Making shopping smoooth (yes, 3 o’s), Klarna helps you buy the things you love today, while paying over a time period which works best for you. Continuing with our partner Q&A series, we spoke to Rob Beattie, part of Klarna’s UK Partnerships team. We wanted to learn more on how this payment provider is helping brands stay agile by creating flexible, effortless and safe shopping experiences with their customers during the current crisis.
What impact has COVID-19 had on eCommerce in recent months?
It has clearly been an extremely challenging time for everyone. After the first few weeks of crisis management mode and working out how to operate safely, a lot of retailers, brands and vendors have gotten into the swing of a new way of working. For many, it has been a wakeup call and has rapidly accelerated their move to digital, but there’s still a long way to go for those who have traditionally relied on their physical stores.
We recently published some analysis comparing consumer spending trends for the month prior to lockdown versus the month since lockdown. We also looked at how the relative share of spend in certain categories and age groups evolved on a week by week basis.
It comes as no surprise to see that the home and garden sectors are doing particularly well. In the under 25 age group, there was an uplift of over 250 percent. That same age group also saw an increase of over 80 percent in the health and beauty space between 9th March and 20th April. We found that millennials spent the first few weeks of March preparing for lockdown by investing in the leisure, sport and hobby categories and we’ve also seen a big shift in spending towards home and garden in this age group too. To be honest, home and garden has been popular across the board, with the 41 to 55 age group increasing spend by over 150 percent. Clothing and shoes also saw a peak in early March, but since then, the percentage of overall spending on fashion has decreased.
Why do you think flexibility is key in times of uncertainty?
Agility and flexibility are essential for brands and COVID has really proven that. Businesses are being forced into understanding the market and quickly adapting to the changing needs and demands of their consumers. Sadly, there are some businesses who will have already been in trouble prior and COVID could be the final nail in the coffin. But those businesses who have been agile and flexible enough to move with these changing demands are going to be the ones who experience growth, or at least set themselves up for success as we start to come out of this.
We’ve worked with businesses who have traditionally relied on bricks-and-mortar and have very quickly pivoted to selling online. There have also been many smaller businesses who have had to start selling online for the first time and are even having to use their physical stores as warehouses, which will be an operational challenge in itself. We’re also seeing bigger retailers accelerating their digital transformation programmes, whether it be replatforming projects or looking at ways to improve their online experience and offering.
Whatever happens after this, consumers have become used to purchasing online, so eCommerce needs to be part of a long-term strategy for brands and retailers.
How is Klarna helping brands and their consumers be flexible?
Klarna is a great way of enhancing the customer experience and shopping journey, not just online, but in-store as well. Payment methods including Pay later in 30 and interest free instalments help brands boost their sales, increase average order value and give the end consumer more control and flexibility with their purchasing.
This is really important for consumers right now as many may be reluctant to spend. Giving them back the control and providing payment flexibility helps to create a frictionless shopping experience on both sides. Pre-built and simple integrations into eCommerce platforms such as Magento easily allows merchants to offer Klarna to their customers. With over 8 million Klarna users in the UK, it also provides retailers and brands an opportunity to engage with consumers they may not already be talking to.
What are the most common questions you’re being asked by merchants?
The challenges are different for every brand. For example, for those businesses selling products that aren’t in huge demand, how do they still connect and engage with their customers? And for those brands experiencing the sort of volume they typically see at Christmas or Black Friday, how do they cope with fulfillment and supply chain? Many challenges and concerns, but also opportunities, have been presented from the crisis.
Operational issues and being able to trade while keeping staff safe have been some of the hardest challenges for many businesses we work with. With retail stores opening again from mid-June, the next big hurdle is how they can get their staff and their customers comfortable in-store. Utilising payment methods such as Klarna in-store, where consumers can complete purchases on their mobile phone while social distancing can help this. Again, flexibility and agility will be key.
If you want to find out more about our partner Klarna, and how this platform could help you in providing control, flexibility and trust to your customers, get in touch with Team Pinpoint today. Or, take a look at our work with Regis and iCandy to see how we integrated Klarna with their online stores.