US brands are experimenting with alternative payment options as a means of driving sales and reaching new demographics. Buy-now, pay-later encourages shoppers to spend more money and is especially appealing to younger shoppers with less cash immediately at their disposal. Companies are partnering with payment solution providers to enable shoppers to pay for purchases in installments. So for instance consumers can opt to make up to four interest-free payments over the course of two months. lead to shoppers paying more. Since multiple payments make a hefty price tag seem more palatable, consumers are more likely to pay full-price rather than wait for sales or discounts. Such programs increase conversion rates and incremental sales by up to 30 per cent.

Providing multiple options is especially important for younger consumers who are used to having flexibility in the way they shop and engage with brands. It is anticipated that buy-now, pay-later programs will eventually take the place of store credit cards, which are declining in popularity but function similarly in that shoppers can make payments over a longer time period.

Buy-now, pay-later is a smart way for apparel brands to reach Gen Z and millennial shoppers, taking a cue from methods long used successfully in other industry categories like electronics and home goods.