Is H&M moving fast enough to become a digital brand?

H&M’s net profit has slid in recent years. The retailer is placing its bets on both physical and e-commerce expansion as well as a portfolio of several new brands to overcome what it hopes is only a minor speedbump.

The ascent of other fast-fashion retailers like Zara, Primark and Forever 21 has led H&M to ramp up its e-commerce efforts. But even that came rather late. H&M only launched its e-commerce operations in the U.S. in 2013, as opposed to Zara, which made its debut in 2011. While e-commerce has so far been profitable for the retailer, it does not guarantee digital dominance.

“It’s easy to see why they’ve seen consistent growth in e-commerce — it’s easy to grow from no base,” said Jason Goldberg, svp of commerce and content practice at Razorfish. “But when they finish their global rollout and get all the pent-up demand, will they be able to grow from there? They are yet to prove that they can build a digital brand.”

That’s not to say that it hasn’t cultivated a robust digital presence. Through its visual social content, a dedicated digital content hub and numerous partnerships including Coachella, H&M has been creating engaging social and digital experiences for its audience. It also seems to have taken a page from J. Crew’s book, with a focus on developing a roster of sister brands like the former’s Madewell.

Ultimately, these efforts are futile if its approach to e-commerce and product pages remains outdated, said Inii Kim, creative director & co-founder of luxury digital agency King & Partners. “While we’re seeing a lot of excitement and benchmarking examples from their new brands — & Other Stories and Cos — the H&M brand itself hasn’t been doing anything particularly fresh or innovative to keep up with its competitors,” she said. “We’re seeing the same things over and over each season — designer collaborations, the same kinds of campaigns, outdated e-commerce and messy and crowded retail experiences.”

H&M must also pay close attention to its competitors, not only the likes of Zara — which itself has begun to prioritize its e-commerce operations over further store expansion — but also Amazon, which has recently started making moves into apparel.

“They’ve had a great run; they are a Goliath in the apparel industry,” said Goldberg. “But there’s a bunch of Davids around them preparing to throw their rocks — and when one of those Davids is Amazon, it can be a difficult position to defend.”

https://digiday.com/?p=171397

More in Marketing

Inside X’s latest, desperate attempt to beguile advertisers

If X has its way, 2024 will be the year it hits the long, twisted trail back to advertiser land, according to the platform’s pitch deck.

How Amazon Prime’s ‘Fallout’ series highlights the power of post-apocalyptic video game IP

To some extent, the mainstream success of the “Fallout” series is a reflection of the massive scale of the Amazon Prime machine. But the consensus among viewers and critics is that it’s a damn good show, too.

Why the New York Times is forging connections with gamers as it diversifies its audience

The New York Times is not becoming a gaming company. But as it continues to diversify its editorial offerings for the digital era, the Times has embraced puzzle gamers as one of its core captive audiences, and it is taking ample advantage of its advantageous positioning in the space in 2024.