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What are the actual benefits that Klarna offers to merchants beyond just increasing conversion rates?


Former Klarna merchant partner

It's no doubt that they improve conversion rates, I think the question is at what costs.

Typically, let's say heading into a wedding season. So the beginning of summer, let's say someone will go to four weddings, which means potential for 10, 12 outfits that they might be buying. Now that's a pretty big outlay.

If you are 26 or 27, the idea being that if you've got a basket of $280 to $380 and you can split that over four payments, as your salary comes in, probably is quite appealing. I suspect that the conversion rate does go up and I think that's what Klarna is all about.

Now, if you look at what they're trying to do themselves as a company, they're trying to build up their relationship with the customer a lot more. So they've got their own app, which they're trying to encourage people to go and purchase through. I think that's because they want to have a relationship directly with the customer.

Secondly, they want to have some of that first-party data. I suspect a lot of that is probably held back from them. They probably know a bit about you in terms of your creditworthiness, but they are looking to learn about your shopping habits.

At the moment it's really about conversion. I think with Klarna, they need that first-mover advantage.

So they need to be the first at ASOS, the first at H&M etc. You keep seeing the name over and over again, and then you trust them more than someone else.

Find this answer in Former Klarna merchant partner on why retailers sign up with Klarna
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