After a difficult period for Klarna, laying off 10% of its global workforce and grappling with ongoing criticism of the BNPL model, the company is moving beyond financial services in a bid to become a one-stop-shop ecommerce app.
On Monday, the BNPL giant announced that it was launching a new feature on its app, enabling consumers to keep track of all their online purchases, not limited to those made via Klarna, with product images, prices, order and delivery status and parcel tracking information.
Customers simply connect their email to the Klarna app and the company scans the details from order confirmation emails, importing the data into the app.
In the increasingly cluttered and confusing landscape of online shopping apps, Klarna hopes the move will help UK consumers “save time and manage their online purchases more conveniently by automatically consolidating crucial purchase information in one place: the Klarna App.”
Amid a challenging backdrop for BNPL firms, Klarna is striving to expand its offering and add value for its customers.
But do shoppers really need an app to manage their online purchases and delivery? And will there be a backlash regarding data privacy?
What does Klarna want to achieve?
Paypr.work founder Sandra Mianda tells Charged that she is not surprised by Klarna’s new initiative, given its 147 million active global consumers and the current market focus on data-driven services.
“The new feature comes in addition to Klarna’s banking product, browser extension launched last year and enabling consumers to shop with Klarna at every online store. This clearly outlines Klarna’s strategy to become the one-stop shop for all consumers’ retailing needs through one single point,” she says.
However, Mianda believes that collecting the breath of data that will be generated from these various points is only the first step for Klarna.
“By being able to further profile customers shopping data, in parallel to the financial overview of available funds, Klarna is most likely looking to monetise the value it brings to retailers and consumers beyond being a payment instrument.”
“The potential revenue opportunity, if played well, can be quite significant and will help Klarna cement its shift towards becoming a financial super app.”
How does the new feature benefit consumers?
The ability to manage and consolidate all online orders in one place may help consumers better understand and reflect on their personal spending.
“The new feature helps consumers save time and money and puts them in control of their personal finances by providing a single place where they can find all of their online purchases, regardless of how they paid for them,” a Klarna spokesperson told Charged.
“This saves time because there is no more digging through 1,000s of emails to find a delivery code, or switching between apps to add up this year’s purchases. It’s all in the Klarna App. And it saves money by giving consumers an easy-to-access single source of truth to review all of their online purchases.”
By branching out of payment instalments, Klarna is positioning itself as a centralised service for shoppers to keep track of their various purchases.
“The ecommerce dynamic is intense, and it is precisely because of the new habits that we consumers have adopted that I see some value in any opportunity to streamline and consolidate information to help manage purchases but also gain better insights in spending patterns,” Mianda adds.
For Mianda, the key question is whether Klarna is the application consumers would want to centralise all their information and whether the feature will attract new users to the app.
“As a standalone product, I am not convinced of the tractions it may gain to convert new customers, given the wider spending tracking and delivery tracking app markets.
“However, there is clearly an opportunity here for Klarna to drive engagement within its existing users base and boost usage of other Klarna solutions.”
To activate the new feature, shoppers must opt-in by connecting their email within the Klarna App, a requirement that is likely to raise concerns surrounding data protection and privacy
When probed on this concern, a Klarna spokesperson explained to Charged that after connecting their email, Klarna will ask customers to reconnect periodically to keep their account secure.
“To ensure privacy, we only scan for and import information from emails that pass a two-step selection process,” Klarna says.
“The first step of this process is done by an email provider (Google or Microsoft) which looks for specific keywords in emails and specifically excludes keywords relating to sensitive data.
“In the second step, Klarna checks the sender of the email to identify it as an online store. If the sender of the email matches the name of a retailer and the email contains relevant keywords – and does not contain keywords relating to sensitive data – only then will we ask for an email provider for the email content which we then process and import into the Klarna app.”
Klarna insists that this process is done automatically and at no point will anyone from the company read shoppers’ emails.
“With the constant focus and coverage around BNPL, I’d like to think that consumers have become more careful about sharing data,” Mianda says.
“Klarna would still carry the responsibility to ensure appropriate safeguarding by only collecting the data required and authorised by the consumer for related services.”
By offering a comprehensive single-purchase dashboard, Klarna has made a significant step towards its long-term strategy of increasing consumer reliance on its services and expanding beyond financial services. If consumer concerns around data protection can be allayed then Klarna may well be on its way to becoming the go-to general-purpose lifestyle app for consumers looking to track their online shopping.