Price discrimination, e-commerce marketplaces and cross selling

The Chanel Boy bag is a classic. It’s rectangular shape, quilted stitching on grained Calfskin, chain detailing and iconic Chanel logo which sits super imposed on a metal plaque screams luxury, exclusivity, status. A highly coveted bag, with a price tag to match it. A price tag justified on the quality of the materials used to create it, the artistry in its design, consumer demand and brand equity. Consumers accept the price tag, in part because it acts almost like a membership fee to an exclusive international members club. The price each consumer is willing and able to pay to get into that club is different, luxury fashion brands like all businesses want to charge consumers the most that they are willing to pay for these items. It has historically been difficult to do so on a personalised basis because businesses haven’t had the means or legally been allowed to do. The consolation prize has been the opportunity to set prices, discriminate based on geography. Luxury brands and other retailers have opted to set prices based on “the demographic, socioeconomic and even the psychographic characteristics of households and individuals with an area” (Bentio & Bentio, 2004). According to handbag-prices.com the Medium Chanel Boy bag retails at (US)$4,607 in Brazil, (US)$5,127 in the UK and (US)$5,567 in Canada, the varying price points in each market has allowed Chanel to decentralise pricing and optimise its performance in individual markets. In an increasingly global and connected market this only works because consumers have not been able to easily buy goods from other markets. The cost of flights, delivery and even prescriptions laid out by high-end brands have gotten in the way of consumers being able to get the best prices. That has been until now, when it appears the European Commission in collaboration with the UK government has decided to step into the role of fairly Godmother of sorts (to all involved) challenging the status quo with its updated VBER regulation.

What is VBER?

VBER stands for Vertical Agreements Block Exemption Regulation, it has been in place for the last 10 years and is due to be updated May 31st 2022. The regulation in part addresses vertical constraints on e-commerce - the restrictions put on e-commerce platforms, including resale marketplaces by brands. A clear-cut example of this would be a luxury goods manufacturer/brand like Bottega Veneta and an authorised e-retailer like Net-a-porter or Harrods. The regulation addresses efforts by brands to have more control over where, in what condition and at what prices they are sold at. To date there have been a succession of cases and pleas for changes to regulation involving luxury goods manufacturers, retailers and resellers. Whether it be The Tiffany & Co vs Ebay or Chanel vs TheRealReal there has been a battle over whether unauthorised marketplaces should be allowed to sell high-end goods. In a white paper put forward by LVMH to the European Commission in 2018, the conglomerate advocated for selective distribution networks – the right to restrict where, to whom and in turn at what price luxury good could be sold at in order ‘preserve the image and economic value of high – ended branded products’.

The new VBER offers extra protection for high end manufacturers allowing them to set constraints on the distributors which do not have to apply across the board (online and offline). This allows the manufacturers to prevent authorised distributors from selling goods on third party platforms like Amazon. It also preventing manufactures from setting minimum advertised prices, only price recommendations. (It’s key to note that in US markets high end retailers can set minimum prices).

What does this look like?

Assume Reseller T buys a Chanel Medium sized Boy bag in Brazil for (US)$4,607 and wants to cash in, they will be able to use price comparison websites to determine what the going price for that item might be across authorised retailers in Europe using a platform like Lyst. However, they will not be able to sell it to consumers in the UK or EU on a platform like Amazon. They remain able to sell it on a platform like Vestiarie Collective or Stock X. The only way luxury goods manufacturers will be able to stop Reseller T from (1) knowing that the price, (2) being able to exploit any price variations and (3) prevent them from attempting to cross -sell is to limit the sale only offer direct-to-consumer services online, which brands like Chanel and Louis Vuitton already do. The new VBER regulation will allow luxury goods manufactures to more aggressively prevent unauthorised distributors that could be seen to their ‘brand image’ from selling their goods. For luxury goods manufacturers partnering with distributors is a great way of generating revenue, more distribution channels = more sales. When the desire to partner with distributors is also met by the desire to more actively manage their distribution networks and brand value (luxury prestige), it becomes significantly harder to set guidelines within the bounds of the law. This could potentially lead to tacit collusion between e-retailers and luxury goods manufacturers. Tacit collusion is a non-explicit agreement between competitors (luxury goods manufacturers often act as DTC retailers as well) regarding how to coordinate behaviour. Actions like agreeing to give exclusive access or pre-emptive access to certain products assuming the authorised distributors agrees to sell the it at a certain price or that the distributor imposes a secret ‘foreign payment fee’ on foreign customers from markets where the luxury goods manufacturer’s own price recommended price is higher becomes an increasingly likely possibility.

Price of Medium Sized Chanel Boy handbags across a variety of markets and the cost of flight to each location from London UK

Country	Price (US$)	Cheapest Flight from London
Brazil	$4,607	$965.56
South Korea	$4,676	$613.32
Hong Kong	$4,695	$524.91
Russia	$4,772	$59.40
France	$4,877	$70.45
Germany	$4,877	$84.26
Italy	$4,877	$13.81
Spain	$4,877	$27.63
Belgium	$4,877	$98.08
Netherlands	$4,877	$60.78
Japan	$4,942	$1146.52
Denmark	$4,942	$41.44
United Kingdom	$5,127	n/a
Singapore	$5,201	$638.18
Australia	$5,267	$1131.33
Sweden	$5,326	$42.82
United States	$5,341	$356.39
Canada	$5,567	$352.24

Sources: handbag-prices.com/chanel/boy/, Google flights and Morningstar for Currency via Google

In the 2010, 74% of retailers in the EU did not sell products to customers in other EU countries. When Mystery shoppers attempted to buy from other countries only 61% of their efforts were successful. The refusal to sell ‘re-routes’ consumers to shop on e-retailers or in stores located in their own home market. The act of discriminating against foreign consumers (at least within EU & UK) has maintained the sanctity of geographic or third-degree price discrimination as it is formally called. Alongside rerouting and the earlier mentioned ‘foreign payment fee’ the imposition of heavy delivery costs can also be used to put consumers off exploiting retailers who cross-sell. The extent of the effectiveness of heavy delivery fee with luxury goods is somewhat questionable, assuming a consumer is comfortable parting with $4,877 is an additional fee of $50-$90 likely to stop them? The only way it becomes truly affective will be if the prices of delivery exceeds the difference between the price of the item in the crossing selling market and the home market. A difference like that would be relatively easy for regulators to pick up on and would suggest luxury goods regulators were ‘setting minimum prices’ which VBER prohibits.

