There is so much coming out of Klarna that it's a bit hard to keep up. This year alone, the company has announced a major rebrand that transformed its position as a B2B payments company to a feature-packed shopping destination. Then came the release of an array of sustainability-related features like a CO2 emissions tracker and sustainability certification filters for the products and brands on its app. And now, the company has released an array of new features – and is increasing the footprint of some old ones – that pad out its product offering across all stages of the buying cycle.
The new features
Continuing its focus on leveraging AI for enhancing customer experience, Klarna has released a new image-search feature called Shopping Lens, which will allow consumers to take pictures of styles and products they like and find out where to buy them. The feature can currently identify more than 10 million items across product categories like electronics, apparel and home decor, and matches these products to the 50 million store offers available in the app. Through this, consumers can compare retailers, prices and customer reviews of the products they snapped pictures of. This is product discovery and research packed into one UX flow.
The app is also rolling out its shoppable videos feature for customers in Germany, the UK, and Sweden. Shoppable videos first launched in the US in 2022, and the company reports that the feature has led to an increase of 60% in average viewing time and 25% in click through rates.
Both of these features focus on product discovery away from the store, but Klarna isn't letting go of in-store opportunities. The company is also rolling out barcode scanning functionality, which will allow customers to quickly view variants of a product and its custom reviews while they are perusing products in their favorite shop. This feature serves two useful purposes for the company. First, it enhances the in-store shopping experience by making Klarna a research destination for in-person purchases. And second, it provides an off-ramp into the app’s digital shopping experience which may seem more alluring given that the app is also introducing a cashback program. The cashback program is only available in the UK at the moment but other markets are “in the pipeline”, the company reports.
Since the Shopping Lens feature depends upon customers sending in pictures from their daily lives to Klarna’s algorithms, it can raise questions around privacy, data protection, and informed consent. Saying that the consumer’s digital wellbeing is top of mind, a spokesperson from the company adds, “Klarna does not store these images for any period of time. We also provide clear guidelines to consumers that any images including readily identifiable personal information (including faces) will not be processed”.
Beyond product discovery and research, the company has also launched purchase protection, which is an addition to the post-purchase experience. Already, Klarna’s resell feature taps into circularity and offers consumers a reason to come back after the purchase. But now that customers can insure their products, they are more likely to stick with the app in the days immediately following delivery. The insurance functionality also allows Klarna to compete with shopping platforms like Best Buy and Amazon, which offer extended warranties on products like electronics that consumers can buy as an add on.
Klarna’s digital shopping journeys are all about the experience. There are no clunky yellow buttons and bad product photos to be found here. More than 14 million Gen Zers shop on the app, which has taken its lead from beloved social media apps like TikTok to create an experience that blends shopping with habitual scrolling and influencer-made content.
The Gen Z-forward positioning is also panning out well for the company. This year, the company’s GMV increased by 14% YoY in Q2 of 2023, even though global ecommerce remained mostly flat.
"Some claimed Klarna would face difficulties in the tough macro-economic climate with high interest rates, but having led the company through the 2008 financial crisis I knew we had a strong and resilient business model to see us through. Despite the volatile environment, we have done exactly what we set out to do,” said Sebastian Siemiatkowski, CEO of Klarna in the company’s H1 earnings results.