H&M says it needs to “transform and re-think faster” when it comes to digital sales as its physical stores prove sluggish with stronger online sales performance. Technology will be one of the company’s core focuses moving forward.
Fast fashion retailer H&M says it made some mistakes last year as it faced challenges in adapting to shoppers’ fondness of shopping online. This follows ithe company’s grim end of year financial results.
“All in all, we feel 2017 was a year where we made more steps forward and did more groundwork for the future, but we have also made some mistakes that have slowed us down,” said Hennes & Mauritz CEO, Karl-Johan Persson.
“The fashion industry is changing fast. At the heart of the transformation is digitalisation and it is driving the need to transform and re-think faster and faster.”
H&M’s performance during 2017 was a mixed bag, with progress in some areas but also difficulties in others. It delivered 3 percent overall sales growth in 2017, below company expectations, however in the fourth quarter sales dipped by 2 percent in local currencies.
H&M reports its online sales and its newer brands performed well but Persson says “the weakness was in H&M’s physical stores where the changes in customer behaviour are being felt most strongly and footfall has reduced with more sales online.” In addition, some imbalances in certain aspects of the brand’s assortment and composition also contributed to this weaker result.
But, Persson says he’s confident the retail giant can adjust to the new dynamics of digital retail and take advantage of the opportunities it brings. In 2018 and beyond the company will place greater resources on tech advancements and focus on its digital sales, with Persson saying that “online retail is ever-changing and H&M needs to stay on top of it”.
“The digital store is a process that should never settle. The offering needs to be constantly improved and broadened to ensure it maximises engagement and sales.”
H&M says it will integrate its physical and digital stores to offer its customers a great shopping experience with services ranging from click-and-collect to scan-and-buy and online returns in-store.
The retailer will also upscale its supply chain strength to mirror customers’ fast-changing needs, by investing further to get even faster, more flexible and more responsive.
H&M will also invest more in analytics and intelligence. “We see huge potential across the board from assortment planning to supply chain and sales,” says Persson.
“We will continue to invest in our tech foundation. This includes: building scalable, robust platforms; faster development of consumer-facing apps; and broadening our use of technologies like Cloud, RFID and 3D.”
The Swedish-based retailer says its committed to accelerating its expansion across its digital channel, including broadening its assortments, rolling out digital to new markets and linking to new platforms like Tmall for mainland China.
“All in all, we feel 2017 was a year where we made more steps forward and did more groundwork for the future, but we have also made some mistakes that have slowed us down. The industry changes are challenging everyone and this will continue in 2018. The new fashion landscape requires skills and resources to adapt and seize the new opportunities. In particular the ability to take a long-term view and to navigate through some inevitable turbulence,” adds Persson.