Dual Pricing

Going forward VBER update will allow for different wholesale prices depending on whether the product is being sold online or in physical store within the same market. Something that previously hasn’t been allowed. This change is seen as a response to the struggling performance of physical stores, especially in the wake of COVID-19. Offering a lower in store price encourages consumers to visit, engage in the luxury experience and strengthens/maintains the brand image of luxury manufacturers who often sell in their own stores or through concessions which they have full creative direction over. When high prices apply across the board consumers are likely to seek out a bargain, choosing to look online for a potentially lower priced alternative. In a market where luxury goods manufactures are not allowed to a minimum price for distributors the expensive physical store loses business. Physical stores are undeniably more inefficient than online retailers and marketplaces, the allowance of dual pricing gives luxury goods manufacturers who are essentially upstream monopolists (who operate concession and DTC stores) and advantage in the downstream oligopolistic market against other resellers/distributors. This is known as ‘productive efficiency’ as coined by Yoshida (2000). This advantage for physical stores creates more intense competition in the downstream (sales to consumer) market, which ultimately benefits consumers. By excluding distributors like Amazon who often put very little effort into marketing or courting consumers, the luxury goods manufacturers address the concerns about distributors who ‘free riding’ as explained by LVMH in their white paper to European Commission.

In the face of this great competition luxury goods manufacturers who are upstream monopolists (sole producers of their authentic goods) as well as downstream oligopolists (when they sell to consumers not only through DTC but also selected distributors) it is important for them to introduce some sort of strategy that will generate demand and bring in success for their physical stores.

A potential phy-gital payment solution

- A loyalty card/account like offering in which consumers are rewarded for using in store and online with early access to collections, brand events and workshops etc in exchange for personal data on their shopping habits with the business or manufacturer.

- This would introduce the opportunity for a personalised pricing model in stores in which businesses are able to estimate their consumer’s maximum willingness to pay and charge them accordingly. Having the capabilities to offer such a model would draw the luxury goods industry towards ‘perfect price discrimination’ which is often very difficult to achieve.

- Luxury goods manufacturer’s being able to utilise their monopolistic advantage to convince consumers to use their loyalty card in-stores (especially) opens the possibility to personalised pricing in addition to the geographic price discrimination.

- We have seen widespread success in the implementation of such schemes in the grocery and food market (for Tesco Clubcard and Starbucks Rewards), though they have not been used to directly offer consumers personalised pricing.

- The more information the luxury goods manufacturer has on their consumer the easier it becomes for them to profile that consumer like a ‘group’ or market, which it already does through geographic and third-degree price discrimination. The likelihood for this strategy to be successful is strengthened by the market/upstream monopoly power of these manufacturers and the new ability to restrict consumers from reselling items on undesirable reseller platforms.

As popularly documented the luxury goods industry has not always been the best at developing its own in-house technology solutions, a potentially great partner for such a product could be Klarna, the BNPL service provider, which offers a system that aids consumers when they pay. The development of a joint loyalty product in which Klarna would potentially adapt its checkout and wishlist offerings to also be usable in store luxury brands could collect personal data and offer consumers at the point of the checkout/till a custom price. Marketing the partnership in a similar style to the AMEX x British Airways card, could go someway in convincing users.

The legality

According to EU consumer protect law the offering of personalised pricing is considered an ‘unfair commercial practice’, to be permitted traders are required to be transparent about it and clearly inform consumers about how the prices are calculated. In most industries having to disclose such information could potentially discourage consumers from buying items, however, given the relationship between status and luxury goods, pairing the personalised pricing with early access, or exclusivity has the potential to make it acceptable. The applications of varying degrees of personalised pricing takes place online using social media data and profiling techniques, the acceptance of it seems quite common and when consumers feel hard done by these pricing strategies they tend to opt for anonymity, assuming the right to anonymity remains I believe that the phy-gital payment solution could be viable.

Sources:
https://www.coleurope.eu/sites/default/files/uploads/event/guillaume_duquesne.pdf
https://jingdaily.com/these-common-pricing-mistakes-destroy-luxury-brands/https://www.businessoffashion.com/articles/retail/the-price-of-transparency

https://www.whitecase.com/publications/alert/new-eu-competition-rules-distribution-agreements

file:///C:/Users/recepusr/Downloads/DualPricingEJLE.pdf

https://one.oecd.org/document/DAF/COMP/WD(2018)128/en/pdf

https://ec.europa.eu/competition/sectors/media/lvmh_contribution.pdf

Surrealism, NFTs and the Case for Luxury Goods authentication.

Techies are often portrayed as being logisticians. They are cast as observant, deep thinking, introverts who only take action after critically analysing all potential choices. They lean towards a rational outlook on life and so it is reasonable to assume that they are should be less susceptible to the sweet allure of conspicuous consumption. Conspicuous consumption is ‘the purchase of goods or services for the specific purpose of displaying one’s wealth’. It is the reason why a driver buys a Porsche Cayenne over a VW, despite them using the same engine. In the case of a growing number of Techies, it is in part the reason why they pay a premium to own the ‘original version’ of digital picture that can and is copied freely across the virtual universe. Yes, it is the reason why Techies own NFTs.

What is an NFT

An NFT (Non-Fungible token) is a certificate of ownership for a ‘one-of-a-kind’ digital asset that can be bought and sold online. This asset differs from its peers because it has no readily interchangeable substitutes for its value. This is because each NFT has its own unique signature that cannot be matched anywhere. Think of this unique digital signature as a signet of authenticity. Even though it can be redrawn, ‘copied + pasted’, there is a ‘digital’ acceptance that the NFT minted version (identified by the signature) is THE ORIGINAL.

The acceptance and recognition of the NFT creates sense of ‘digital scarcity’ as described Arry Yu. This sense of ‘digital scarcity’ is only sustained and informed by the willingness of people to accept that it is scarce, irreplaceable, unmatched. A Canadian sci-fi writer by the name of William Gibson used the phrase ‘consensual hallucination’ to describe cyberspace nearly 40 years ago, it suggested that the we all consent to belief that what we see, experience and interact with online is in-fact real despite it not matching up with our physical lives. NFTs takes this concept a step further asking us to accept an easily copied (to the point of being indistinguishable) digital item is extremely rare and real. It then asks us to place a seemingly unreasonable value (sometimes going into the million) on the digital asset to affirm that belief.

