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Klarna responds to online shopping pain points

Mobile shopping is now the 10th largest ecommerce market by revenue and is expected to reach $35.2 billion by 2021, with 72.9% of all shopping worldwide to be done on mobile.

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However, only 12% of consumers find shopping on mobile devices convenient and almost 6 in 10 Australians (57%) are likely to abandon their carts more often than shoppers in Europe (41%) and North America (47%) with two-thirds browsing for fun with no intention of buying, according to a recent PayPal mcommerce Trends Report.

Further, research from Statista has found three key pain points among consumers which often lead to abandoned shopping carts. The first is limited payment options with 56% of shoppers saying they would buy more if there were more payment options available. The second is lengthy checkouts with 75% of shoppers stating that the speed of checkout is one of the most important shopping factors. The third is poorly designed mobile sites with 73% opting for mobile sites that make purchasing easier.

This is where Swedish fintech company, Klarna comes in.

After launching into the Australian market with its Klarna shopping app earlier this month, Retailbiz spoke to general manager for Australia and New Zealand, Francine Ereira.

With the ability for customers to Pay in 4 equal instalments with no interest or fees when they pay on time, Klarna joins the likes of buy-now-pay-later (BNPL) offerings Afterpay and Zip, in which many would describe as an already crowded market, but Ereira says there is no experience like Klarna’s in Australia.

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“Many may see us as a late entrant to the BNPL market but the reality is that only 10% of Australian consumers currently transact with BNPL and we are the only company to offer our service with any online retailer which hasn’t been done before,” she said.

“BNPL is often considered a transactional relationship but with Klarna, it is more immersive and personal and makes shopping a whole lot easier. Consumers are now more open to sharing their desires, their needs and their wants and using Klarna, they can create wish lists, receive price drop notifications and access exclusive deals and discounts. We offer a seamless and convenient one-stop-shop that responds to consumer insights.”

Klarna has signed on Appliances Online as its first Australian retail partner and Ereira said founder, John Winning is renowned for supporting new technology and making shopping easier for consumers.

“John knew of Klarna from his global retail visits and our mutual partnership is based on an understanding of core market challenges and solving them together. We both make data driven decisions from a global lens,” she said.

Klarna is also in discussions with Australia Post which intends to make its Pay in 4 solution available to its SecurePay ecommerce merchants by mid-year.

Klarna has two key priorities in 2020 – to build and gather retailers and to create brand equity.

“We want to bring all Australian retailers on board and have Klarna on all of their websites. We need to build brand awareness that we are not just a pure payment provider but a global ecosystem. We want to drive traffic in-store and help retailers upsell and cross-sell,” Ereira said.

Despite the growing popularity of online shopping, Ereira acknowledges that most purchases are still done in store because there is “work to be done” on the online front, particularly in the area of returns.

“No doubt online shopping will continue to grow but we are tactile human beings and enjoy the ‘touch and feel’ aspect of bricks-and-mortar shopping so physical retail stores aren’t going anywhere. But in saying that, shopping centres do need to rethink their strategy to meet changing customer demands, including offering more payment method options.

“In order to be successful in today’s changing retail landscape, we need to be nimble and deliver on consumer needs.”

Last week, Klarna launched its Get What You Love campaign, calling on everyone to express themselves with who, or what, they truly love. With 2020 being a leap year, there is a tradition that dictates it is the only ‘acceptable’ time for women to propose to their partner on February 29.

In conjunction with Klarna, fashion activist and celebrity stylist, Bea Åkerlund has designed a pair of limited-edition rings – the Knight Finger and Unification – empowering people to propose when and how they want.

For more than two decades, Akerlund’s instantly recognisable aesthetic has been reflected in some of the world’s biggest commercials, live concerts and music videos, in magazine editorials and on the red carpet. With clients including Lady Gaga and Beyoncé to Britney Spears, Madonna, Fergie and Katy Perry, her work has attracted the attention of Vogue and New York Times – even her homewares range for Ikea garnered global coverage.

Pop phenomenon Lady Gaga has put a ring on her own finger to celebrate that we are all free to propose to anyone at any time. She responded to Klarna’s message of empowerment by saying ‘yes’ to herself with her 180 million followers on social media as witness.

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