Will Klarna’s BNPL Pop-up Retail Store in LA Be an Oasis or a Mirage?


It’s being branded as a “Klarna Oasis,” a two-day pop-up store a few blocks off the Sunset Strip in West Hollywood that marks the embattled buy now, pay later (BNPL) FinTech’s first push into physical retail in the second largest city in the country.

At a glance, the Oasis looks like most other sales events, with a mix of promoted products, celebrity appearances and socially minded activities. But unlike other pop-up stores that are hosted by a brand or retailer, this temporary physical location is being run by a payments firm, albeit one that is inextricably linked to the retail industry that it is now cloning.

“We’re excited to bring the smoooth [sic] Klarna shopping experience to life for the first time in Los Angeles,” Klarna Global Head of Partner Success Raji Behal said in the company’s announcement of its pop-up shop that will only be open Saturday and Sunday (July 23 and 24).

Oasis or Mirage?

For Klarna, the pivot to pop-ups and physical retail is being touted as both a social responsibility and a business opportunity that is intended to “drive positive change” while also “making mindful shopping as easy as possible for consumers.”

That said, the fact that the LA promo comes at a time when consumer spending on discretionary items is falling, and the 17-year-old Swedish financial firm’s pre-IPO valuation has also dropped by 85%, as the threat of increased regulatory oversight in the U.S. and Europe grows, and the event presents the distinct chance that Klarna’s oasis may actually turn out to be a mirage.

For its part, Klarna has been doing branded pop-up events for years in other countries, such as the temporary experiential retail experience it set up three years ago at London’s Covent Gardens, as well as its first-ever immersive sports-themed pop-up held in Cleveland in February that focused on basketball’s influence on fashion.

While the company has made no indication yet that it will do more pop-ups, the timing of the California shop is, at the very least, noteworthy and will very likely not be Klarna’s last such effort to connect with customers and brands as it works to restore its former standing.

BNPL’s Best Days?

To be sure, Klarna is not alone in experiencing this reversal of fortune, which saw it go from being worth more than $45 billion to less than $7 billion in under a year, as the eight-month sell-off by last year’s hottest and fastest growing segment of consumer finance has also dealt similar blows to other major players in the BNPL space, including Affirm and Afterpay parent Square.

There is also the fact that Klarna already has relationships with over 400,000 retail partners in dozens of countries, including Nike, H&M, Macys and Ikea, and that its self-proclaimed mission to “revolutionize the retail banking industry” has connected the installment payment plan provider with over 150 million worldwide users who do over 2 million transactions per day.

Whether the FinTech needs to pivot to physical retail and promotion is debatable and it remains to be seen if it works and is repeated, Klarna is going all-in on its pop-up and is making the local shopping event an omnichannel experience for those who can’t make it into the store with a parallel platform running online for its specially curated pop-up collection.

“We realize we have a responsibility to help drive positive change towards a better future and providing our consumers unique access to shop more mindfully is just one of the many ways we are working to make a difference,” Behal said.

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