For some, accepting this is illogical, it makes no sense because NFTs have very little grounding the real world. It is incongruous, meaning that ‘it is not in harmony or keeping with the surroundings’ of our lives. For others NFTs are revolutionary, it has the ability to ensure creators are adequately compensated and to potentially solve crime. The early products and NFT offerings flooding market places like OpenSEA are too abstract for the mainstream, they are the play things of the wealthy, who are looking for new ways to self-aculeate (feel good about themselves) and so real utility is irrelevant. If NFTs are to be a true success then it most convince the masses to embrace it! It must find a way to bridge the gap abstract and the actual.

Surrealism and Incremental Innovation

The philosopher Plato argued that ideas are necessary for the physical world to exist, he suggested that the ultimate realities are ideas and that the world as we experience it is but a shadow of those ideas, a dulled down version. It could be argued that NFTs (as they exist today) are too vivid for the world that we live in. To most it is experienced almost like surrealist art. Surrealist art is characterised by its ability to irrationally juxtapose different objects in abnormal settings. Similarly with NFTs, the attachment of a price tag and ownership (based on how rare an item is) on an item that is not rare and its ownership is rarely considered. The mismatch in both instances are uncomfortable.

In order to challenge this view of NFTs we need to market towards the masses in a way that addresses and resolves the concerns that lead people to want to resist them. To begin with it is necessary to dispel with the assumption that everybody ‘wants’, is ‘open’ to and ‘willing’ embrace change. We must identify ‘The Innovation Sweet Spot’

Source: Greenbook.org

For the sake of showing how this can be achieved, we will be focusing on the NFT use case for Luxury Goods Authentication.

In a previous piece I wrote called ‘Luxury’s invisible hand can solve its counterfeiting issue’, I discussed how large the issue of counterfeiting is for Luxury goods companies, I noted how according to HBR “ the estimated value of counterfeit goods is in the region of $4.5 trillion as of 2019, of which counterfeit luxury goods make up for between 60-70%”. I also noted that as upcycling and secondary resale takes off within the luxury goods industry, the issue of avoiding counterfeits and therein authenticating designer goods is becoming increasingly important.

Customers

Luxury goods companies (B2B and DTC Opportunities)
Luxury goods consumers (B2C Opportunity)

Concerns in the market

Luxury goods companies – losing revenue
Luxury goods consumers – mistakenly buying fakes, paying a premium for an imitation

Customer profile/context

Luxury goods companies – historically reluctant to embrace technological change, used to exploiting irrational desires to earn profits
Luxury goods consumers – profile is changing a lot, increasingly consumers are younger, more conscientious, digitally native and looking for exciting products.

Showing Value!

To find the innovation sweet spot that will lead to widespread NFT adoption, NFTs should first be introduced to resolve a pre-existing problem for consumers, therein ensuring that its value is easily understood. For luxury goods companies this could look like introducing NFTs as authentication certificates that are sold as ancillary pairings for highly counterfeited goods i.e. The Louis Vuitton Multicolour Monogram Handbag. Designer brands could create a single graphic image and allocate the right to a piece of it to owners of authentic The Louis Vuitton Multicolour Monogram Handbag owners. Following in the steps of NBA Top Shots, the LVMH could potentially sell unique allocations to the same picture to owners like shares. The total number of NFT certificates available for a graphic would be determined by the total number of physical The Louis Vuitton Multicolour Monogram Handbags created, the exclusivity and scarcity of the NFT would be attached to the ownership of a tangible asset.

Leveraging Existing Habits!

The NFT could at that point become a widely recognisable asset. Some of the most common reasons for buying luxury goods is to treat oneself and also to signal to society that you are in some way affluent. On social media platforms like TikTok, YouTube and Instagram there is a heavy emphasis on staging and showcasing luxury goods. Some argue that it is a habit of those not yet secure in their wealth/riches. Beautifully designed NFTs commissioned and released by designer brands that can be showcased in ‘viewable fashion logbooks’ have the ability to take advantage of the existing habit of showcasing designer goods and also aid in the behavioural change into showcasing digital assets. The ability to share and potentially ‘check up on’ a digital signature has the potential to make the act of ‘authenticating’ on trend.

Reducing Risk!

Beyond the superficial and social applications for NFTs, when paired with tangible assets and a legitimate means to verify ownership NFTs have the ability to reduce crime (counterfeiting). NFTs on their own fail to live up to the expectations around crime prevention, because they are not traded objectively but on the back of “excitement, attraction, temptation, speculative euphoria and acquisitive, possessive sentiment” Mackenzie, S & Berzina,D (2021) To a much greater extent than conventional assets, making them significantly more susceptible to manipulation. The tying of the NFT to tangible assets like handbags, helps to stabilise and regulate the sentiments and hype (to an extent). Stock X is a great example of a platform where trading and hype go hand in hand, though the resale price attached to certain goods may be comparatively higher than people may originally have bought them, the market is dictated by the continuous matching of buyers to sellers as opposed to a lofty auction. The introduction of a NFT x Luxury goods resale platform approved by Luxury brands could potentially stabilise the sentiments and reduce the risk that consumers are being defrauded. The psychological risk (surrounding how people feel) attached to ownership gets reduced, the anxiety around the extent to which the value of an NFT can rise or fall becomes manageable.

This potential NFT application doesn’t explore the full possibilities of the asset but it does familiarity, incremental innovation and the intentional addressing of consumer concerns to ease acceptance by the masses. Through applications like this NFTs no longer feel like surrealist pieces of art, nothing feels aggressively out of place. This is where the baseline for change should begin.

https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp

https://www.tutorhunt.com/resource/10969/

https://www.greenbook.org/mr/market-research-trends/accelerating-innovation-adoption-with-behavioral-economics/

http://fashionetc.com/fashion/accessories/8988-the-most-counterfeited-handbags-and-how-to-avoid-buying-one

https://www.investopedia.com/terms/v/valueproposition.asp

https://www.forbes.com/uk/advisor/investing/nft-non-fungible-token/

https://www.thefashionlaw.com/nfts-explained-what-they-are-and-why-they-are-selling-for-millions-of-dollars/

The yellow brick road to monetisation: Exploring social media enhanced dating as an alternative route for Instagram

