Online shoppers often fill up their carts and bail at the last minute when the bill comes. Usually it’s because they can’t remember their log-in, don’t have their wallets handy or can’t bear to fill out a credit-card form. A Swedish startup called Klarna has discovered a way to get people to complete more purchases over the Internet: Don’t ask for money up front.
Klarna uses a sort of honor system, requiring customers to enter only their name, shipping address and e-mail account, where they’ll receive a message with instructions on how to pay. There’s also a printed invoice inside the box when their purchase arrives. Customers have two weeks to settle up by entering their credit card or bank account number or by setting up an installment plan.
Offering to ship people whatever they want and trusting that they’ll pay later may sound like a dumb idea, but Klarna claims to have a way to outsmart most anyone trying to cheat them: big data.
Buy now, pay later is just one of the many ways big data is transforming retail, both online and off. Stores that know how to analyze the billions of bread crumbs browsers and buyers unknowingly leave behind are finding themselves at a major advantage over shops that rely on intuition. Big data enables companies to create comprehensive customer profiles, precise product recommendations and one-click checkout.
This article has been extracted from http://www.bloomberg.com/, please click on this link to read the article in full http://www.bloomberg.com/news/2014-06-03/retailers-use-big-data-to-turn-you-into-a-big-spender.html
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