What BNPL is, and how it affects DRTV and DTC
The explosion of e-commerce has not only changed the way we buy but how we pay. When the pandemic hit and millions of users flooded to online retailers, several already-existing businesses and ideas were thrown into full gear as they gained popularity. Buy Now, Pay Later, or BNPL, is an installment loan utilized by many online retailers today. With Klarna, Afterpay, Affirm, or simply retailers offering their own plan, BNPL allows consumers to make a purchase and receive it immediately while paying for it over time through a series of installments.
Some plans can come with interest and late fees, but some charge neither. Pricing and plan information varies from company to company.
Allowing a consumer to pay over time can dramatically alter the consumer landscape for marketers. It will give those with poor credit or lack of credit card funds an opportunity to purchase impulse products advertised to them. It also gives marketers a chance to close more sales at minimal risk.
Data shows that consumers buy more when they can pay over time. BNPL gives companies a much wider reach and the ability to expand their target audiences further.
A recent survey found that 1 in 5 U.S. consumers used a BNPL service in the 12 months ended Aug. 20, 2021, and only 1 in 6 of them regretted doing so.
While this is a boon for marketers with higher price point items, full disclosure of terms is mandatory. In December 2021, the Consumer Financial Protection Bureau announced an inquiry into BNPL, expressing concern about “debt accumulation, lack of regulation, and data harvesting.” The regulator is concerned that borrowers are accumulating too much debt and that consumers’ personal data could be misused.
Last month, the agency demanded information from a handful of the industry’s most prominent players, including Klarna and Afterpay.
This inquiry notwithstanding, the BNPL option has opened up an excellent opportunity for higher price point items and allows credit-challenged consumers to have an equal playing field for products that otherwise may have been out of reach.
So why are advertising spends in traditional TV growing instead of shrinking? And why is Amazon, Google, Netflix, Facebook, and Microsoft growing their spends on TV? In fact, some of them are spending more than 50% of their ad budgets on TV!
The answer? TV is engaging, entertaining, and informative. And TV is still mass. Getting your brand out there on TV produces a power like no other. And TV has a halo effect for all other media. 
Spend away on Amazon, Facebook, Google, but if you are not on TV, you will miss a big opportunity to share your story, and connect with your audience using real emotion, which is hard to beat in other media. Also, good luck slugging it out with those increasing digital spends and the click fraud, bots and crazy attribution mazes.
The infomercial and DRTV approach may seem old fashioned to some, but for products or services that require explanation, demonstration or emotion, there is nothing better than television to get that point across. Whether it is a: 30 brand message or a half hour infomercial, the power of television is not going anywhere. Just ask Amazon, who spent more money on TV in 2016 than Wal-Mart.