In April 2012 Facebook made headlines for agreeing to pay $1billion for Instagram, at the time the price seemed excessive for a business with no obvious route to monetisation. Instagram’s operations were beautiful, personal and delicate. Aesthetically pleasing but difficult to scale successfully as the business gained more users. For Instagram, being acquired offered an opportunity to exploit Facebook’s economies of scale to successfully cope with growing demand. For Facebook, the acquisition offered an opportunity to capture a piece of the ‘photo-sharing market, which it had struggled to maintain a foothold in. Despite the synergies that this acquisition presented for both parties, the major differences in their respective (1) cultures (2) stakeholders expectations and (3)regard toward end-users, impacted how seamlessly these two businesses could integrate. With Facebook becoming the umbrella company, its way of doing business ultimately triumphed. The impact of this victory has been felt by Instagram users Worldwide - through the methods Facebook has monetised Instagram. The delicate balance most users and Instagram’s founders (Kevin Systrom and Mike Krieger) wanted hasn’t been found. Many users express their disillusionment with the platform’s direction, calling for simpler, less e-commerce like Instagram again. And so in this piece, we’ll consider an alternative reality, one where Instagram’s original and organically evolving aesthetic would be more influential in determining its route to monetisation.

A culture clash

Facebook had marketed itself as a business that seeks to ‘connect the world’ through its platform. Using data analytics to learn the behaviours and preferences of its users, Facebook has sought to create a ‘comfortable’ space that reinforced the ideals of its users, ensuring their retention. Instagram however sought to cultivate new high-quality interests within its users. Interests that would over time lead to a cult-like obsession with the product and have users recommending it to others. Instagram’s culture was meticulous, detail-oriented and gradual. “Community first” - The focus had always been on creating a product that users would fall in love with. In contrast, the culture at Facebook was defined by a “religious obsession with growth”, the business was and is famed for ‘moving fast and breaking things’, believing that ‘done is better than perfect, and imitating the competition (to destroy them). These two cultures were at odds with one another. In Sarah Frier’s book No Filter (which tells the inside story of Instagram) she recants how in the early days of advertising on Instagram Kevin Systrom (former CEO and Co-founder) would personally go through the proposed advertisements making sure that they aligned with Instagram’s aesthetics. His attentiveness meant that Instagram users became accustomed to expecting low-disruption tools for monetisation. It was however impractical as the business scaled, and demand for advertising space grew.

Stakeholder expectations

At the time of Instagram’s acquisition, it had approximately 80 million users, 13 employees, 2 co-founders and of course some investors. Facebook however had 1 billion users, approximately 4169 employees, a well-heeled management team, Mark Zuckerberg, Sheryl Sandberg and was about to become a publicly held company. The ability to satisfy stakeholders expectations within their respective businesses varied wildly. With Facebook becoming answerable to investors in the same year it acquired Instagram, it dealt with pressure to justify its investment in the company. The Instagram team had no experience with those kinds of stakeholder expectations. Its responsibility had been only to its community (end-users), employees and relatively relaxed VC backers. This allowed for two things to happen, (1) for the opinions of the employees to matter deeply and (2) for the ‘community first’ element of its culture to flourish. Out of this was born the businesses USP. Unfortunately, Instagram’s USP couldn’t thrive within an ‘at scale’ Facebook, shareholder satisfaction mattered more. Enter stage right * clunky monetisation tools*

Thinking about the End Users

From the very early days of Instagram, the company cultivated communities, hosting mixer events around the world so photography enthusiasts could gather and discuss the best techniques and share filters they created. Instagram leveraged these communities and the fact that its founding team was obsessed with its product to understand user pains and ensure users were pleased with what the business did to resolve issues. To put it simply Instagram listened to its users and enthusiasts from the very beginning. Facebook however viewed its users as products, data points to sell as market intelligence and also as eyes to advertised to. Getting users online, generating sales from them and extending their use time mattered more than addressing aesthetics pain points. This translated into a quick, highly adaptive and generally successful approach to product development. Facebook hasn’t been afraid to take risks and try new tools to grow and maintain its user base. An admirable quality that has served the business well but also alienated users, nowhere has this more obvious than in Facebook’s most recent efforts to monetise Instagram.

Timeline of Instagram’s road to monetisation

To understand the impact here is a timeline of Instagram’s road to monetisation…

December 2012 - Instagram changed its terms and conditions to allow itself to sell any user’s post content to third parties without consent or notification.

November 2013 - Introduction of sponsored posts, Instagram makes its first foray into advertising and opened up the possibility of influencer marketing.

August 2014 - Instagram begins to offer business tools for analytics.

June 2015 - Instagram introduces new advertising capabilities allowing businesses to prompt users to install apps, sign up for email newsletters and go to their websites. Links are now visible in bios.

September 2015 - businesses are allowed to run 30-second video ads

February 2016 - Instagram introduces the capabilities to switch between business and personal accounts seamlessly

May 2016 - Instagram adds new business tools to enable brands to better understand how their content performed. (I.e. demographics, post impressions and reach)

January 2020 - business accounts were given a new inbox tab allowing them to switch between ‘primary’ and ‘general’

April 2020 - Instagram begins to allow the sale of gift cards, food orders and donation tools for businesses.

May 2020 - the ‘shops feature’ allowing businesses to build out fully-featured e-commerce stores on the platform is released. Users are also allowed to monetise IGTV

September 2020 - ‘live shopping’ is introduced to the platform, allowing influencers to talk about a product whilst said product would appear at the bottom of the screen (via a prompt).

April 2021 - Adam Mosseri announces that the platform is evolving to “help creators make a living over the long run” and will launch Creator Shops, affiliate commerce (i.e. commission payments for product sales) and a new “branded content marketplace” to connect influencers and brands. To learn more click here

In June 2021 Adam Mosseri (head of Instagram) said “We’re no longer a photo-sharing app or a square photo-sharing app”. It seems like Instagram’s current road to monetisation means that it will be more like TikTok than the Instagram of old. The case for pivoting towards the TikTok and creator economy model isn’t hard to see, TikTok according to Sensor Tower has surpassed 3 billion total downloads globally. Whilst Facebook having approximately 2.89 billion active users according to Statistia and Instagram having 1.074 billion active users according to Oberlo. In the knowledge of this Facebook Inc choosing to pivot towards the TikTok model to grow and retain its user base can be understood. The creator economy is valued at an estimated $104.2 billion and is likely to have a trillion-dollar valuation in the future, to date most creators have favoured Instagram but there is always the possibility that this could change if Instagram doesn’t play to it. Hence Instagram playing to it. Despite all of this, users are expressing their dissatisfaction with these changes, these features are being thrown at them too quickly, they don’t fit into Instagram’s beloved identity. So what changes, if any do?

