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Ultimately, these efforts are futile if its approach to e-commerce and product pages remains outdated, said Inii Kim, creative director & co-founder of luxury digital agency King & Partners.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 “We’re seeing the same things over and over each season — designer collaborations, the same kinds of campaigns, outdated e-commerce and messy and crowded retail experiences.”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.”
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