Source: H&M’s U.S. website
Can H&M finally become a serious online competitor?
It’s not news that the fast-fashion retailer H&M has been behind the curve when it comes to keeping up with the shift by consumers to purchase more of their clothing online rather than in stores. Yesterday, the chain announced updates to its U.S. site and mobile app that will eventually deliver the changes promised by H&M CEO Karl-Johan Persson during the company’s second quarter earnings call back in June.
On the call with analysts, Mr. Persson said H&M’s goal was to improve the customer experience by personalizing its apps and sites and greater integration of the chain’s physical and digital channels.
Among the new features listed by H&M for its new site and mobile app are visual search, scan & find, rate and review, the #HMxME style gallery, free returns to stores, live chat, payment via PayPal and new shipping options. This fall, the chain will introduce its “find in store” feature that will allow customers to locate items they wish to purchase at their local H&M.
With the new visual search feature, customers can upload images from their phones or from social media to H&M’s site where they will in return be offered a choice of similar styles from the retailer.
The scan & find option enables customers to scan an item in an H&M store to check if the chain’s site has it in a different size or color.
By way of its #HMxME page, the chain will curate and share a gallery of fashion from its customers all over the world.
H&M has been attempting to dig itself out of an excess inventory hole since the beginning of the year. The chain reported its fourth straight quarterly earnings decline in June, and acknowledged that it was engaging in significant markdown activity as it sought to bring inventory levels in line with demand.
Discussion Questions
DISCUSSION QUESTIONS: Which digital feature(s) in H&M’s new website and mobile app do you think will be most appreciated by the chain’s customers? Will H&M’s website and mobile app makeover help it regain its sales mojo or is it too far behind the curve at this point?
Poll
BrainTrust
Brandon Rael
Strategy & Operations Transformation Leader
Gabriela Baiter
Founder, Whereabout Studio
The H&M CEO seems to be saying all he needs to say on analyst calls to maintain interest in the brand. But it is all in the doing. Digital media needs to really express the H&M vision, alignment with customers and the brand. “What we do” always follows “who we are” and though it is too simplified to state it, this is the core that H&M must get to fast. Features and functions hardly matter if there is no basis for a relationship.
If the H&M digital experience is consistent with the in-store experience, then it will act as a natural extension of the brand. Potentially it could evolve into a somewhat meaningful selling channel if executed properly.
The consistent dilemma we are seeing is that retailers and brands are making significant investments in their digital platforms believing that this will be the cure-all for all their assortment and inventory challenges. Digital, along with mobile when done right, is an outstanding platform and could result in expanding the H&M brand reach.
Yet the challenges that H&M is facing are more fundamental in nature. Technology innovation is always crucial, however the brand needs to really assess their assortments and optimize their inventory and overall strategies in order to spark a turnaround.
Compared to rivals, H&M has been poor when it comes to online and digital. It’s not only the functionality of the website and apps that have been lacking, service levels have also been lackluster.
Given the group is now going through a period of slow growth, remedying this is vital. One of the key complaints about H&M stores is that they are crowded with products and hard to shop. A more personal online experience might help to remedy this.
This is an interesting one to say the very least. H&M has always been considered the “cheap and fast” shopping trip, but the mayhem and inventory overload that you experience in-store always gets in the way of that. While I’m glad to see “find in store” and “scan and find” features adopted, these still leave customers on their own. Where are the assisted selling tools that up H&M’s service game while removing excess inventory on the floor? If there was less STUFF, perhaps people would actually be able to find what they need.
These digital and mobile-first enhancements are a welcome addition to the H&M shopping experience. However, adding technology to the mix is not going to solve all of H&M’s problems. Fundamentally, they have what feels like a disorganized experience in their stores, with too much product overwhelming shoppers and making it difficult to find what they want. I also don’t see their CEO addressing product issues on those financial calls — are they sure they have the styles their core customer wants these days? Or are they losing those customers to competitors? The digital enhancements are certainly necessary to bring back the brands appeal to their core shoppers, but the real question is if they have the product those shoppers want.
I tend to agree with Lyle here: H&M’s challenges run deeper than a quick fix through digital functions or enhancements. Challenges are rooted in issues of customer relationship and broken trust tied to product assortment.
Ultimately, inventory problems are a symptom of assortment problems. Until the brand gets a better grasp on what consumers desire and expect from H&M, it will be difficult to rebuild that relationship and fully activate a game-changing digital strategy.
That said, features that create a dialogue with customers (live chat, #HMxME, rate and review) indicate a move towards listening to consumers, so hopefully the beginning of a cultural shift for the brand.
I believe Ricardo was spot on — they have to have their store in order for people to shop there online or off. Since they’ve been behind the eight ball, they will have to move faster and further across both physical and digital commerce just to catch up. Tech, like online returns at stores, should be their tech priority, after they’ve gotten their house in order.