Online dating

The global online dating market was worth $2.230 billion at the end of 2019 and is expected to be worth $3.592 billion by the end of 2025 with a CAGR (compound annual growth rate) of 8.26% (according to Valuates Report). Though nowhere comparable to the opportunity offered by the creator economy, online dating could act as a natural medium-term revenue generator for Instagram. In 2017 The New York Times published an article professing “Instagram is now a Dating Platform too”, it discussed how profiles doubled as extended dating portfolios, ‘thirst traps’ seduced potential lovers and direct messaging opened the doors up to a chamber of possibilities. It would not take much for Instagram to tailor these features to suit the aims of its single users. It is key to note that Facebook (Instagram’s parent company) has developed its dating feature, which launched in October 2020 (with a very low profile) has received lukewarm reviews online, though a “pleasant, user-friendly experience. (being) easy and intuitive service.” “The biggest bad with Facebook dating has very little to do with the service itself. It’s to do with the people who use it”.

pictures of the Facebook dating interface

What Instagram has over Facebook when it comes to dating

As mentioned earlier in this piece Facebook has built and retained its user base by feeding them more of what they know and what they like. Leading to most Facebook users existing within an echo chamber, in which their opinions are affirmed by those they interact with. The difference is not embraced, being militant in your beliefs is celebrated. A key component of the Facebook dating service is that it promises to not match you to anyone that you are friends with. Given that the Facebook algorithm exposes you to people that hold similar views to you, there is a strong likelihood that there could be polarity in the matches, I.e. either a perfect match or a terrible match. The polarity that is encouraged and embraced on Facebook does not exist explicitly within Instagram. Instagram lends itself to social peacocking on insta stories and in posts, the user experience/interactions are less insular, users (whether rightly or wrongly) enjoy showcasing and managing their public lives in a palatable way. Not too dissimilar from how people behave on dating sites, to begin with. Many users already use Instagram as an ad-hoc dating service and could potentially appreciate a discrete tool to aid with this.

Instagram also appeals to a younger demographic than Facebook which has been experiencing a decline in younger users, in the 2018 Infinite Dial report showed that 29% of 12-34-year-olds ranked Facebook as their most used social media platform, compared to 58% in 2018. Whereas according to Statistia approximately 60% of Instagram users fall into that demographic.

Instagram also has advantages over the well-established incumbents within the dating market when considering Millennials and Gen Z users. Though dating apps are popular amongst these demographics (with 30% of them admitting to using them), they often do not take the platforms seriously, instead of viewing it as a tool for “confidence-building procrastination” and instant sexual gratification. Instagram has the potential to break this pattern offering a ‘slower’ dating experience/product in which its users could be offered the potential to temporarily follow their potential matches to learn about them. There are already several young dating platforms competing to own the more conscientious social dating space. According to CrunchBase at least 50 social dating companies launched between 2019 - 2021. Startups like; Lolly and Snack which use short (informed) video to help users find potential matches, Feels which market itself as an ‘anti-dating app’ and So-Synched which matches people on Myers-Briggs personality tests. Instagram could repurpose many of its pre-existing features to compete and beat these new players at scale. By using data analytics it gathers about user behaviour to find a more genuine match, its dm, insta story and stigma-free reputation could quite easily cultivate an incredible product. Much of the feedback on the Facebook Dating product interface and features have been positive and so could also be adapted for Instagram.

The introduction of an online dating feature could offer Instagram the opportunity to explore ‘optional’ ad on capabilities within the app. It’s often said that despite the simplicity of the iPhone operating system, no two people use it in the same way. Users are at the point of every update offered the chance to delete features that they do not want to use, Instagram adapting that capability to its app could allow for not only the seamless introduction of online dating but also for users to embrace features and developments at their own pace. The early adopters of features like the Creator Shop could become collaborators in the way those within the early Instagram communities were. Ensuring that users develop that once famed ‘attachment’ to Instagram again.

Today Instagram does an outstanding job communicating the changes it wants to introduce. It observes how the social media landscape is changing and continues to adapt to survive but to truly flourish and make its way down the beautiful yellow brick road to monetisation with all of its users in the toe it must learn to listen and stop trying to be all things to all people at the same time.

Sources:
No Filter: The Inside story of how Instagram transformed business, celebrity and our culture - by Sarah Frier
Instagram Is Now a Dating Platform, Too. Here’s How It Works.
Online Dating Market Size
Zooming In: The Creator Economy Growth in 2021
TikTok becomes the first non-Facebook owned app to Reach 3 Billion installs
Facebook is testing drastic changes to Instagram to make it more like TikTok
Instagram announces new features for creators to make money
The complete timeline of Instagram updates that have changed the way we gram
Distribution of Instagram users
The role of social media in dating trends amongst Gen Z college students

Regulating Big Tech: It’s a human rights thing.

In 1890 Senator John Sherman declared that “if we will not endure a king as a political power, we should not endure a king over production, transportation, and the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade, with the power to prevent competition and to fix the price of any commodity”. At the time, this speech was a thinly veiled attack on the power held by industry titans such as J.D. Rockerfeller’s company Standard Oil. A company which controlled most of the oil production, processing, marketing and distribution in the US at the time. The extent of Standard Oil’s power essentially meant that the company ruled over the US government and all it’s citizens as though they were it’s subjects. It was a monopoly that could not be avoided. Some might suggest that Standard Oil’s influence and power is not too dissimilar to that which is wielded by Big Tech giants (like Google, Amazon and Facebook) today.

Following on from Senator Sherman's speech, ’The Sherman Act’ was introduced, it sought to curtail the power of companies like Standard Oil and ensure that consumers would not be exploited. 130 years later the rules set out by Senator Sherman - though effective over time (as it led to the break up of Standard Oil) - fail to fully anticipate the majesty of today's industrial monarchs (FAANG), who trade in commodities of a new kind. Human experience. We (yes, you and I) are the new commodities, we are sold as data points and as market intelligence to companies across the world as tools to aid to grow sales, engagement, etc. Some argue that this change in product requires us to revisit the rules because the legalities of market structures are no longer clear cut. They are becoming human rights issues. With each of us volunteering (through our subscriptions, cookies and accounts) to be commodities, the litmus test gaging whether the practices of company X can hurt the consumer has become redundant. We would never judge how appropriate the behaviour of a drug dealer is by whether or not their consumers are offered a fair price for a drug that is killing them, so why do we judge the appropriateness of big tech’s decisions to sell and manipulate human experiences as data point by the extent to which they increase efficiencies and improve the user experience ?

