Sponsored Content

Klarna grows in London as it expands virtual shopping

London is a global center of digital commerce.

Klarna has been in London since 2014 to leverage the tech innovation and diverse customer base of the city, and sees the capital of the U.K. as also filling the role of global fintech capital. London’s finance strengths serve as an ideal base for e-commerce companies looking to grow to a global scale.

The global retail bank, payments and shopping service is active in 17 global markets, including the U.K., where it has more than 15 million users and partners with over 14,000 retailers. But what exactly makes London appealing to global e-commerce brands like Klarna?

Alex Marsh, Head of Klarna U.K., explained in an article originally published on LinkedInthat London has “incredibly high” Internet penetration and e-commerce adoption, with a “population as a whole (that is) open to new ways of thinking.” In fact, e-commerce user penetration in the U.K. is set to reach nearly 90% by 2025 (source: 2021 E-commerce Trends and Statistics in the UK (

Marsh also cited London’s “open and collaborative” government that is positive toward fintech; and its “world-leading” pool of fintech talent, including data engineers, product designers, and marketers. Unsurprisingly, Klarna recently opened an 11,000-sq.-ft. office in the Holborn district of London.

Klarna’s newest ‘Future of Shopping’ report, released in collaboration with London & Partners, the business growth and destination agency for London, shows the retail potential for North American brands, as well as the latest innovations that have been emerging in the city.

One example of the type of innovation Klarna is pursuing is Klarna Virtual Shopping, which connects online shoppers to an expert, often in a real store nearby, through video text, and chat. Retailer teams can also see what shoppers are browsing online in real-time, providing an opportunity to answer questions and share customized recommendations, with Klarna Virtual Shopping making sure the associate gets the credit for the sale.

Using Klarna Virtual Shopping to shop is as easy as using a social networking app like FaceTime or WhatsApp to converse with a friend.Hundreds of global brands work with Klarna Virtual Shopping to seamlessly merge their online and brick-and-mortar experiences.

As convenient as online shopping is, consumers still crave the personal nature of the in-store experience. Klarna analysis has found that customers routinely spend up to 70% more online when they able to have a personalized visual shopping experience. And they are 21 times more likely to make a purchase after interacting with an in-store associate.

Through Klarna Virtual Shopping, associates have been able to give customers up close and personal demos of products - from how jeans fit, to how to apply blush and highlighter, to co-designing their new living room.

Klarna works with brands that are looking to level-up their omnichannel experience and bring human connection to their online stores. Millions of shoppers in over 200 countries have virtually shopped with Klarna Virtual Shopping in online stores including rag & bone, Levi’s, and Herman Miller, as well as with fast-growth independent retailers like Credo Beauty, Heyday, Incu, and Saturdays NYC.

The onset of the COVID-19 pandemic and temporary store closures had brick-and-mortar retail stores racing to preserve their "in-store" experiences online and e-commerce brands searching for creative ways to make their online stores personal and authentic.

Klarna saw a 950% increase in virtual shopping sessions across all customers, and the brands using Karna Virtual Shopping (at the time, known as Hero) more than quadrupled between March and December 2020. Virtual shopping proved to be critical, as 85% of Klarna’s retail customers were able to keep their retail associates employed amid temporary COVID store closures, and virtual shopping interactions accounted for up to 15% of the company’s customer revenue in 2020.

Some of Klarna’s brand partners turned their retail spaces into “dark stores,” some had store associates demoing products from home, and some launched entirely new experimental spaces just for their virtual shopping interactions. In response, Klarna also launched a new one-to-many video feature, now in beta. The feature, complementing live chat and video calls, allows retailers to deliver a carousel of short, shoppable videos pre-recorded by associates in-store. 

According to Klarna, e-commerce overall is expected to account for more than 58% of total retail sales by 2022. Even as stores open back up, the ability for store associates to build and maintain close relationships with customers across digital channels will remain critical. The store associate has never been more important, but they must have the tools to sell online, not just in a physical store.

Associates humanize the shopping experience in ways that chatbots never could. As stores - temporarily or permanently - shift more online, retailers must retain the human edge as their competitive edge, and solutions like Klarna Virtual Shopping, developed in fintech-hospitable environments like London, help make it possible.