extended to furniture and purchases made in store. Under a five-year plan drawn up by chairman Dame Sharon White, the Partnership is investing £100 million in expanding its financial services business, which it is planning on quadrupling in the next five years.
Critics are likely to be alarmed that the John Lewis CEO is contemplating full-scale BNPL as this would be seen as a badge of social acceptance.
The Treasury has promised to regulate the industry, but this remains under review.