Buy Now, Pay Later platform Klarna have become the latest BNPL provider to partner with online fashion retailer THE ICONIC, in a partnership Klarna ANZ Marketing Director Katrina Ang describes as “exciting”.
The fresh partnership for Klarna comes at an interesting time for BNPL platforms and providers, with the payment method viewed as seeing increased usage and demand from consumers as ongoing economic turbulence and high levels of the cost of living continue to particularly eat away at consumers’ discretionary spend capabilities.
At the same time, Australia’s Federal Government has indicated its plans to implement reform in the area of BNPL, with regulations to treat the payment method as credit expected to be introduced by mid next year.
“We have seen rapid growth and adoption of BNPL by both consumers and retailers over the last five years. We can expect the sector’s key players to continue to innovate, bringing new service offerings into the market to remain competitive and relevant,” Klarna’s Ang tells Power Retail, “On the regulatory front, reform is in the works, with the Federal Government having already announced that it is looking to regulate BNPL as credit. However, the precise nature of the additional regulation and the way in which this will be achieved is still yet to be determined.”
Nonetheless, Ang suggests that Klarna is already looking at ways for it to adapt to the challenges of the existing economic climate and predicted struggles of the months ahead, seeking to find new ways to offer support to consumers through an array of new offerings for its customers.
“As we look to the future, we anticipate there will be some challenging times ahead for both consumers and retailers. Across Australian households we’ll see a bigger focus on budget management and cash flow, and an increased importance on stretching the dollar further,” Ang says, “That’s why we’re continuing to look at how our product and services can support, including the Klarna app to help set-up monthly budgets, flexible payment schedules, accessing deals and gathering spending insights.”
These adaptive changes are a large part of what allows Klarna to stand out as a BNPL provider amidst an increasingly crowded and competitive market, Ang outlines, as it has sought to consistently make technological advancements to stay front of mind for consumers and retailers alike.
“Our shopping ecosystem is powered by cutting edge technology and ongoing investments in creating a superior experience for our customers and retailers. This includes for instance, the launch of Virtual Shopping, where we connect online shoppers with in-store experts for advice and inspiration via messaging and video calling,” says Ang, “This ensures that customers can really engage with an item from point of interest to purchase with increased confidence.”
Klarna is also continuing to celebrate its successful acquisition of mobile wallet provider Stocard, as it seeks to encourage brand loyalty in its customers. As Ang outlines, “With the app, shoppers can keep all their reward cards in one place, collect rewards at checkout, get notified about new offers based on their actual interests and preferences, and plan their shopping trips.”
It hasn’t been all smooth sailing for Klarna in recent months, however, with the global brand’s market value having seen a steep decline from more than US$45 billion in mid-2021 to only US$6.7 billion in June of this year. Overall, the Swedish-born fintech provider reported losses in late August of more than US$580 million in the first half of 2022.
The degradation of fortune for Klarna appears to have done little to discourage online retailers from embracing partnerships with the fintech provider, however, as its latest partnership between online fashion retailer THE ICONIC appears to attest.
“We’re thrilled to partner with Klarna to provide customers with more ways to pay,” THE ICONIC Chief Customer Officer Dean Chadwick said in a statement, “As a customer obsessed retailer, we’re looking forward to seeing shoppers take advantage of this like-minded, convenient-driven platform.”
The enthusiasm for the new partnership is shared by Klarna, with Ang distinctly jubilant in celebrating the deal.
“THE ICONIC is one of the country’s biggest retailers and it’s so exciting to join forces with a brand that shares the same values when it comes to understanding and catering to the ever-evolving needs of the Australian shopper,” Ang tells Power Retail, “This year has seen a sharper focus on raising the bar on customer expectations and experiences when it comes to shopping online, so it made perfect sense to come together and give shoppers more diversity and control at their fingertips than ever before.”
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