Spending with financing services such as Affirm, Afterpay, and Klarna rose 1.3 percent on Thanksgiving, reported The New York Post. The apps allow consumers to make smaller payments over time for their purchase, oftentimes with interest.
At the same time, the average order value of the purchases made on these apps declined by 6 percent, according to Salesforce data, indicating that shoppers need more help to buy less expensive things than in prior years. In addition, retailers have also been increasing discounts as Americans can afford less and less, with the average online markdown reaching 31 percent, 7 percent higher than last year.
The largest discounted prices are in the categories of home appliances, general apparel, makeup, and luxury handbags. Macy's Herald Square in Manhattan boasted 60 percent off fashion jewelry and 50 percent off select shoes, reported ABC News.
These "buy now, pay later" apps "started as a way to finance bigger ticket items but have morphed into everyday purchases and for lower priced gifts as consumers think about the economy and their personal finances," Salesforce vice president of retail Rob Garf told the New York Post.
"After lackluster deals earlier in the season, retailers have now stepped up their discount game to pre-pandemic levels," he added.
A seemingly out-of-place statistic from Salesforce showed that consumer spending increased by 9 percent on Thanksgiving to $7.5 billion compared to one year ago, but Garf explained that "much of that growth is driven by price increases not people buying more products."
"Shoppers are buying fewer items because of inflation," he said.
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