Monday, October 3, 2022

H&M has recovered from the pandemic in three ways

H&M

Covid-19 has hit the fashion industry hard over the past two years, but H&M, one of the world’s largest clothing retailers, began a “robust recovery” last week as full-year profits jumped into the year. Nearly seven times increased to November 30, 2021.

H&M is now focused on growth and chief executive Helena Helmerson has ambitious plans to double the group’s sales by 2030 while halving its carbon emissions.

retail gazette Looks at the ways in which the fashion retailer has managed to bounce back from the effects of the pandemic.

investing heavily online

H&M started investing online before the pandemic, but it ramped up its efforts when Covid-19 closed stores around the world.

The investment has paid off. Online sales in constant currencies at H&M accounted for 32% of the retailer’s total sales, up 24% year over year.

But what did you invest in it? H&M says it was important to create greater efficiencies in stores, online and across the supply chain.

“For ‘Order clothes online,’ it actually took a jump of 25 positions to reach seventh place on the Google results page.”

Helmerson said last year that “speed and flexibility” was a big focus. “We want to be more flexible and accelerate the use of AI when it comes to customer demand. We want to learn more about what customers want and respond to.”

H&M is also using its stores to improve its online operations and has started catering online stores from its stores.

Online retail expert Martin Newman says H&M has rolled out various technology-based initiatives that have empowered consumers to shop, including click-and-collect and scan and buy, from its app.

These investments have made a big impact in a relatively short time frame, says Claire Harris, senior vice president at business management consultancy Proxima.

“The ability to combine the convenience of online shopping with the interactive benefits of an in-store experience is truly the holy grail in fashion retail and H&M is leading the way in this regard with mobile app features such as barcode scanning, visual search, and In-store stock checking is available through its in-store mode,” she says.

Nick Boyle, director of SEO agency The Audit Lab, believes H&M’s savvy online marketing also played a part in its recovery.

“We can gain little insight into their focus when analyzing organic keywords for UK websites, which are over 12,000 organic keywords,” he explains.

While Boyle points out that the retailer ranks strongly for local search terms such as ‘clothing store near me’—for which, he explains, H&M is actually number one—it recently ranked as the number one for omnichannel search results. rating has been increased.

“For ordering clothes online, it actually took a jump of 25 positions to be ranked seventh on the Google results page,” they highlight. “This indicates that there is some serious SEO going on behind the scenes to gain more visibility and, in turn, conversions.”

Attracting Gen Z Buyers

H&M has long focused on sustainability, launching its sustainable conscious collection more than a decade ago in 2010.

It launched its sustainable initiative late last year with a PETA-approved vegan collection, and in February began offering second-hand products through SellPi, the resale platform in which H&M holds a majority stake.

It has also used more sustainable fabrics to make its clothing and has invested in sustainable materials tech firm Anantha Fibers.

A retail expert says these initiatives are helping H&M transition into more consumer conscious consumption.

“Although their entire range is not sustainable, they are also producing products that use organic cotton and recycled polyester. They also offer in-store recycle bins that encourage customers to play their part in driving sustainability,” he says.

“Their move to become more sustainable is helping them win over more Gen Z and millennial consumers who want ‘less guilt’ when buying fast-fashion.”

H&M's PETA-approved vegan collection is an animal-friendly fashion collection, approved by the animal rights organization PETA.

Retail analyst Nelson Blakely says H&M has been smart by investing in sustainable areas that customers are buying into. “By investing in resale to help drive sales, and being able to sell items to customers more than once, makes perfect business and environmental sense. The resale market is growing, and as more fashion consumers second Wanting to buy hands, H&M is reflecting the mood of its millions of customers,” he says.

The group plans to invest about £240 million in more sustainable materials and construction methods to help it reach its goal of halving its carbon emissions across the supply chain by the end of this decade.

However, Kathryn Erdley, founder of The Resilient Retail Club, warns that H&M should be wary of the growing number of consumers who are asking whether a fast fashion company can really be sustainable.

“With a large number of customers claiming to be skeptical about the retailers’ sustainability efforts, it will be interesting to see if they will be able to convince customers that they are indeed a sustainable business,” she said.

Harris argues that H&M has found a “magical formula” to appeal to today’s value conscious consumers, while also taking the lead on sustainability.

“H&M is linking this to its customer experience through its ‘Conscious’ rewards program,” she says.

“The scheme rewards H&M members by giving them points on their rewards cards for making sustainable choices, such as using their own bags or recycling clothes through an H&M-owned program.

“With over 120 million members in 26 markets, using Rewards is a smart move in building a loyal community, while also making progress toward the retailer’s own sustainability goals.”

building an agile supply chain

Creating an agile supply chain that was able to adapt to consumer behavior that was radically different during the pandemic has been critical to H&M’s recovery.

Eardley explains: “During the pandemic, there were very clear variations between what customers were looking to buy.

“At some point it was all about loungewear, then when things started opening up, people wanted to buy clothes for the occasion, and then it went back to loungewear when the lockdown was restored.

“H&M has been able to be agile, and adjusting what they are offering the customer has helped, in turn, drive more full-price sales and reduce their markdowns.”

“H&M has been able to be agile, and adjusting what they are offering the customer has helped, in turn, drive more full-price sales and reduce their markdowns.”

According to its website, H&M has “strong, long-term relationships” with its suppliers that are based on “mutual trust and transparency.” It has clearly paid off.

Retail experts agree that H&M has gone back to doing what it does best, “creating on-trend, affordable fashion” and has a supply chain that enables it to do so.

“By improving their supply chain and its efficiency, they are able to meet consumer demand for more regular updates and declines in their range.”

Those three important pillars have helped H&M weather the storm of COVID. Now with mediocrity on the horizon, those same three pillars should help H&M as it moves toward its ambitious 2030 goals.

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Nation World News Desk
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