APIs, RETAIL & ECOMMERCE
The etrolly dash Data from pandemic-fuelled online shopping gave Klarna an insight into our collective psyche.Can the payment solutions provider and its etailers now use it to ride a permanent digital wave? Senior Analytics Director Alex Marsh thinks so The world slowed to standstill in 2020 – at least for many of us. No frantic commuting, no rushing to get the kids out of the door to school. We rediscovered family life, spent more time in the garden, took up bread making, even. The Sunday morning feeling extended into the rest of the working week. That slowdown was only in the world visible to most consumers, however. Because, behind the scenes, the reverse was happening; online stores were surging with activity, payment platforms rushing to make themselves available to shops that had closed their doors but were now suddenly packaging up deliveries for new, online customers – everyone scurrying to get digital systems up and running as face-to-face retail evaporated. A seismic shift was happening – and payments platform Klarna has been helping traders ride the resulting tsunami since March. What’s more, it looks like surf’s up for etail until at least March 2021, when a vaccine will perhaps restore some sense of normality. Alex Marsh, senior analytics director at Klarna, who also leads its UK division, has been crunching the numbers: “ONS (Office for National Statistics) figures suggest there has been a 44 per cent increase in online purchases since January,” he says. But he doesn’t need the ONS to tell him that; Klarna’s own data shows transactions across its payments platform increased by 43 per cent in the first nine months of the year. Klarna was already Europe’s largest fintech startup, having been valued at $5.5billion during a funding round in 2019. “We’ve brought on up to 9.5 million UK consumers,” says Marsh – an astonishing proportion of the population, given that the 20 to 35-year-olds who typically make www.fintechf.com
up the market for online goods only number 15 million individuals. But nothing this year is typical. “All age groups and demographics are shifting to online: our fastest-growing age demographic during lockdown was actually Generation X, i.e. the 40 to 54-year-olds,” he adds.
All age groups and demographics are shifting to online: our fastest growing age demographic during lockdown was actually Generation X
So, it wasn’t that the pandemic caused millennials to buy more clothes from ASOS, then – rather, it caused people who’d never shopped online before to figure out how to fill digital baskets. This demand was met by a corresponding surge in supply – businesses that had never sold online before figured out how to use ecommerce. “Savvy garden centres were even using Facetime to demonstrate the plants that they had on offer to their customer base, – I love that,” Marsh says. COVID-19 has added £5.3billion to UK ecommerce sales this year – and, while much of that was through Amazon, a significant amount has also been driven by smaller outlets that had previously put their fingers in their ears when anyone talked about digital opportunities. As Marsh points out: “It took six years for the proportion of ecommerce to move from 10 per cent to 20 per cent, and then in three months this year, between February to April, it moved from 20 per cent to 30 per cent.” For retailers to put pedal to metal and get online so quickly, you might think they too had been on some kind of pandemic trial drug for traders. But it turns out, Klarna was all the boost they needed. "Particularly for small merchants and independents, we’ve definitely seen super-strong demand for partners to support them on building the sort of capabilities they need to compete,” he says. ”Ecommerce platforms can often have Klarna as a payment method live within 24 hours of the initial enquiry.” Being behind the scenes of such a shift offered Klarna a unique, sociological window to peer into the human soul during the pandemic. Marsh talks of a ‘very consistent pattern, across the different markets that we support’. Issue 7 | ThePaytechMagazine
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