Chimney is a proud supporter of LBB. Over the next few months, as part of the brand insight channel, we’ll be spending time with leading marketers who have successfully transformed their brands.
In this conversation, LBB’s Natasha Patel hears from Klarna’s global brand strategy lead Carl Adam Frisk about how the brand has reinvented itself to become “the world’s favourite way to shop”, and what it really means to be “Smoooth”.
LBB> Since the launch of Klarna in 2005 to now, how has the brand developed and transformed?
Carl> Klarna started out as a payments company about 15 years ago, focused on making it easier, better, safer, and smoother for merchants to sell, and for consumers to buy items online. It was a pure B2B brand.
Remodelling a traditional invoice solution into the e-commerce context giving consumers the option to pay only when they received their goods, at no interest. Then we evolved into a payment service with an app offering smart shopping features like all-in-one spending overview. We now realise another evolution in our journey towards being a contemporary lifestyle shopping service at the heart of retail.
LBB> Does the brand's goals or messaging differ from country to country? And how are shopping habits different across cultures?
Carl> We do have a global narrative and a unified brand identity, which is consistent and coherent in every market. But, of course, market dynamics, consumer preferences and awareness levels vary significantly across markets.
For instance, in Sweden, as many as 97% of the total population know about Klarna, while this might be lower in other markets. This obviously provides unique challenges in each country but ultimately absolute brand coherence with state of the art execution remains a top priority.
LBB> It seems that Klarna has moved away from being a financial company to more of a lifestyle brand. What was the reason behind this move, and was this something you had planned for?
Carl> About four years ago, we made a significant shift in our marketing and brand strategy after deciding to shift from a B2B focus to B2B2C and DTC, putting consumers at the heart of the business. To allow for this shift, we redefined our brand-led marketing to resonate better with our target consumers. Even though payments are our core products, our North Star is to become the world's favourite way to shop. In that sense, we’ve had to reinvent ourselves in a way that puts us on the same level as our customers, showcases us as a modern company that understands pop culture and rethinks the way this incredibly boring industry has neglected consumers over the last decades.
LBB> What does it mean to be 'Smoooth'? How do you implement this as a brand?
Carl> Smoooth is our promise to customers. When you shop or partner with Klarna, you get more than you expect—the extra 'o,' the extra something. It's also our internal bar raiser that motivates us every day to work relentlessly to elevate the entire shopping experience for consumers and merchants alike.
LBB> Marketing is a huge part of the brand's business, what are the biggest strategies to keep Klarna at the forefront of consumers' minds?
Carl> At Klarna, our unique operating model ensures we focus on the right matters in our quest to be customer-obsessed, operating in smaller task teams to solve specific problem spaces. For instance, our in-house brand domain is divided into teams with their unique jobs to be done and related KPIs.
While one team may focus on cracking remarkable ideas, another may focus on composing compelling content, and a third might aim to refine our brand identity to keep it contemporary, distinctive, and extraordinary. This lean setup allows us to deliver quality experiences that keep us top of mind for consumers.
LBB> What have been some of the biggest challenges that the brand has faced, and how did you overcome them?
Carl> Over the past two years, Klarna has seen some remarkable growth. In just two years, we’ve more than doubled our market presence, the number of Klarna employees, as well as the range of products on offer, and increased our company valuation to $10.6bn with more than 90m consumers and 200,000 merchants. As a brand, accommodating this speed and further fuelling our growth has been a key focus point across the company. Finding the right balance between locally-driven independence as well as defining a consistent and global brand narrative has been key to this challenge.
LBB> With Covid-19 and the rise of online shopping, Klarna must have been busier than ever over the past few months! How do you think shoppers' habits have changed in recent years?
Carl> It’s clear that online shopping has significantly changed since the rise of the pandemic. Consumers have tried new brands, places or ways to shop during the pandemic and intend to continue using it even after the crisis ends. Clearly, this rise started long before Covid, back when Klarna was founded but has naturally accelerated in recent months.
On the one hand, it forces people to change their habits and, on the other, it makes the savvy ones even savvier. So it's a low hanging fruit to predict that the exponential curve we're on will continue for a while. This means for all of us playing a part in this journey, that we need to contribute to elevating the online experience, whether it's about the convenience of shopping, financial health, or smarter logistics.
LBB> Has the messaging and the brand's goals changed in the past six months to match this?
Carl> We did and still do act sensitively in terms of adapting to the situation. At the end of the day, Klarna exists for people. And we aim to build long-lasting relationships with all of our customers, partners, and stakeholders. Recent developments demand that we constantly listen and iterate our approaches.
LBB> From social media it seems that Klarna is really popular with the younger generation, are they the brand's main audience? How is your main audience driving the direction of the brand's goals?
Carl> Klarna is aimed at customers of all ages and our target market is any online shopper who values convenience, flexibility and financial control. While younger generations are more inclined to try out new services, it’s also worth noting that in many countries older generations are making use of online shopping for the first time. Staying customer-focused and nurturing these relationships by building products that fit their needs, preferences and lifestyles is absolutely crucial to our success.
LBB> What are some of the social and world causes that Klarna believes in and stands for?
Carl> As a customer-driven company, we are first and foremost focused on the premise of a single-minded business idea: to make online shopping smoooth. But there are certain realities we have decided to proactively address, such as for example by becoming climate neutral in 2019 or launching KlarnaSense, an initiative to encourage smarter and more mindful shopping.
LBB> Tell us about your partnerships with other brands. What have you learned from these, and how have you grown your partnerships over the years?
Carl> As our business model is based on both B2B and DTC, it is obvious for us to keep a keen eye on commercial partnerships with our merchants. Because we are genuinely customer-obsessed, we want to support our merchants to success.
For instance, co-marketing is a substantial part of our marketing strategy, so we tend to partner up with like-minded merchants to create value for consumers. In our latest community campaign—where we aim to engage a particular passion group—we teamed up with around 40 of our biggest sneaker merchants to launch a raffle to win a pair of unique, iconic sneakers. The insight was compelling, and the idea was simple: for too long, bots have been ruining it for true sneakerheads and prevented them from getting them what they love.
To combat this, we created the world's first sneaker raffle, where the chance to win was purely based on one's passion for sneakers. Your entry ticket was your heartbeat for sneakers. We built a tech solution where you placed your finger on your device's cam to confirm that you're a human and not a bot. That's a kind of partnership that is very rewarding for all, both from a relationship point of view and the activity results. It gained 700 million impressions, 185 000 raffle contenders (0 bots), and generated 137 000 clicks to our merchant's sites.
LBB> What are Klarna's plans for the future and what do you hope people will come to know the brand for?
Carl> We're on a mission to reshape shopping by elevating the entire shopping experience from browsing to owning. In the (near) future, we want to become the world's favourite way to shop. It's an ambitious goal, but we're an ambitious company with ambitious people to lead the way.
From a brand perspective, I hope people will come and stay for the community and the great value they get from being a part of that. Besides being their all-in-one shopping service, we want to become their main source for inspiration, convenience and perks to make shopping more enjoyable.