Customers Demand Deferred Payment Option, Says John Lewis CEO

John Lewis Partnership’s CEO, Nish Kankiwala, has unveiled plans to introduce buy-now-pay-later (BNPL) options to the retailer’s offering, in response to growing customer demand for flexible payment methods. In an exclusive interview with The Mail on Sunday, Kankiwala stated, “I think we will develop a buy-now-pay-later product. Especially in the younger generation, people expect it.”

The decision to incorporate BNPL services into John Lewis, a store chain known for its middle-class appeal, would represent a significant milestone for the industry, which has seen substantial growth in recent years. Approximately 9 million Britons utilized BNPL services last year, allowing them to make interest-free installment payments over a three-month period.

However, BNPL has faced criticism for potentially enabling debt accumulation, as it predominantly attracts female consumers and is commonly used for fashion purchases, with an average transaction value of £80. Despite its popularity, the industry faces skepticism regarding its responsible lending practices.

While BNPL options have gained popularity among younger shoppers, it has also caught on with older age groups. The average customer age at Klarna, the leading BNPL provider, is 36, and the fastest-growing age group is 58 and above.

Currently, John Lewis offers its own version of BNPL, limited to higher-priced home and nursery items over £500. Unlike many other major retailers, John Lewis customers cannot opt to use popular BNPL services like Klarna, Clearpay, or Laybuy.

While full-scale BNPL implementation is not imminent, John Lewis has plans to introduce an interest-bearing credit option for online purchases of electrical goods, charging a rate of 16.9%. This offering will later be extended to furniture and in-store purchases. Under the leadership of Chairman Dame Sharon White, John Lewis aims to invest £100 million in expanding its financial services business over the next five years.

Critics may express concerns about John Lewis embracing BNPL, potentially fueling societal acceptance of the practice. While the industry awaits regulation from the Treasury, John Lewis is positioning itself to meet evolving customer preferences.