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Payments, Pandemic, Progress | Q&A with Klarna
Launching only a year ago, Klarna has been well-positioned to take on the online adoption as a result of the pandemic. We sat down with Fran Ereira, Country Head, Australia & NZ, to discuss the change in customer behaviour, online adoption and the future of BNPL in Australia.
The pandemic proved that e-commerce is an essential tool for consumers and businesses in the modern age. How did the uplift in e-commerce sales impact Klarna?
The pandemic hit just a couple of weeks after we launched in Australia, so for a short period, it actually prevented us using the momentum of our launch to grow our brand. However, it also pushed a lot of people online and this was a big benefit. Klarna’s app offers a really engaging, immersive experience for shoppers, and we saw them spending a long time in our app getting inspiration, making and sharing wishlists.
All this means that once our marketing resumed – with a couple of really innovative and eye-catching campaigns – we saw massive jumps in the numbers of consumers using Klarna and the volumes we are processing.
As Aussies realise the potential of e-commerce over the pandemic, there has been a flurry of new customers entering the e-commerce landscape. Has Klarna seen a change in customer behaviour, and how has it impacted its strategy going forward?
Klarna was incredibly well-positioned to respond to changing consumer behaviour because our CEO had already taken a very deliberate – and brave – strategic decision to radically shift Klarna away from being just another boring payment provider. We have mindfully transformed ourselves into a full shopping ecosystem that elevates the shopping experience for the most avid shoppers.
So when consumers were forced online, we were there waiting for them with open arms and with the features they wanted, all in the one place. They didn’t need to have multiple browser windows and checkouts open any more. They didn’t need to spend hours searching across different platforms. Klarna is the one-stop-shop where the keenest shoppers get information, inspiration, convenience, perks and value for the brands they want to explore.
Klarna has spent one year in Australia – what has been the biggest achievement so far?
On top of the list is the amazing response we’ve had from some of Australia’s most successful retail brands, like the Country Road Group, Cotton On Group, Hanes Group, including Bonds and Sheridan. We’ve also welcomed Adore Beauty, Surfstitch, Peters of Kensington, Luxury Escapes and General Pants.
In addition, we’ve been able to build a loyal and highly engaged customer base of well over half a million customers in the strangest year in recent memory. We’ve also forced our competitors to respond to our ‘shop everywhere’ offering and shaken a few of them out of cosy complacency! Our campaigns have been disruptive and encouraged customers to really engage and immerse themselves in our world – for example, the K-rated QR code campaign, that allowed consumers to unlock access to great products and prizes.
What do you believe are the biggest challenges for Australian e-commerce businesses right now, and what could be done to address these? What are the biggest opportunities?
The challenges retailers speak about change depending on their size, vertical and channel, however, the themes that consistently come up are improving digital UX, driving greater loyalty, the cost of fulfilment and accessing better customer insights. They want to partner with organisations that can deliver greater value back to them and give them the edge in these areas.
Looking back at the year 2020, what do you think the biggest lesson that BNPL providers learned, and how will it impact the future for Klarna?
To me, the experience of 2020 confirmed the importance of building deeper, long-lasting partnerships with retailers that go far beyond a transactional, commercial relationship. Sadly, the overwhelming sentiment we hear from retailers is that they feel left alone and neglected by their current BNPL solutions. Finding a position where both parties benefit and support each other through good times and challenging ones is a far more sustainable base to build successful businesses. From our perspective, we are sharply focused on this partnership approach and making sure our retailers can grow their businesses as we grow ours.
What do you think the future of BNPL and e-commerce in Australia looks like?
I think the future for ecommerce is super exciting. You’d be hard-pressed to find a retailer in Australia that is not firmly focused on eCommerce, digital experience and ensuring their customers remain loyal. This coupled with new technology like bringing fitting rooms to life online, enhanced click and collect will ensure retailers remain relevant and connected to their customers.
On the BNPL front, there are lots of players as you know. I think consumers will largely dictate what happens this year – they are savvy and know what they want!
What does Klarna have in store for the future?
Being a company who is truly obsessed with listening to our customers (consumers & merchants) and continually iterating, developing and delivering off the back of the feedback and learnings, we’ve got a long list. There are some very exciting developments coming for Klarna’s rewards club, including even more flexibility for members and a very exciting partnership with a major player we’ll be announcing in the near future. We’ll be adding more functionality and features to our app, launching in New Zealand and continuing to put ourselves out there with disruptive, innovative and immersive campaigns that splash our pink everywhere and have that uniquely Klarna twist. In the next couple of weeks, we’ll be bringing our engaged consumers to over 100 new retailers and we’ll continue working tirelessly to become the world’s favourite way to shop.