The Klarna app is introducing a new feature that enables users to point their phone at a piece of clothing or electronic device and find comparable products. The software, based on data from PriceRunner, which Klarna bought for nearly $1 billion, is intended to help the firm streamline operations as it, like countless other fintech businesses, rapidly moves toward financial stability.
Swedish tech startup Klarna this week released an AI-powered image recognition tool that will allow its users to take a photo of an item of clothing or an electronics product to then find similar items and prices within the Klarna app. This tool aims to compete with big U.S. tech companies by mimicking the functionality of Google Lens, wherein users can snap a picture and be directed to related items. PriceRunner, a price comparison service recently purchased by Klarna for close to $1 billion, provides the data that trains this tool.
PriceRunner goes up against the likes of Amazon, Google Shopping (Google's shopping comparison service), and Kelkoo (which was founded in France). "Utilizing AI is a huge possibility for Klarna," David Sandstrom, Klarna's chief marketing officer, told CNBC. "Due to our particular model of operation, we possess the capability to make use of new openings that grant superior consumer benefits, such as AI, in a more rapid fashion than large traditional banks and credit card companies."
Sandstrom claimed that Klarna's image recognition technology had an advantage over Google's offering, as it was tailored to improve the shopping experience, rather than directing individuals to a broader range of web search results.
Klarna, established in Stockholm in 2005, took off during the Covid-19 pandemic as more people resorted to online shopping.The company's 0% credit option proved especially popular with younger and less prosperous shoppers unable to get a credit card due to their credit score.As a result of the low interest rates driving tech stock speculation, Klarna's market value skyrocketed to an apex of $46 billion.At this point, the company started to see a decline,85% to be exact, and its valuation dropped to $6.7 billion.Moreover, Klarna had to let go 10% of its global staff last year.This year, Klarna has sought the help of AI in order to becomemore efficient, like many other fintech entities, and push towards profitability.In August, Klarna declared profitability for the first time, making August 2023 the first month of profit since 2020.Klarna now has its OpenAI API working for 2,500 of its 5,000 employees, allowing them to embed Microsoft’s technology in their own programs and services.
Despite regulators, especially in the European Union, expressing concern over the rapid acceleration in the development of generative AI technology that can produce new work based on human input, Sandstrom remains hopeful for Europe's future. Speaking to CNBC, Sandstrom stated, "I still have my hopes up when it comes to Europe. We can take inspiration from what is coming out of China. There is a lot happening in Silicon Valley too, but there is no valid reason why Europe should be lagging behind." He further advised that it is essential the world embraces AI and starts evaluating its potential both for good and bad before making any decisions. According to Sandstrom, now is "way too premature" for any judgments to be made.
For years, Klarna has offered consumers the ability to spread payments over time, but now it is enhancing its services to include more features geared towards shopping. This April, their app was updated with new AI-based recommendations, much like on TikTok, to make finding items easier. Additionally, they are introducing shoppable videos to Europe, giving customers access to unboxing videos, tutorials, reviews and more from content creators. To join the creator economy, Klarna has started their own cashback rewards program; shoppers in the U.K. can earn up to 10% when using pay now, pay in three, or pay later at select stores like Farfetch, River Island, The North Face, and Hotels.com.
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