Hacking CLV and driving loyalty with great payment experiences
By Rob BeattieShopping used to be so simple. Consumers would consider what they might buy, go to the store and make a purchase with card or cash. But now, with…
By Rob Beattie
Shopping used to be so simple. Consumers would consider what they might buy, go to the store and make a purchase with card or cash. But now, with increasing numbers of new entrants and technologies, ever increasing products, platforms and new ways to pay, the journey to purchase is becoming ever more complicated.
The entire shopping experience has been disrupted and, and in this commerce landscape that’s ever more competitive, and constantly evolving, there’s only more disruption to come. It’s clear that the same old approach won’t work for retailers looking to boost loyalty and increase their customer lifetime value.
Loyalty is a key area which retailers should look to reassess. And, while we know that loyalty is driven by great experiences, if they’re to keep up, retailers have to optimise their experience in line with the changing commerce environment and rising consumer expectations.
Indeed, although long established strategies such as rewards and loyalty schemes are still important, retailers need to recognise that today’s consumers desire experiences that go beyond traditional shopping, too – and here the payments experience has an important role to play.
Contrary to common perception, great payment experiences don’t just happen at the point of checkout. In this brave new world where the relationships between customer, retailer and service provider have been broken down, payment providers, like Klarna, are flipping the customer journey on its head – and turning payments into a more holistic part of the customer journey.
Instead of waiting to choose the payment method at checkout, now, there’s a new cohort of customers that want to pick their payment method first, and retailer second. This means that, by partnering with businesses that supercharge the payments experience, not only can retailers offer their customers an enhanced offering at checkout, these partnerships can also act as a gateway to customer acquisition, paving the way for long lasting loyalty that will safeguard and create future growth.
H&M, one of the world’s leading fashion retailers, partnered with Klarna to do just this. With almost half of all the fashion retailer’s mobile sales coming from iOS users in some countries, H&M wanted to capitalise on this to provide its millions of digital savvy customers with a fast and responsive payment experience on the native app.
Fitting seamlessly into the app, Klarna gives H&M’s customers smooth payment experiences across all channels. And a fabulous interface, pre-filling, a range of flexible ways to pay, and a rich post-purchase experience ensure it’s a convenient and compelling proposition for shoppers.
By working with Klarna, H&M has been able to unlock great payment experiences for customers whether in-app or in-store – and this partnership has resulted in 40-50% of these shoppers choosing to pay with Klarna.
“The results are really promising,” adds Mikael, Pay Later Services Architect at H&M. “For iOS users alone, we have seen a double-digit (11%) uplift in conversion. It’s clear that loyal customers love being able to access pay later with a quick tap of their mobile – no fuss or friction. We see Klarna In-app as a key differentiator in both existing and new-entry markets especially for mobile-first Millennials and Gen Z customers.”
In order to survive whatever change and challenges the next 10 years will bring, retailers must be prepared to adapt their approach to increasing customer lifetime value – whether that’s by rethinking loyalty or the payments experience. And, for forward thinking retailers who are prepared to rip up and rewrite the rulebook, there will also be huge opportunities to win over the shoppers of tomorrow, grow their share of wallet and steal a march on the competition.