Market Overview

Americans Are Planning to Spend Less on Fashion This Fall; Many Are Embracing Alternatives to Cash or Credit Cards

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Affirm research shows consumers are being more mindful of their
wallets this fall and are avoiding credit cards at checkout; "Shop with
Affirm" campaign highlights retailers offering no-interest, 3-month
payment options for fashion and apparel

Affirm, Inc., the company founded by entrepreneur Max Levchin to provide
fair and honest alternatives to traditional credit, today announced the
"Shop with Affirm" fall fashion campaign and released the findings of a
new survey revealing how Americans plan to shop and pay for apparel
purchases this fall.

Starting in September, Affirm will feature fashion and apparel brands
that partner with Affirm across Instagram and Affirm.com, showing
consumers where they can buy now and pay for purchases over time with
Affirm. Many fashion brands now give customers the option to use Affirm
to buy items with no interest, repaid in three easy monthly installments.

The campaign was designed to make great brands accessible to more
customers, offering a transparent payment option that better aligns with
shoppers' cash flows and helps them budget for fall purchases. Affirm
partners with a wide array of fashion retailers, from apparel to jewelry
to cosmetics, including Pat McGrath, Paul Evans, Swatch, Unique Vintage,
White + Warren, Tamara Mellon, Tradesy, Longines, GOAT, Flight Club,
Jomashop, Good American, and John Hardy.

Affirm recently conducted a survey of over 2,000 U.S. respondents and
found that while Americans want to keep up with new trends, they're
planning to be more mindful of their spending this fall. Shoppers are
doing their research to ensure they're getting the best deals, are
looking for better ways to pay, and want to support brands that reflect
their values.

Consumers are spending less and doing their research before they shop.

Affirm's survey revealed that 77 percent of Americans are planning to
purchase clothing, shoes or accessories this fall, with just over half
of those shoppers saying they plan to stock up on "everyday" apparel
items (53 percent).

However, a number of Americans are focused on budgeting. Twenty-five
percent of shoppers are planning to spend less this year than in
previous years because they are prioritizing savings and say it's
because they make less than they did last year. Over half of shoppers
plan to spend $300 or less and 58 percent of Americans are planning to
shop when they can take advantage of special promotions and sales.

There is a resurgence of Americans shopping in-store, but they're
prioritizing at transparent and sustainable brands.

When it comes to where Americans are shopping this fall, 51 percent of
consumers still prefer to visit brick-and-mortar stores compared to 20
percent who plan to shop online. There's also an emphasis on shopping
locally in-store, with 79 percent of respondents saying it's important
to them to try to support neighborhood brick-and-mortar stores.

While "big box" and department stores are the primary locations
Americans will shop at this fall, many believe it's important to support
transparent and sustainable brands – and they're willing to pay more to
do it. Sixty-two percent of Americans say it's important the product
they purchase is sustainable and 77 percent will pay more for
sustainable items. Seventy-four percent say it's important the product
is ethically made and the same number will pay more for these products.

Americans want more flexible payment options to help them budget.

What may be surprising to most people is that 70 percent of shoppers are
avoiding credit cards at checkout – and they aren't just consumers with
lower income levels or credits scores. Across all levels of income and
FICO, consumers are increasingly looking for flexible payment options to
meet their individual needs.

Forty-one percent of Americans have previously used an installment loan
to pay for a purchase and 38 percent of shoppers say they would consider
purchasing a full price item if they could spread the cost out over time
with no interest – many preferring this option over paying for a
discounted item in full at checkout (18 percent).

What's more, nearly half of consumers would prefer an installment loan
for purchases under $250 and say they seek these products out to:

  • Help them budget (29 percent);
  • Free up cash flow (18 percent); and
  • Spread out the cost of a larger purchase (17 percent).

"Consumers need to buy clothes seasonally, whether it's for changing
weather, celebrations or back to school," said Max Levchin, Founder and
CEO at Affirm, Inc. "We want to give them a way to do it that is
completely and transparently in their best interests. Shoppers shouldn't
just love what they buy, they should love how they buy."

About the Survey

The online survey was conducted by Qualtrics from August 14 to August
17, 2018, among a demographically representative sample of 2,028
Americans aged 18 to 72.

About Affirm

Affirm was founded with a goal to create honest financial products and
services that empower consumers and improve lives. Our goal is to
revolutionize the banking industry to be more accountable and accessible
to consumers. Today, Affirm provides millions of shoppers an alternative
to traditional credit cards at the point of sale, giving them the
flexibility to buy now and make simple monthly payments for their
purchases. Unlike payment options that have compounding interest and
unexpected costs, Affirm shows customers upfront exactly what they'll
pay each month — with no hidden fees and no surprises. Affirm partners
with over 1,000 merchants including fashion and beauty retailers like
Tamara Mellon, Botkier, GOAT, Flight Club, GREATS, The RealReal, Tradesy
and Pat McGrath Labs, giving shoppers the option to pay with Affirm at
checkout.

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