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Klarna reveals traction in buy now, pay later options as more US states lifts lockdown orders

David Sykes, Head of US at Klarna

Klarna, global payments and shopping provider has released new data from its app in the US, revealing that travel services and event ticket sales are beginning to recover. While the sales are still lower compared to an average pre-COVID week, the Airlines category saw a 26% week-over-week rise in average daily transactions, while one event ticket seller saw Klarna-enabled sales increase by a whopping 330% week over week in the week ended May 9.

The company has also indicated that the average daily sales volumes for household appliances excluding sales made at big-box retailers, also increased significantly week over week, rising by 45%, while women’s accessories sales made through the Klarna app rose 12%.

“Our weekly data point to consumers’ desire to get back to the activities that enrich their lives, such as travelling and attending live events, as soon as possible. At the same time, consumers still seem to be focusing on their home life, as data from the Klarna app revealed that sales of vacuums, stand mixers and other home appliances rose by 45% week over week. That may indicate that people are purchasing flights and event tickets for the future, but for the time being, are continuing to look for items that make cooking and housekeeping easier and more enjoyable,” said David Sykes, Head of US at Klarna.

Along with analysing average daily volumes to identify category transactions, the company is also analysing the share of wallet or how its app users are dividing their spending among different shopping categories-to determine what product categories Gen Z, millennial and Gen X audiences are shopping for through its flexible payment options and how their e-commerce spending is shifting throughout the pandemic.

Through the period of May 3 to May 9, Klarna’s demographic data show that millennial Klarna app users increased their share of spending on apparel, footwear and accessories for the 4th week in a row while Gen Xers increased their share of spending by nearly 10% on this category. Its apps’ sales at stores that sell women’s accessories grew by 12% week over week till May 9.

Other critical findings for week over week in the week ended May 9 are:

  • The apparel, footwear and accessories category’s share of all purchase transactions made through the Klarna app increased by nearly 2% among Gen Zers, by 4% among millennials and almost 10% among Gen Xers.
  • The shift to DIY projects, items that make cooking and cleaning more relaxed, and products to make their homes more comfortable and livable are increasing. Gen Xers continued their eight-week trend with share up nearly 6%, by nearly 12% among Gen Zers’ while millennials’ share fell by almost 4%.
  • The share of spending on leisure, sport and hobby items has increased among Gen Zers and millennials while Gen Xers’ share of spending on the category fell slightly.
  • The share of spending on electronics has increased among millennials and Gen Xers with millennials’ share up by 7% and Gen Xers’ share up by 10%. Gen Zers’ share of spending on the category was down by nearly 5%.
  • All three demographic groups significantly decreased their share of spending on marketplaces, including Amazon.com,Target.com, Walmart.com and eBay.com, indicating that they are looking to other retail formats to fill their shopping needs. The share has decreased by nearly 8% among Gen Zers’ and Gen Xers and by 5% among millennials.

 

Klarna analysed purchase volumes for items bought through the Klarna app, for the week of May 3-9, for each of the seven previous weeks and for an average week based on the five weeks covering February 1-March 7, 2020. The company is planning to continue analysing weekly transaction data to identify how the coronavirus outbreak is affecting e-commerce and consumer shopping behaviour.

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