Klarna Reveals Luxury Consumer Behavior Data in Latest Report

According to Klarna’s latest consumer report data, 84 percent of luxury shoppers would find it helpful to pay for high-end items over time without interest or extra cost.

The report, The State of Smooth: Unpacking Luxury in 2022, is based on findings from a survey of more than 1,000 U.S. shoppers in addition to proprietary data from Klarna. The goal of the research was to gain deeper insights into how, where and why people are shopping luxury and understand luxury consumers’ priorities.

More from WWD

Notably, the report indicates that today’s luxury consumers are approaching the category with a new set of priorities and preferences, with sustainability becoming a prime factor in the desire to purchase high-end products that they believe will better stand the test of time. The top drivers of purchases among luxury shoppers were found to be quality materials (64 percent), brand name (52 percent) and longevity (50 percent). Almost half of the consumers also said authenticity was important to them with 39 percent also citing exclusivity.

At the same time, this consumer is getting younger. In fact, Klarna’s survey revealed that Gen Z (60 percent) and Millennials (63 percent) are more likely to purchase luxury items than Gen X (46 percent) and Baby Boomers (18 percent). In part, social media has contributed to a younger consumer in luxury with 73 percent of U.S. luxury shoppers said they have purchased a product after discovering it on social media. This number was higher when looking at Gen Z and Millennial shoppers.

“A new generation of younger, digitally savvy luxury shoppers is emerging, with new preferences toward how they shop and pay,” said David Sykes, head of North America, Klarna. “While the allure of brand names (52 percent) and exclusivity (39 percent) still drive luxury purchases, today’s high-end shoppers are looking for greater flexibility and innovation throughout their shopping experiences.”

Moreover, Sykes said, “for retailers, this means investing in technologies to create an elevated, higher-touch omnichannel shopping experience, both online and in-store — from interest-free alternative payment solutions at checkout, to the integration of virtual shopping and buy online, pick up in-store services.”

When considering a brand, Klarna’s survey found that 78 percent of shoppers consider a luxury brands’ commitment to innovation as an important factor driving purchasing decisions. And 61 percent of respondents said they want to use mobile apps. Another 57 percent are also looking for flexible payment options at checkout.

Authors of the report said innovation and new technologies, like experiences to shop in the metaverse or engage with augmented reality or virtual reality, are critical. Of consumers who reported they have heard about the metaverse, 70 percent said they would be interested in shopping for luxury products there. This was especially true for Millennials (76 percent), Gen Z (69 percent) and Gen X (67 percent).

Luxury consumers also indicated they are interested in engaging with new technologies in the form of virtual dressing rooms (22 percent).

At the same time, survey findings indicate that brick-and-mortar retail and physical touch remain critical to luxury shopping with 84 percent of luxury shoppers reporting they consider touching and seeing a product as an essential part of the purchasing experience. With this in mind, brick-and-mortar was revealed to be the most popular channel of choice for luxury shoppers in most categories including watches and jewelry, food and beverage, beauty, home, health and fitness.

Still, elevated online shopping continues to take off and two in five shoppers who bought luxury products last year said they did so online. However, according to Klarna, luxury shoppers care more about fast delivery than the average shopper. In comparison, consumers shopping for luxury items are twice as likely as non-luxury consumers to expect delivery within 24 hours and most luxury shoppers say they are willing to wait for delivery is one week (46 percent).

More than half of shoppers also indicated that brands creating digital content that mentions details about the materials used in product production are preferred posts. Strong visuals (58 percent) and video content (47 percent) also stood out as vital for brands to stand out.

Meanwhile, in tandem with the report’s release, Klarna has also announced a partnership with Platform, the e-commerce website backed by David Zwirner that makes hard-to-get works that were previously only available offline to art-world insiders available to buy online. Platform considers pay-over-time a “critical tool for growing the industry and selling to consumers who have never purchased art before.”

Klarna is also growing its place in the world of sports and has announced a new multiyear experiential partnership with NBA franchise the Chicago Bulls. Through the partnership, the companies plan to launch multiple initiatives including exclusive fashion collaborations inspired by the Bulls’ long-standing history of trendsetting on and off the court.

Along with the partnership, Klarna has signed separate deals with Bulls players Zach LaVine and Lonzo Ball who will collaborate as brand ambassadors. Fans will have access to shoppable social and digital content that will be created to showcase fashion looks by LaVine and Ball while also share behind-the-scenes pre-game styles and the players’ must-have essentials.

Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.