Klarna aims to lead a shift in purchases from search to recommendations.
While 80% of purchases currently originate from search, shoppers are now looking for recommendations instead, the buy now, pay later (BNPL) provider said in a Friday (May 26) press release announcing its first-quarter earnings.
Klarna said it can provide this sort of personalized shopping experience by using SKU-level data from transactions and other data sources, with the consumer’s consent, together with artificial intelligence (AI), according to the release.
“Leveraging this, Klarna uses AI to offer relevant and finely tailored product recommendations within search and discovery, enhancing consumers’ experience and driving significant growth for retailers,” the company said in the release.
In reporting its first-quarter results, Klarna said its retailer revenue grew by 17.3% year over year — and 34% in the United States — as it added new retail partners and expanded relationships with existing partners.
Among its newest partners are Samsung, Uniqlo, Boden and Airbnb, according to the press release.
The company also halved its operating loss compared to a year earlier and expects to reach profitability on a monthly basis in the second half, the release said.
“This quarter we’ve impressively managed to grow GMV [gross merchandise value] and revenue, at the same time as we cut costs and credit losses, and also investing ambitiously in AI-driven products,” Klarna Co-founder and CEO Sebastian Siemiatkowski said in the release. “We are on track to achieve profitability this year all while revolutionizing shopping and payments through our AI-powered approach.”
Klarna debuted a personalized shopping feed powered by AI in April.
The feed is powered by Klarna’s in-house AI product recommendation engine, giving users a “feed of highly personalized product recommendations” that becomes tailored to them is it learns more about consumers’ preferences, the company said when announcing the launch of this offering.
A month earlier, in March, Klarna said it is working with OpenAI to use ChatGPT as a personal shopping assistant.
The Klarna integrated plug-in for ChatGPT will enable users to ask the platform for shopping advice, receive product recommendations and then tap on a link that takes them to a product page on Klarna’s search and compare tool.
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