Macy’s Inc. has invested in Klarna and will offer the payments and shopping service to its online customers through a five-year partnership.
Klarna offers consumers payment options, including paying after delivery; paying in four equal, interest-free installments, and direct payments. Klarna is already backed by Sequoia Capital, Bestseller, Permira, Visa and Atomico. Macy’s did not disclose the size of its Klarna investment, but the retailer is not one of the major investors.
“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 of 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.” He said future potential deals could entail either an investment or integrating the service or both.
The 15-year-old Klarna indicated that it has more than 200,000 retail partners including H&M, Ikea, Expedia Group, Samsung, Asos, Peloton, Abercrombie & Fitch, Nike and AliExpress, but that Macy’s is one of the first department stores to partner with the company.
Macy’s said it has been “fast-tracking digital initiatives and partnerships to quickly meet increased customer demand for online shopping and flexible payments options.”
In the second quarter, Macy’s picked up 4 million new online customers, according to the department store’s chairman and chief executive officer Jeff Gennette. “They were younger, more diverse. They asked for services that frankly we didn’t have,” Gennette said, citing installment pay, during a conversation last week with Matt Shay, president and ceo of the National Retail Federation.
Gennette also said customers wanted same-day deliveries, so Macy’s recently signed on with DoorDash, the same-day delivery service, which Baer said covers nearly 500 Macy stores nationwide.
A couple of years ago, Macy’s made an investment in b8ta, a software platform and business model that enables vendors selling online to also launch their products in brick-and-mortar stores.
“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,” said Sebastian Siemiatkowski, ceo of Klarna. The company said the Klarna app sees more than 12 million monthly active users globally. Aside from payment options, Klarna offers social shopping and personal finances. The company said it has a valuation of $10.6 billion, and is one of the largest private fintechs.
Last January, Siemiatkowski said Klarna was working with retailers to integrate “digital capabilities into physical stores to create an easy, inspiring and convenient shopping experience for customers.”
David Sykes, head of U.S. for Klarna, noting that Macy’s was not one of Klarna’s major investors, described the Stockholm, Sweden-based company as a fin-tech company at the intersection of retail payments, banking and shopping. Klarna has three offices in the U.S., in New York, Los Angeles and Columbus, Ohio.
“Macy’s e-commence is growing so they are looking at tools like Klarna to help them accelerate digital growth,” said Sykes.