You’d have to have been living under a rock to have missed the recent growth of ‘buy now pay later’ and the opportunities for Australian retailers during a time of major change.
Well, there’s an interesting new kid on the block in this rapidly growing space that takes great pride in looking, feeling and being different. They’re bright pink, their marketing materials look like they’re from a world between dreaming and waking – and they’re on a mission to deliver for Australian retailers.
We’re talking about Klarna. While they’re new to Australia, they are backed by 15 years of successful growth in 17 markets around the world, and they’re partnered with the Commonwealth Bank of Australia.
Here are three meaningful points of difference they offer that make them worth considering as part of your business strategy even during these challenging times.
- Brings truly engaged customers straight to you
Klarna has taken a deliberate strategic decision to be more than just another transaction-focused payment platform. Instead, it aims to provide its 85 million customers around the world with the ultimate shopping experience.
It wants its customers to be inspired, engaged and delighted by their experiences in the app, and then connect those customers with like-minded retailers.
The Klarna app allows shoppers to immerse themselves in their shopping experience. This includes viewing wish lists that have been created for them by Klarna, curate their own lists to share with their friends and family, or set deal notifications so they can keep track of products they are interested in.
The best news for retailers is that Klarna’s unique alert feature sends those customers directly to the retailer’s product page. This means delivering ‘warm leads’ who are ready to buy.
Importantly, this app is more than deals and discounts. In fact, Klarna’s product is an attractive alternative to discounting. The ability to pay a purchase back in 4 smaller instalments over time removes a significant barrier to purchase, making it more attractive and manageable to the consumer.
Klarna’s quirky brand constantly reaches out to, attracts and engages with new audiences – driving further traffic to merchants. In recent times they have collaborated with celebrities including Snoop Dogg and Lady Gaga, as well as great Aussie talent including Celeste Barber, comedy duo the Inspired Unemployed, singer Thandi Phoenix and hip-hop artist Tuka to create innovative brand campaign and video, Get What I Love. This campaign has already attracted well over 11 million views through Klarna’s social media and other digital channels.
When in the app, customers are further engaged by exclusive content from experts such as former magazine editor Kellie Hush and financial planner Canna Campbell. As a result, shoppers love Klarna, with research showing shoppers spend between 15 and 30 minutes in its app every session. The app supports customers through every step, before checkout, at checkout and after checkout.
Of course, building excellent customer relationships has another benefit; it helps drive acquisition, loyalty and retention for its retail partners, too. Experience in the US shows that the average order value (AOV) in the Klarna app is 48% higher than the average US ecommerce market AOV for mobile.
- Building meaningful partnerships with retailers
What further separates Klarna from other BNPL providers is its dedication to developing deeper, lasting, mutually beneficial commercial partnerships with retailers.
Klarna tries to connect with each new retailer to ensure your staff are trained and understand the product and ensure the integration makes your customer’s experience as “smoooth” as possible.
Partnering with Klarna helps retailers to reach and engage with more customers, by tapping into its ‘always on’ marketing model and marketing channels. As well as getting unique opportunities to engage with customers via the app, Klarna will collaborate on co-marketing campaigns to attract, activate and help to convert their fans into your fans.
For retailers looking for reach, Klarna’s relationship with joint-venture partner Commonwealth Bank of Australia offers big advantages. CBA’s 7 million digital customers have streamlined access to Klarna via their CBA app – 5.6 million of these customers are active daily.
Later this year, Klarna is taking a further step forward when it launches its world first BNPL loyalty program – Vibe. Vibe is truly unique among loyalty programs because it is specifically designed to add additional value to retailers’ existing loyalty programs, not distract from them!
This means that customers receive the double benefit of Klarna Vibe points on top of any points or benefits from your existing loyalty program. It protects the value of a retailer’s existing program, maintains its connection with their customers and offers them extra value with Klarna as a bonus!
- Doing the right thing
Klarna has been able to establish itself as a successful global business over 15 years because it genuinely seeks to do the right thing by customers and retailers.
Each and every customer using Klarna is credit checked prior to their first purchase to ensure the product is right for them and won’t lead to financial difficulty. Not every BNPL provider offers its customers this protection – but it is the right and most sustainable approach.
Finally, Klarna is committed to stepping up and supporting Australian retailers to grow during a time where our sector needs extra support. They continue to back the grassroots retail #WeWearAustralian campaign and are now proudly partnering with the National Retail Association to deliver research, data and strategic insights to give members a competitive edge. This support is also critical to enable the Klarna Young Retailer of the Year award.
This is the sort of far-sighted approach that will help us all as we work to secure a bright future for our industry.