Rue21 customers can now pay for their online purchases in installments through Klarna, the payments provider announced on Wednesday in a press release emailed to Retail Dive. Payments are collected in four equal parts on a biweekly schedule on orders of at least $35, according to the company website. Customers do not pay additional interest or fees.
"We want to provide our customers with the opportunity to get the fashion they love, whenever they want it, and pay for it whenever it is most convenient for them within their budget," Mark Chrystal, rue21 chief analytics officer, said in a statement. "Our customers have been requesting this type of payment solution, and we are pleased to be able to partner with Klarna to respond to their requests."
Rue21, which caters to young shoppers, operates 698 stores in the U.S. alongside its website, according to the release.
The addition of alternative payment services like Klarna and its competitors, including Afterpay, onto retail sites signals the effort to gain loyalty from a covetable set of younger spenders. Klarna's announcement claims that U.S. shoppers buy clothing and accessories online 10 times per year on average, but millennials shop online 14 times per year and Gen Z (ages 16-24) 18 times per year.
While younger shoppers are making more frequent purchases, they may not be using the same payment methods as their parents. Only one-third of adults between 18 and 29 have a credit card, based on 2016 data from Bankrate.com. Young people are hesitant to take on debt, which perhaps makes Klarna's interest-free plan with a predictable, brief payment schedule attractive. The diversification of payment preferences has led many retailers to expand their payment array to include options like Venmo or Apple Pay.
Klarna has been on the rise lately, building up a network of retail partners, which has now eclipsed 130,000 retailers, including Sephora, Asos and Indochino. Last fall, H&M also became a minority stakeholder in Klarna.
Klarna also announced this year that it would offer payment plans across retailers through a direct-to-consumer app. By offering its own payment app alongside its growing retailer network, Klarna can attract customers from both sides: those who hear about its service independently as well as those who learn of it while shopping their favorite retailer. Rue21, which emerged from bankruptcy in 2017, also launched a buy online, pick up in-store program throughout the chain this spring.