How Afterpay supported small businesses in 2020
In a challenging year, here’s how Afterpay helped fuel billion-dollar growth
Bushfires. A drought. A pandemic.
There’s little doubt that 2020 will go down as a challenging year for all Australians, and retailers and merchants were no exception.
But a new report shows that even as Australia entered its first Recession in 30 years, Afterpay helped fuel billion-dollar growth, leading to new jobs and helping to boost the bottom line of tens of thousands of small businesses.
Afterpay merchants saw more sales
Overall, Afterpay delivered $3billion in net benefits to 48,000 Australian merchants in 2020, according to the Afterpay Economic Impact Report 2020 by Accenture.
In fact, merchants with Afterpay saw average sales increase by 7.7 per cent in 2020, thanks to:
· Larger basket sizes
· Exposure to new customers
· Deeper customer engagement
· More repeat purchasing
· Improved online conversion rates
Benefits to fashion and footwear retailers
Even retailers who were hit hardest during Covid-19, such as those in footwear and fashion, were cushioned from the worst effects if they had Afterpay.
While most fashion, footwear and accessories retailers saw negative year-on-year growth on average between June 2019 and June 2020, those with Afterpay experienced a 39 per cent and 78 per cent growth respectively.
Afterpay drove referrals and exposure
Afterpay’s Shop Directories also proved to be valuable sales channels, according to the report, and generated 20 million referrals to retailers every month.
This resulted in 1.2 million orders – saving merchants an estimated $70 million in acquisition costs.
For retailers adapting to a rapidly changing, increasingly digital world, this is an enormous benefit," says Paul Zahra of the Australian Retailers Association. “Retail is undergoing a profound transformation, with the Covid-19 pandemic bringing forward a decade’s worth of change and innovation Retailers are investing in their online sales strategies and increasingly looking to new channels to engage with their customers."
For Ben Randall, Afterpay has played a critical part in the success of his business Restated Vintage, which sells rare ’80s and ‘90s vintage clothing.
When we introduced Afterpay on Restated Vintage we saw turnover roughly double, which was a great surprise.”- Ben Randall, founder of Restated Vintage
Customers reaped rewards
It wasn’t just merchants who benefited from using Afterpay. The report found that shoppers who chose Afterpay avoided $110million in credit card fees, while 90 per cent of those who shopped with Afterpay said it helped them with budgeting.
The report also revealed that Afterpay shoppers are more likely to have higher household incomes than the general population, with 48 per cent in the top two income brackets, compared to 43 per cent of the population.
For more insights into the ways in which Afterpay helped merchants and consumers in 2020, read the full report here.
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