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This morning I had not only a notification, but a *recommendation* in my CommBank app to download the new Klarna, “Buy now, pay later” shopping app. Klarna, launched earlier this year, combines its copycat Afterpay technology with discount shopping tool and has leveraged the oh-so-unique: “Shop now, pay later.” tagline. 

Klarna vs Afterpay using the commbank app
Netbank in-app notification promoting Klarna

As a challenger brand, they didn’t need to reinvent the wheel. The market was ripe and they merely needed to create a copy with a slight improvement. With a market already fickle and focused on the instant gratification of rational drivers like “lowest price” and “having it now”, and with the commercial agenda of one of Australia’s biggest banks behind them, they were positive to get cut through. It’s a bet I’d take! 

Afterpay quickly moved from navigating startup challenges of building market trust for new technology to now needing to defend market share. It’s a significant cultural shift to lead through in any organisation, let alone an organisation that’s only 5 years old. The growth trajectory fuelled by the speed of adoption and the ease of new competitor entry could leave no employee idly resting on their laurels. Don’t you just love a pressure cooker environment?

The adoption curve has taught us that if we are clever enough to find our early adopters and nurture them to advocacy, we’ll quickly benefit from the early and late majority. What it fails to remind us is that we have to be the only option to benefit to the highest percentage and failing that, be innovative and nimble enough to respond to customer demands as the market maturity evolves. 

Graph of the diffusions of innovation
Source: Forbes

What would help Afterpay defend as much of its existing “market leader” share as new competitors enter the market? What would help insure them against future disruption

Two things.

Klarna vs Afterpay – The first: They could make Afterpay “difficult to leave”

We’re enamoured by personalisation and ease of use. For the same reason customers love Afterpay (instant gratification, “I want it now.”) they’re quickly taken and influenced by emotional, lizard brain drivers. 

No matter the personalisation tactic, years on the clock is what Afterpay has to leverage over its competition. That is, if it acquired and centralised customer data capture into a customer data platform or other bespoke solution. So how can it leverage this understanding of “culture” to create an experience that embeds customers into their infrastructure? A data-driven recommendations system? Gamification led rewards program? Exclusive partnership with TikTok?

Shopping gif


These tactics that may have previously been on the “some day” list quickly become the priorities when the goal is to protect existing and carve out new market share. Innovation is literally, everything and the only way to stay ahead is to build the infrastructure to support that nimble growth.

The second: Credibility focused market messages

Being the market leader comes with the perk of being the first trusted. By reinforcing messages related to trust help build credibility. It’s important to do this though from an abundance over a lack mindset. Saying “First” or “No. 1” reminds customers there are alternative options, using rational language like “trusted” does the same.

Consumers are smart enough to know that “first” does not mean “better”. Instead, a running list of achievements: “5 years, X merchants worldwide, $X transacted” would imply that which only a large, trusted corporate entity could stand by.

A little narcissism in advertising has its place when you’re the market leader.

Whatever we decide to do, we must remember not to nod to the competition. Only challenger brands mention competitors when they have only share to gain not to lose.

Other implied ways to maintain “leader” status is to focus on #1 rankings and social proof (App Store, Google).

Klarna vs afterpay battle with afterpay sitting number 1 in the app store
Afterpay displaying zero difficulty with their ability to drive social proof. a 4.9 for over >300,000 ratings? Nailed it.

In some cases this may mean running a targeted promo (at a loss) to lower the barrier to entry and inject new merchants into the store. Be sure to run an algorithm to prioritise which merchants are onboarded first. From understanding implementation impacts that slow teams down (such as merchant CMS and POS) to lifetime value for industries; it will do us well to know that computers make these decisions better than we can. 

Of course, for all the pressure and reactive scrambling that comes with new competitors entering the market, there are a number of positives too. New competitors bolster awareness for the offering as a whole. Think about it as though you’ve just doubled your “awareness” based advertising spend. With this, a focus of recalibration your marketing mix investment to focus more on “engagement” actions (like remarketing) is a must. 

Read: The one marketing attribution view you need to win over the boardroom & measure the effectiveness of your marketing mix 

What we’re left with is a friendly reminder to; make the most of that adoption curve when we’re first to market, invest in a market defence strategy by focusing on personalisation and ease of use and continue to innovate beyond the initial offering to carve our new markets. 

It’s then and with a truly data driven, agile culture, that we’ve truly insured ourselves from disruption.


Does anyone still comment on blogs these days? If you do, tell us: what do you lack visibility over that could be the difference between effectively defending your market share from disruptive competitor. Let us know where you stand when it comes to Klarna vs Afterpay!

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