H&M Completes Online Platform Rollout, What’s Next?

Jamie Grill-Goodman
Editor in Chief
Jamie goodman
Excluding Germany, online sales were up 27% in local currency.

Fashion retailer H&M’s turn-around strategy is beginning to show some payoff. Last year the retailer was struggling with its $4.3 billion inventory woes, while attempting to modernize its online sales channel. Now H&M’s CEO Karl-Johan Persson said all markets are running on the same online platform after Germany became the final country to go live.

All our online markets are now on the new online platform and for customers in the German market this means improvements such as faster, more flexible deliveries and more seamless experience across our channels, thanks to better integration between the channels,” said Persson.

Excluding Germany, online sales were up 27% in local currency for the other 47 markets H&M operates in online for its first quarter 2019, according to Persson.

“There’s been a lot of work during the last five years to transition all the markets to the new platform and a lot of investments connected to that as well,” he continued. “And then we have invested a lot in a new warehouse, this new automation and so on. So we have much higher capacity now compared to a year before. And it's in necessary, good investments that will enable good growth for many years to come. And connected to that, a lot of automation in the warehouses as well, which will further increase the capacity. So we're happy with the setup.

H&M’s ongoing transformation work has already contributed to stronger collections with increased full-price sales, lower markdowns and increased market shares, Persson said.

H&M reported a much smaller than expected fall in quarterly profit and shares in H&M surged as much as 15.8% on March 29th as the Swedish group announced it expected sales at discounted prices to continue to fall in the current quarter, Reuters reported.

“Our focus areas are, as we have communicated before, to create the best customer offering for our brands, which includes the assortment and the whole customer experience then for all the brands to make sure that we have a fast, efficient and flexible product flow to secure a stable and scalable infrastructure, our tech foundation and also to add growth by expanding through physical stores or online stores and through digital marketplaces,” he said.

To this end the company announced H&M will launch on India's largest e-commerce marketplaces this year, Myntra and Jabong. The brand is also launching online in Mexico and Egypt in 2019.

H&M opened its first store in India in 2015 and has 41 stores in the country.

“As India’s leading fashion destination for international brands, this partnership will allow millions of online shoppers across the country to access and experience the best of H&M and have it delivered at their doorsteps,” said Amar Nagaram, head of Myntra and Jabong.

In addition, the retailer’s improved loyalty plan will launch in all markets soon, although no date has been given, and will launch in another seven markets this year. There are currently 35 million members and “more services and features will be added” to the loyalty membership plan.

“The rapid transformation of fashion retail continues and we can see that our own transformation work is taking us in the right direction, even if many challenges remain and there is still hard work to do,” said Persson. “The progress we have made in our strategic focus areas confirms that we are on the right track.”

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