Pick and click: The use of buy-now-pay-later in the scope of bracketing purchase behaviour

Abstract: Enabled by technological advancements, e-commerce has taken over the retail space expeditiously the past decade. Without the typical brick-and-mortar store, retail brands face novel shopping behaviours that are tricky to comprehend. One of these behaviours is bracketing purchase behaviour (BPB), which is when you buy several versions of the same item, different colours or sizes, with the intention of returning some of them. Moreover, retailers report that some shoppers are abusing buy-now-pay-later (BNPL) services and use it as a tool to order multiple variants of the same item to try at home and return at least one of those items without ever having to debit money from their personal account for what was returned. Thus, this study aims at investigating how much more prevalent BNPL is in BPB scenarios compared to direct payment solutions and to provide an understanding of what motivates those who engage in BPB to use BNPL, which is unprecedented in contemporary research. The research involves a quantitative approach and consists of two studies where the first study consists of an analysis of transaction data from a medium-sized Swedish fashion brand and the latter consists of an analysis of a consumer survey which looks at perceptions, motivations, and behaviours. The results showed that a significant majority of bracketing orders are made using BNPL. What motivates BNPL usage in BPB scenarios is avoidance of pain of paying, mitigation of payment risk, and avoidance of liquidity loss. This paper breaks the ground for more future research on the topic of motivations for BPB and BNPL services' influence on consumer behaviour.