H&M Hennes & Mauritz AB is a Swedish retail clothing company that is known internationally for its affordable fashion for men, women, and children. With 2,776 stores in 48 markets, H&M has been ranked the second largest clothing retailer in the world. Though the clothing company has gained a reputation for being fashion forward, the same cannot be said about its ability to keep up with online shopping demand. H&M currently offers online shopping to customers in just eight of its 48 markets around the world: Sweden, Norway, Denmark, Finland, Germany, the Netherlands, Austria, and the United Kingdom, but none in the United States. This has U.S. customers scratching their heads in confusion and growing impatient. The retailer stirred up excitement back in January 2011 with a tweet that stated:
“Good morning is an understatement! H&M has decided to have online shopping in the U.S. at the turn of the year 2011/2012! Stay tuned for more.”
Unfortunately, two years have passed and H&M has failed to deliver on that promise. The retailer is still “not set up for mail order, phone orders or e-commerce at the present time”. However, there is still hope for U.S. customers. H&M’s 2013 Expansion Strategy revealed: “Investments will also continue within online sales. H&M plans to launch online sales in the US, the world’s largest market for e-commerce.” Business Week also reported that shopping from H&M’s website could happen as early as Summer 2013.
Entering the U.S. online retail market goes beyond satisfying millions of America’s fashion lovers. “The U.S. online retail market is the biggest in the world; research firm Forrester estimates it will reach about $260 billion this year. Taxes vary by state, shoppers expect free shipping, and returns are common”. The process is quite complex and H&M has cited “issues with security, customer service, logistics, and the assortment of items offered” as reasons for delay. But the longer the retailer waits, the more demanding customers become. Not only are U.S. customers looking for the ability to shop online, but they are also expecting the company to have smartphone applications available, too. H&M says they will meet this demand. For investors sake, H&M cannot disappoint because the company’s competitors have already figured out how to engage their U.S. customers in online shopping.
With just a few weeks left till summer, anticipation for the launch of H&M’s online store will grow largely. Having only photo galleries of tasteful, trendy clothes and accessories will not be enough for die hard shoppers this year and if the project fails to launch, there could be dreadful consequences for the company. In ending, some important questions to consider are: Do you think H&M waited too long to enter the U.S. online market? Is this expansion strategy necessary in today’s retail industry? How do you think launching an online store will affect H&M’s competitors? Finally, on a scale of 1-10, how important is online shopping for you? Does it affect the way you shop?
Business Week: http://www.businessweek.com/articles/2013-03-28/h-and-ms-online-troubles-u-dot-s-dot-shoppers-are-still-waiting
H&M Expansion Strategy: http://about.hm.com/AboutSection/en/About/Facts-About-HM/About-HM/Expansion-Strategy.html#cm-menu
Annual Report: http://about.hm.com/content/dam/hm/about/documents/en/Annual%20Report/Annual-Report-2012_en.pdf