Klarna bets on fashion

Klarna consolidates its presence in Italy and continues to strengthen its ties with the fashion and luxury sector. Exactly two years after entering the Italian market, the global banking, payment, and shopping services company’s numbers in the country are growing, and management is ready to sign new partnerships, especially in fashion. «When Klarna landed in Italy in october 2020, the market was witnessing an evolution in consumer habits that put brands in front of increasingly demanding customers also in terms of shopping experience» Luigi Traldi, the new country manager for Italy, explained to MFF in the first interview since his appointment. «We have been able to develop flexible solutions capable of offering consumers transparent and smart shopping services that would save time and money while maintaining visibility and control over their finances».

What is the balance two years after landing in the Italian market?

Our goal has always been to support this transformation in the way people shop, elevating the shopping experience for both consumers and brands. The results achieved in these two years demonstrate our success and mark important milestones for Klarna, for which Italy represents a key market. In fact, the Milan headquarters host one of our tech hubs, which contributes to the development of new global solutions.

Have you achieved all the goals you had set then?

The path in our country is positive and constantly growing, to the extent that in the last nine months we have even doubled the number of users, which now stands at 2 million. In addition, we have surpassed 10,000 Italian and international brand partners, in the most diverse sectors, offering Klarna in our market. Then there are 2,000 physical stores in Italy that have already integrated Klarna among their payment methods.

And now on what aspects will the strategy be focused on the short to medium term?

We do not set ourselves any limits for the future. The ambition is for Klarna to be able to accompany all Italians during their purchases, so we will continue to support merchants as growth partners by providing them with the most strategic tools to target their audience and realize a true competitive advantage. Our priority remains to help consumers save time, money, and worry less about their finances by supporting brands every day with solutions developed to accompany every stage of the customer journey. To do this, it is necessary to look beyond just payments, broadening the horizon to the entire purchasing process.

How has the domestic market evolved over the past two years?

The pandemic has given a strong boost to e-commerce by accelerating changes that were already underway. A recent report we developed together with Casaleggio associati showed that in Italy at least 3.5 million new users have started buying online since early 2020. However, today we are also witnessing a rediscovery of physical stores after the forced stop due to the pandemic and the emergence of new trends in which online and physical shopping are not mutually exclusive, but go hand in hand, improving each other.

And in this context, how has the customer changed?

Consumers have shifted from traditional forms of credit to more flexible and sustainable payment options, confronting brands with the need to renew their approach. In addition, user expectations have also grown, underscoring the importance of offering truly seamless and transparent shopping experiences. Our data reveal that consumers are looking for the same level of assistance as physical stores even when shopping online, with personalized services through augmented and virtual reality, or suggestions about the products themselves to be received via app or website. Similarly, the same fluidity typical of online shopping is expected from the in-store shopping experience, to be found as much in cashless payments as in the ability to manage purchase and payment flexibly. Mobile shopping is also gaining ground, with 58% of Italians now buying via smartphone more often than two years ago.

How is fashion experiencing this revolution?

Live streaming shopping, for example, will be increasingly common. Also consider that in Italy nine fashion lovers out of ten welcome the industry's landing in the metaverse. In general, for Klarna, fashion has always been one of the strategic sectors, especially here in Italy. More than half of our brand partners in Italian territory belong to this cluster, and we are working to forge new partnerships with prestigious brands from the luxury and fashion scene. In fact, alongside the strengthening of services, our expansion plans include onboarding new merchants with whom to continue our path in the sector.

What are your forecasts for Italian consumption in light of the current situation, including inflation and high energy prices? Do you expect an increase in installment payments? Or a contraction in transactions?

In Italy today, e-commerce is registering significant volumes, with an average per capita spending of 1,200-1,300 euros per year. These are numbers that show consumers are still active and pave the way for positive growth margins for brands. Rather than a contraction in transactions, the current historical context may lead to a progressive change in payment habits, considering the need to manage one's financial means differently. In a framework in which consumers will remain stable, it will therefore be the opportunities to use flexible payment solutions that will increase, with options such as «buy now pay later» continuing to spread and expand their user base. (All rights reserved)

Clothing and footwear drive Black Friday purchases

Ahead of the upcoming Black friday and Cyber monday, Klarna conducted research involving more than 1,000 consumers in Italy. The results, unveiled in advance to MFF, show that more than seven Italians out of ten (76%) think they will shop for the occasion, and 23% can already say with certainty that they will buy something, especially Gen Z (39%) and Millennials (27%). Among the product categories most purchased on this occasion are clothing and footwear (40%) and beauty (28%). This year, Italians who will buy online will do so to try to buy most Christmas gifts during Black friday, especially among Gen Z (91%) and Millennials (90%) and will wait for this week of deals to buy the most expensive items. In terms of payment, 83% of users in Italy find it useful to be able to split payments equally without interest. Moreover, in Italy, «buy now pay later» still has significant room for growth, so much so that it has almost caught up with credit cards (35% vs. 36%). This is an evolving path, if one considers the global average where 25% of respondents were in favor of credit cards and as many as 46% would choose to defer payments instead. Indeed, Italy is the only country among the other 17 surveyed in Klarna's study in which preference for «buy now pay later» still does not exceed that for credit cards. (All rights reserved)