Stores have reopened, but with customers still concerned about safety, retailers are looking for ways to make their e-commerce experience as smooth as possible.
Macy’s announced today that it has partnered with Klarna to offer its pay-in-installments solution to shoppers of its website Macys.com, making checkout more flexible and affordable, while also becoming an investor in Klarna. (Financial terms of the investment weren’t disclosed.)
Macy’s is the latest retailer to partner with the payments company, which now counts 200,000 retail partners across the globe. By joining the Klarna platform, Macy’s will also gain access to its U.S. consumer network of 9 million shoppers; users can discover retail partners through the Klarna app and therefore there is an opportunity for merchants to expand their audience by appearing on the platform.
While a household name, Macy also stands to benefit from greater exposure to the younger demographic that is attracted to the Klarna solution. Mobile commerce has grown across all age segments but Gen Z and millennials are known for their smartphone usage. Similarly, these age groups are also more wary of standard credit systems and therefore are more likely to try alternatives, such as installment payments. (Only one in three millennials owns a credit card.)
“With a strong focus on digital agility and innovation, Macy’s continually seeks strategic partnerships that enable us to provide our customers with the best possible shopping experience,” said Matt Baer, chief digital officer at Macy’s Inc. “We’re excited to embark on a long-term relationship with Klarna that will help us reach wider audiences looking for seamless alternative payment solutions that provide them with financial control and convenience.”
A decision to also invest in the Klarna product reflects Macy’s commitment to digital innovation. As shoppers have moved online and opted for convenience and efficiency, retailers have been adopting contactless payments and increasing the number of payment options available.
By making a financial commitment to Klarna, which also offers solutions like “pay in 30 days,” Macy’s is acknowledging this shift towards financial flexibility as a more permanent consumer change.
Shoppers at Macys.com will be able to select Klarna at checkout and pay 25% of the retail price during that initial visit.
The remaining cost will be charged in three additional installments at two-week intervals, at no interest to the consumer; Macy’s will receive the full amount upfront, with Klarna assuming the risk. This convenience is aimed to help shoppers budget for larger purchases and increase order values for retailers.
“Macy’s is the shopping destination for American consumers, synonymous with quality, style, and celebration,” said Sebastian Siemiatkowski, CEO of Klarna. “Klarna is delighted to partner with Macy’s as the shift to online retail accelerates and the company continues to innovate and enhance its digital offerings to meet evolving consumer expectations, for which smart and flexible payments are essential.”