How Klarna’s evolving to become more of a shopping destination with app redesign

  • Klarna recently unveiled a redesign of its app which added features like "Ask Klarna" and TikTok inspired recommendation feed and resell option.
  • The redesign represents a shift in strategy for the firm that is moving toward building itself as a shopping destination.

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How Klarna’s evolving to become more of a shopping destination with app redesign

Not long ago, Klarna was best known for its B2B work in the payments industry. Klarna’s Chief Commercial Officer David Sykes told Tearsheet in 2021 that the basic user experience at the time relied on consumers discovering Klarna as a payment option first on their favorite online shops. But things have shifted since then and now consumers are using the Klarna app to directly discover products and brands. 

This shift from a purely B2B model towards a more consumer-facing presence is reflected in the company’s most recent app redesign. Launched in April, the redesign added features like “Ask Klarna'', where customers can talk to fashion experts about their future purchases. It also introduced a recommendation feed like the one found on TikTok, as well as reselling options to the app. “At some point, last year, we decided we wanted to hone in on our vision of becoming the shopping destination for customers. And we needed to reflect that now in our app as well,” said Klarna’s group product manager, Karoline Bliemegger. 

The UX strategy

Picture showing a crowded landing page that shows multiple actions like looking purchases, saved items etc first.
Klarna app's old design, Source: Klarna
Pictures of the redesign that focuses on the recommendation feed with separate cards for each product.
The Klarna app after the redesign, Source: Klarna

As part of its broader consumer-focused strategy, Klarna’s UX is designed to capture the entire shopping experience. For example, features like the recommendation and product discovery feed motivate purchases, and resell makes sure customers stick with the app even after an initial transaction. 

Algorithm-driven shopping and Ask Klarna: There are two ways a shopping journey can begin online.  Either the customer has a rough idea of what she wants and searches online marketplaces for it or a product is recommended to them on an online channel. In countries like China, the recommendation path is much more dominant than search, according to David Sandstrom, Klarna’s chief marketing officer. This recommendation strategy is also better for conversions and converts customers earlier in the shopping journey. Which is why Klarna has introduced algorithm-driven shopping within its app, through the recommendation feed. With more data and time to learn, Bliemegger expects the algorithm to get better at personalizing recommendations, effectively cutting down on product discovery time. 

Similarly, Ask Klarna aids the product discovery and conversion stages. When customers connect with agents on the app via chat or video call, they can get advice and information on the products they want to buy. “These are people who are experts in their verticals. So it could be someone who is very niche. It could also be someone who has a lot of like following or also experts from the store angle” said Bliemegger.

Reselling: The resell options allow customers to sell pre-owned items through third-party marketplaces. When redirected to a reseller’s website, the details of the product are already filled in, cutting down on the cognitive effort it would take to list an item on sale. “I can easily resell here – it just makes the whole decision process a lot easier. Because one of the hurdles is always “how do I actually get it out, take all the pictures, and price information?” We take care of that,” she added. 

One of the guiding principles of the redesign was consolidation of the Klarna app’s various functions. “The landing page had a lot of entry points. But sometimes when we talked to our customers they said it was hard to navigate, because there were so many things. It was like a remote control with a thousand buttons on there, and you don't really know what you should do first,” said Bliemegger, adding that this feedback motivated how the new design looks. 

Overall, the redesign took the company four to five months and the Klarna team tested iterations through third-party user testing providers, as well as a subset of its own users. Feedback was positive. “The interaction rates are way better than with the old feed just because it is personalized to customers,” she added. 

Beyond personalization, features like Ask Klarna and the recommendation feed also enable better synergy with Klarna’s work with influencers and affiliates. The app provides “Creator Shops” where influencers and affiliates can create their own storefronts and display the brands and products that they work with. Since the company is focused on improving the tools available to influencers and affiliates on its platforms, there is an added incentive for content creators to work with Klarna. This influencer-focused strategy is very Gen Z friendly but also does some heavy lifting for brands that are working with influencers as part of their marketing strategy. 

Going forward, Bliemegger expects that further changes to the app will be more focused on improvements. So, less overhauling and more refining. “It's not going to be a heavy change in, like, two years from now. Because that's not what you should do from a product perspective,” Bliemegger added.

Tearsheet Take

Stories of a B2C fintech business shifting its focus to B2B are fairly standard. The opposite is far less common, though. Although Klarna has moved in a more consumer-facing direction, competitor Affirm also offers in-app shopping. The trend here seems to be that embedded finance companies like Affirm and Klarna are becoming, well, more than just embedded. It is likely that the time that these brands spent on building recognition through retailers’ websites has grown their consumer bases enough to favor such moves. Klarna’s strategy seems to be building its reputation with consumers and using that to strengthen its relationships with brands.

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