Going a little deeper

The predictive products created as a result of big tech, turn our lives into data points, enabling businesses to anticipate what we are likely to do in the future. Equipping them the ability to potentially manipulate our decision making. In the words of Shoshana Zuboff these big tech firms are now ‘trading in human futures’. This raises the question of whether these products in some ways deny consumers of their right to self determination. Self determination, being the right of each individual to make their own decisions without external influences. There are those who may believe consumers (humans) have never truly had the right to self determination to begin with whilst others may see these new products as an infringement on the personal liberties of consumers. Assuming you hold either of these views you might look at big tech firms and assume they are playing god or perhaps a usurper. Both roles are incredibly problematic. Article 12 of the universal declaration of human rights states that “no one shall be subject to arbitrary interference of with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation”. The very nature of the products sold by the likes of Facebook and co violate this law.

Despite this, some still discuss the products born from our data as though they are ‘help meets’, gratifying our needs before we fully realise them for ourselves. Suggesting there is a ‘yin and yang’ element. A symbiosis of thought between us and the algorithms. As idyllic as this might seem, there is, in my opinion something not quite right. As autonomous beings, we should (at our own discretion) dictate the path we choose, the products we buy, at the pace that we choose. Technological convenience is today gifted to us as a Trojan horse, cloaking conversion tools, product suggestions and much more. As big tech becomes increasing sophisticated in monetising our data and influencing us, we are becoming increasing aware of this, via documentaries, podcasts etc the global regulators ought to introduce regulations that are appropriate for the times.

How could we fix it?

Lina Khan, the newly appointed Chief of the FTC’s paper Amazon Antitrust Paradox Khan suggests “the consumer welfare approach (to policing big tech) is unduly narrow… pegging anticompetitive harm to high prices and/or lower output - while disregarding the market structure (it’s influence) and competitive process gives rise to market power” which leads to unchecked exploitation of consumers. Instead of regulators asking whether the actions of big tech companies are ‘unfair to consumers’, the new question should be ‘are the actions of big tech companies disproportionately affecting the decision making abilities of consumers by limiting their choices’? In order to successfully consider this question I think these two things ought to always be considered.

(1) Does the company wield monopoly like power?

Monopoly power is often identified by market share and the ability of the business to charge a premium price for its service or product. Given that the products sold and price setting power held by big tech is derived from its users and the level of engagement they have with the business, it is extremely important to pay attention to market share. According to Senator Elizabeth Warren Facebook “controls 85% of social network traffic, bulldoze competition, and undermine democracy”, such influence indicates the business’ monopoly like power is disproportionately affect the lives of US consumers.

(2) In the face of existing regulation are there loopholes that this company can easily exploit to the detriment of consumers ‘free will’?

To date the EU introduced the GDPR in May 2018 - giving consumers control over their personal data- and Apple (in its iOS 14.5 update) gave consumers the ability to stock big tech and other online companies from tracking them across the internet. Though great efforts, I think they fail to entirely protect consumers. With Apple’s ‘permission slip’, the ability to trace consumers between different websites is targeted however not much is done to address the tracking done within websites/app. In the case of Facebook Inc, the business remains able to track your interests freely while you scroll through it’s websites. With the broadening e-commerce and Pinterest like focus of Instagram, the ability of Facebook Inc to unduly influence consumers remains strong. During a hearing Mark Zuckerberg was asked to explain the extent to which the business’ ‘conversion path’ product which affects consumer decisions, he shuffled around it. On the website it is illustrated as such:

The new version of this limited ‘conversion path’ captured within the Facebook bubble is likely to be just as effective.post (x1) - influencer z story (x2) - explore page (x5) - direct

Facebook unregulated will likely package the ability to more heavily influence consumers within its ecosystem. Any regulation introduced would need to impose so,e sort of rule that attached limits to this type of influencing. I.e. said organisation cannot include more than to non-organic markers on the conversion path.

Once these things are considered regulators become better placed to at the very least begin to judge whether by today’s standards big tech violates our freedoms and antitrust.

Sources
https://podcasts.apple.com/gb/podcast/wsj-tech-news-briefing/id74844126?i=1000527330813
Amazon Antitrust Paradox
Why Frankenstein is still relevant 200 years after it’s publishing
Why Frankenstein matters
Why do we care so much about privacy?
Facebook built a Frankenstein monster. When will it admit it?
Big Tech compliance tracker
Facebook, Big Data and the Ethics of Behavioural Economics
The Curse of Bigness: Antitrust in a New Age

Luxury's Invisible hand can solve it's counterfeiting issue.

In 1947 a copywriter by the name of Frances Gareth coined the fame phrase ‘A Diamond is Forever’, this helped to rebrand the diamonds industry, establish De Beers as an industry leader and led a generation of consumers to deeply associate diamonds with marriage and engagements. The phrase and accompanying campaign was an indisputable success, it is often discussed in business and fashion schools alike till very day. It introduced the idea that a company or industry could build a consumer base and resolve seemingly existential issues it faced in a single sweep. Today we argue that it might be in the interest of well established luxury fashion houses (conglomerates and independents alike) to address the industry’s counterfeiting issue in a similar manner.

According to the Harvard Business Review, the estimated value of counterfeit goods is in the region of $4.5 trillion as of 2019, of which counterfeit luxury goods make up for between 60-70% . The growth in the value of counterfeits is in part due to the increasingly digital manner in which we buy luxury goods. For every legitimate luxury e-tailer, there appears to be hundreds of vendors selling counterfeits of varying quality. Some choose to sell on platforms like AliExpress, others on the likes of eBay or Amazon, whilst the bravest are placing their fakes on secondary resale platforms like TheRealReal. The magnitude of the counterfeiting issue is hard to ignore, we have seen a number of cases taken to court like the Tiffany&Co vs eBay, TheRealReal vs Chanel and most recently Hermes prosecution of two former employees for being part of a counterfeiting ring that made $2.24 million in profits from the sale of high-quality counterfeits. The luxury conglomerate “LVMH alone employs at least 60 lawyers and spends $17 million annually on anti-counterfeiting legal action” (Fontana, Girod and Kralik, 2019). Despite all this nothing really seems to be changing?

