However, in my opinion H&M is not utilizing their potential in the U.S. market. According to H&M's website, they have 2,200 stores in 38 different markets. Their top three markets are Germany, the United Kingdom, and Sweden respectively. All three of these countries have had H&M stores present for 20+ years. In 2000 the first H&M store was finally opened in America, over 50 years after the first store. It quickly grew from solely being on the East coast to being all across the country. Now there are over 200 H&M stores in America, which is more than the United Kingdom with roughly 190 and Sweden with roughly 170.
See the problem yet?
Although the United States has more stores than Sweden and the United Kingdom, they don't bring in as much revenue, why is that?
This is my point exactly.
In just 10 short years H&M Stores have exploded in the U.S. market so much so that there are more stores here than countries who have been exposed to the brand for over 20 years. This could be simply the size of the country, but why isn't the United States in the top three markets? One reason could be that H&M does not offer United States online shopping.
People nowadays are all about convenience. The top three markets, Germany, the U.K., and Sweden, all offer online shopping. Even though they may not have as many actual stores, they make more money. If H&M brought online shopping to the United State consumer, they would be able to tap into a rapidly expanding market. According to TechCrunch.com the E-commerce market is expanding exponentially. By 2012 it is expected that online sales in the U.S. will be between seven and eight percent of the total U.S. retail sales. See the article here.
Now I know there could be potential drawbacks of online sales for H&M in the U.S. because of shipping costs and distribution costs, however I think that overall this is a market that H&M cannot afford to ignore.
Personally, I think it'd be great for them to expand to online sales. They could simply implement the same approach they already have in their other markets. It's not a completely new concept for their brand.
What are your thoughts? Should H&M expand online shipping to the U.S.? Do you shop online for clothing?
I think you have a very good point, H and M should definitely expand to the U.S. with online sales! I think for a while the problem might have been simply one of the costs associated with translating the whole website into English. I know a couple of years ago the website was only available in German and French and maybe a few other languages, English definitely not included. However recently the website has added The United Kingdom to the online store, and with it English as a language option. This is actually really nice as visiting the HM.com online store no longer involves guessing what German words mean. With the addition of the revamped English online store front I think/ hope it is only a matter of time before H and M starts implementing online shopping in America. It would make sense as the American market for H and M is larger than the United Kingdom's market as is stated in your blog.
ReplyDeleteI Think you raise a lot of good points in your post, a company leaves a lot of potential profits on the table by simply avoiding online retail as a viable market, especially as so many businesses are starting to push towards online sales. Many businesses are now hoping to bring retail to the customer instead of waiting until the customer comes to them, which is paying off in a major way. Hopefully as the American market becomes a more major stakeholder in H and M profits the brand will try and reach out to consumers in new ways, thus leading to an online store option.
H&M has great brand awareness and is definitely a favorite among the American "bargain" shopper. One of there top competitors is Forever 21. Forever 21 is also a cheap retailer who offers great products just like H&M. The main difference between the two is online sales. Forever 21 has a large e-commerce business.
ReplyDeleteThe e-commerce industry is one that moves at a rampant pace and H&M is already far behind. They cannot allow this opportunity to pass by them and let other companies in the same market eat up all of the online market share.
H&M finally has future plans to try to snag some of the market share away from other discount online retailers. "Following the launch of its online store in Spain in September 2010, Sweden-based clothing retailer H&M said that they will be entering the U.S. with an e-commerce website in early 2012 (techpinger.com)." Clearly H&M agrees with your point of view and is going to take a dive into the market.
The Internet is the present and will become an increasingly more important part of our future. Businesses must invest in this area of their businesses if they want to remain a profitable company in the near future.