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Klarna / WIRED
Last year could hardly have started better for Swedish buy now, pay later firm Klarna. After signing up a new retailer every seven minutes over the course of 2019, the business started 2020 from a position of strength. UK customer numbers had doubled, US numbers had grown sixfold and revenues had shot up by 31 per cent to $753 million.
Then Covid-19 hit and, as country after country went into lockdown, shops around the world were forced to close. Disastrous for many, it was exactly the kind of negative global event Klarna needed to thrive. As Klarna chief executive Sebastian Siemiatkowski wrote in the company’s 2020 interim accounts, the pandemic made its offering “more relevant than ever” as retailers shifted online.
Klarna isn’t the first banking service to do this, but it is, arguably, the first to do it so successfully. Klarna’s marketing strategy positions the company as a friend offering a helping hand, as opposed to a corporate bank offering a loan – and it’s perfectly hooked its target audience of Millennial and Gen Z shoppers, many of whom use it on small clothing transactions.
“It doesn’t feel like a normal, serious, adult credit situation,” 24-year-old Layla tells Dazed. “It feels young and fresh with a carefree, ‘Don’t worry, just pay us back later’ attitude. The branding is really clever as it’s deceivingly innocent for something that can actually get you into debt.”