In a paper by Bekir, El Harbi & Grolleau (2011) called “How a luxury monopolist might benefit from the aspirational utility effect of counterfeiting?” an interesting reason for this lack of change is put forward. The authors argue that luxury monopolists (LVMH, Kering, Richemont etc) are inadvertently benefiting from the sale of counterfeits in two major ways. The first being, that these counterfeit sales are giving aspirational consumers a taste of the luxury life, in a way not too dissimilar to the entry-level (low quality) items that they sell themselves. Buying counterfeits is in essence ’upscale emulation’. The luxury brands ultimately belief that with time these aspirational consumers will eventually switch over to authentic items. The second benefit is a result of engineering luxury good production and material sourcing in such a way that enables would the brands to drive up the cost of production for counterfeiters and also the amount that these luxury brands can sue the counterfeiters for when prosecuting. The problem with these benefits is that even though they make business sense, they are not sexy and ultimately they do not play the psychological hand which enables luxury goods to generate large profits despite operating in the polar opposite way to other industries.

Take for example the rationale behind the idea that aspirational consumers are likely to consume counterfeits and entry-level luxury goods in the same way. It assumes that the consumer’s decision-making process is driven purely by status, more specifically by the need to mask insecurity about lower social status. By this judgement morality, intelligence and economic value play no part in the decision-making process, we disagree with this across all levels. In regards to morality, the decision to buy a counterfeit is based primarily on the ability of the consumer to dissociate their actions from illegality. Despite campaigns like ‘Buy a fake Cartier get a genuine criminal record’ consumers have been able to sooth themselves with rationals around the economic benefits of spending less and attaining the same status. For consumers whose decision making process is based on the economic value, the probability that they will ever switch over to authentic luxury goods is low. For “highly educated elite consumers (who) reject mainstream status symbols because they did not want to appear materialistic” (Chen et al, 2018) and buy counterfeits, assuming their need for quality is met they too are unlikely to switch over to luxury goods. Considering these outcomes luxury brands are losing against counterfeiters.

Perhaps the best solution to combat this requires luxury goods industry to combine technology, craftsmanship and psychology. It has been said that only a Chanel Atelier can spot the difference between a genuine Chanel bag and a fake, if one is to assume that this is true then surely the likes of Chanel should assume the role of the ultimate authenticator for its good? Though it may not be feasible to send every Chanel handbag that is sold across the world to be personally examined by someone at Chanel, it could potentially be in the interest of the fashion house to digitalise the knowledge of these specialists. By creating a process that employees and potentially secondary resellers like Vestiaire and TheRealReal could use in order to filter out fakes, fashion houses can create an access point for themselves into the budding luxury resale market valued at €26 billion in 2019. Bain & Co referred to the secondary resale market as a “ ‘new touchpoint’ for acquiring younger customers (who could be) educate(ed) and introduce(d) to the wider luxury eco system”. This definition of the secondary marketplace offers a healthy alternative to counterfeits. Luxury goods companies could also realise profits from digitalising their knowledge. For example, Chanel could license out and temporarily accredit secondhand resellers on a product by product basis, requiring these marketplaces to destroy all fakes and update a blockchain ledger every time they come across genuine Chanel product.

The luxury goods industry at large is not famed for its swift adoption and integration of technology so it would most certainly need to partner with companies like Microsoft, Lucidchart in order to kickstart their process mapping. There are also Fashion Tech companies like Entrupy and Fashionphile who are turning authentication onto a science using product knowledge and AI that fashion houses could lean into in order to for the industry-specific knowledge.

In regards to Fashion Houses owning the authentication process on a psychological level, we propose that luxury fashion house play into two things. The first being the affinity and loyalty that some (who buy counterfeits may have) with the brand, its culture & heritage as a tool to convince them that buying these counterfeits translates to them personally damaging the legacy of the brand. The second being the snobbery and status factor. Consumers who buy luxury, either do so for quality, rarity or the status it affords them, consuming fakes offers people the opportunity to portray as being of a higher class. Should a luxury fashion house launch a campaign that offered consumers a social reward for ‘checking the authenticity’ of an item in store, they could in effect engineer a system in which status and snobbery polices and shames the consumption of counterfeit goods. Ultimately stripping the consumers of counterfeits of the status they covet pushing them to buy the genuine pieces. Bekir et all (2013) put it simply “If fakes do not succeed in delivering the status conveyed by genuine items, they can ultimately push aspirational consumers to revise and increase their willingness to pay for some genuine items (Barnett 2005)”. There is room for luxury fashion houses to in essence act as the invisible hand pushing these aspirational consumers to leave counterfeits behind. This will require technological change and a coordinated effort by the biggest players in the industry but it is achievable.

Sources:

https://fashionista.com/2020/01/fashionphile-handbag-authentication-technology
https://link.springer.com/article/10.1007/s10657-011-9235-x
https://www.thefashionlaw.com/an-inside-job-the-2012-counterfeit-bust-that-put-herms-own-employees-under-the-microscope/
https://www.thefashionlaw.com/10-years-after-tiffany-v-ebay-a-new-bill-aiming-to-hold-online-platforms-liable-for-counterfeits-is-introduced/
https://www.thefashionlaw.com/chanel-the-realreal-both-nab-wins-in-latest-round-of-ongoing-counterfeit-lawsuit/
https://www.google.co.uk/amp/s/hbr.org/amp/2019/05/how-luxury-brands-can-beat-counterfeiters
https://www.researchgate.net/publication/305484737_Counterfeit_Luxuries_Does_Moral_Reasoning_Strategy_Influence_Consumers%27_Pursuit_of_Counterfeits
Eight Themes That Are Rewriting the Future of Luxury Goods: http://bit.ly/2UxyfD1

Klarna: Sweden’s tech maverick has a dangerous urban legend brewing. How to kill It before it gets out of hand.

Europe does not do tech well. Europe does not do tech as well as the US, however, there has been one particular area where Europe has been able to strongly compete with and beat the US... Fintech. Revolut’s Nikolay Storonsky was quoted saying “We are three/four years more advanced compared to US companies in terms of product, in terms of regulation, in terms of size. US companies should learn from Europe.” It would have been difficult to find many who would have disagreed with any part of that statement at the beginning of last week but following on from the Wirecard scandal, fintech companies (payment platforms in particular) who have been given free rein by EU regulators are now more likely to question. Given that this blog focuses primarily on the fashion industry, we thought it might be worth taking a look at the European payment giant Klarna. In order to examine its practices, potential flaws and propose a remedy to help the business ward off the heavy hand of EU regulators.

