H&M Finally Launches Online Shopping in the U.S. after Countless Delays - Information portal

H&M Finally Launches Online Shopping in the U.S. after Countless Delays

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02.08.2013 Количество просмотров 1175 views
H&M HomeAfter several delays, Swedish budget fashion chain Hennes & Mauritz says it has launched its online sales operations in the United States.
H&M opened its U.S. online store yesterday, saying it will sell everything available in its high street stores.

The online store, which was initially planned to open in 2012, will also feature some exclusive clothes that aren't available elsewhere and the company's home decor collection H&M Home. Daniel Kulle, U.S. President for H&M, called the launch a 'significant milestone' for the company.

Retail experts say H&M may struggle to make the kind of profits from U.S. e-commerce enjoyed by pricier rivals, though.
H&M has prospered in the United States without a big online presence and is mindful of the likely impact on profit margins of the high shipping and return costs associated with such a vast country.

However, with more and more shoppers buying clothes from home, the Swedish firm was forced to speed up its online roll-out to capture a slice of the growing market.
H&M has grown fast in recent years in the U.S., it's second-biggest market, but has twice pulled back from announced dates for the online launch, blaming unexpected complexities in setting up an operation well integrated with its stores.
Meanwhile, its main rival Inditex and others such as online e-store ASOS have expanded in the market, while Amazon is pushing further into apparel after EBay prospered with its fashion offering.

'You don't want to lose out on being the port of call for younger shoppers. So H&M should really get in there,' Planet Retail consultant Isabel Cavill said.
Apparel has become one of the fastest-growing online retail segments. H&M has e-stores in eight European countries and says they are now as profitable as its bricks-and-morter shops.
In North America, a quarter of clothing sales will take place on the internet in 2030, up from 7per cent in 2011, Goldman Sachs predicts. Researcher Euromonitor International sees the U.S. online apparel market more than doubling in a decade to $41 billion in 2017.
'Generations of shoppers are growing up for whom the multi-channel is a basic expectation,' said Kantar Retail consultant Bryan Roberts.

H&M has been struggling to work out a viable logistics model in the country, where many shoppers expect free deliveries. 'H&M is low-price, quite low-margin and makes it work by selling very high volumes. An issue with that is very high costs for shipping and, most significantly, returns. It's a particular problem in the U.S.,' Conlumino consultant Neil Saunders said.

Up to half of fashion items sold online are returned. At H&M, a shopper may well buy up to three times as many items than at Zara or ASOS.Analysts place average prices at Zara at least 40per cent above H&M's, with ASOS in between.
H&M would be wise not to charge for shipments in the U.S., consultants have said. One more likely way for H&M to support margins is to focus the website on its pricier garments.

H&M's U.S. online store will charge a $5.95 shipping fee after August 15 and the same again for returns. However shoppers that sign up to its mailing list are entitled to free shipping. All items on offer in stores will be available on the website, said Nils Vinge, head of investor relations at H&M.

There is pent-up demand for H&M online and the launch will make a buzz after the brand became well-known. But for a latecomer to an already crowded market, it may be a challenge to lure enough shoppers already used to other sites.

'H&M will need significant volume. That's absolutely key, and that is going to take time to build. It may take years to get to a good level of profitability, also because of the cost for the infrastructure,' Conlumino's Saunders said.
Inditex and ASOS ship all goods straight from home markets Spain and Britain. H&M's model is one with regional hubs, meaning bigger costs when entering some markets, but shorter shipping distances. In the U.S., it has built a hub for the online business, the running of which it has outsourced.

Bank of America Merrill Lynch estimates H&M's online sales make up about 6per cent of group turnover, which last year amounted to 121 billion Swedish crowns.
Some consultants said that, for an even wider exposure online, H&M should also sell its clothes through one of the big one-stop online shops, along the lines of a recent deal between British discount retailer Primark and ASOS.

Vinge said the chain was focusing on rolling out its own online stores, but did not rule it out. 'We are very very pragmatic. We want to be where our customers are,' he said.
Source:  DailyMail


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