Klarna Business Model
Klarna offers an e-commerce payment service to 205k merchants and a ‘buy now pay later’/ ‘pay in instalments’ service to 85 million consumers. For merchants the beauty (value) in Klarna’s business model is best seen in its ability to; (1) speed up and simplify the purchasing process, (2) increase conversions (the no. of people viewing, adding and then actually buying products) and (3) eliminate costs and risks that the merchant might otherwise have incurred from setting up a financing platform. For consumers the beauty of the service is best characterised by; (1) the ease of access to a line of credit, (2) the fact that it enables consumers to manage payments and (3) it eliminates the likelihood of a card being rejected when shopping.

For both of its customers, Klarna aims to make the e-commerce experience. ‘smoother’, through a type of simplicity that anyone who has ever bought anything online can appreciate. But like any other business, Klarna is expected to return a profit. In search of profitability the business initially partnered with BURBERRY, signing up to be the engine behind the fashion house’s “See now buy now” strategy which aimed to enable consumers to instantly pre-order items as they appeared on the runway and pay for them in instalments (prior to the delivery of the goods). Unfortunately the Klarna based model did not appear to gain much traction, with BURBERRY eventually pairing up with WhatsApp & WeChat before ending the initiative at the beginning of the Ricardo Tisci era. As a result, Klarna sort out alternative partnerships, which would give the business access to more consumers who would feel comfortable using their service. In 2017 this birthed Klarna’s partnership with ASOS, in which both companies agreed to offer a pay after delivery service in order “to create the best shopping experience possible, by empowering customers with choice and flexibility”. In the following years, it gave rise to partnerships with PrettyLittleThing, Boohoo and JD Sports to name a few. In Klarna’s 2019 annual report the business announced increases in YoY volumes (32%) and revenue (31%) respectively with gross merchandising volume amounting to over $35 billion and total operating revenue net $753 million. An incredible achievement, had Klarna been a public company the equity markets would have responded very well.

Assuming the platform were public, understanding the makeup of Klarna’s (end-user/shopper) consumer base (something we are very curious about) would have been much easier. In the absence of this information we sought to do the next best thing, take a selection of 7 Klarna’s partner merchants (ASOS, Boohoo Group [Missguided, PrettyLittleThing & Boohoo], Gymshark, Superdry, Sephora, Hollister & Rue21) and calculate based on publicly available information about their target audiences, who Klarna’s consumers are. By our estimation, the average consumer using the platform based on the above companies is between 18-29 (average adjusted based on the availability of credit for under 18s).

Company	Age Group
ASOS	16-34
Boohoo Group (Boohoo, Missguided, PrettLittleThing)	16-30
Gymshark	18-25
Superdry	16-40
Sephora	18-34
Hollister	Under 22
Rue 21	11-17
Klarna (est)	15-29

These consumers spend £200 on average each time they use the platform and choose to either delay the payment for 30 days or split into 3 payments. Objectively speaking there is nothing wrong with Klarna, it’s consumer base or the companies that it chooses to partner with but when we began to see what the conversations on twitter around the platform look like a trend became apparent...

“These sites like Klarna and Clearpay are a disaster waiting to happen not gonna lie, the way brands relentlessly promote you to pay using them too... people are spending beyond their means and getting into debt, similar to a gambling addiction. They need less positive exposure imo” said one Twitter user

“If you’re looking to buy a house, I’m told multiple Klarna payments on your bank statements are viewed by mortgage lenders is much the same way as payday loans, Have heard from a couple of people who’ve been declined because of this” warned another

“It’s taking all my willpower not to stick £70 trainers on Klarna, let it be September’s problem.” One reflected

“That pay later with Klarna is gonna get me in bad debt, I have a spending problem 😂😂” joked another

Klarna is developing a reputation as a tool that is leading young, often ill-informed consumers into debt. The perception of the repercussions from using this site is extreme, consumers are going as far as comparing Klarna’s service to payday loans and Brighthouse. An FT article published in 2018 asked whether the platform is creating a debt trap. To put it simply for a lot of people there is something worrying about the service. Klarna’s disclaimers are as explicit as that of any other credit card on the market, it goes as far as sending out notifications on its app, via text and across email. Despite this Klarna appears to be holding all the blame when things go wrong for consumers, this is due it’s decision to carve out the business’ USP as owning the entire financing process (as opposed to qualifying it alongside their merchant partners). This decision has hurt their image and will continue to weaken consumer trust in the business. Klarna must adjust it’s offering if it intends to thrive in the long run and be able to boast about the ease with which consumers return to use the service.

Solution

Klarna should agree with each merchandising partner a series of company-specific entry requirements before offering financing. For example, Klarna and PLT could calculate a minimum spending requirement based on a maximum no. of items that a consumer must spend in order to use their service. This could be based on the value of the most expensive item available on the website + £X ( the average price of a garment listed) amount for 3/4 items. On the PLT website right now the most expensive item is a Silver Diamanté Chain Halterneck Dress & Bandana Set on sale for £73 (down from £100), assuming the brand set the rule using the full price PLT and the average price was £25 Klarna’s services would not be available to anyone spending less than £125 on 4 items. By introducing such a standard and keeping it private from consumers Klarna would, in essence, be able to weed out the consumers that some might argue probably cannot afford to use the service. Would introducing such a rule hurt Klarna’s revenue? Yes, but only with merchants that cater to consumers who higher risk. With consumers using Klarna to buy a sofa on Wayfair or a handbag from Farfetch this is less likely to be an issue.

In the coming months and years, when Klarna prepares to IPO the business will have to prepare itself for the microscopic examination of its consumer profiles and the potential icebergs it may hit due to service. It is in the interest of the business to seek out solutions that give investors confidence that the business will not fall victim to negative turn in public sentiment or go bust from lending to clueless millennials and Gen Z’s.

Sources:
https://sifted.eu/articles/revolut-nikolay-storonsky-interview/
https://www.ft.com/content/8c751ac6-bb63-11e8-94b2-17176fbf93f5?segmentid=acee4131-99c2-09d3-a635-873e61754ec6
https://www.klarna.com/international/klarna-publishes-annual-report-for-2019/ http://www.businessmodelzoo.com/exemplars/Klarna