By Nitya Pandit
The Swedish fashion retailer Hennes & Mauritz (H&M) announced a 142% sales growth from its 20 stores across 10 cities in India, over December 2016 and August 2017. With the advancing digitalisation, especially in this growing and constantly changing fashion retail industry, the company has decided to introduce its online marketplace in India by 2018. This is happening at a time when a huge share of sales is happening online globally, and customer preferences are shifting as new players enter the market.
H&M’s online marketplace
The launch of this online store is the result of the extensive consumer demand, characterised by a nearly 3 times jump in the stores’ sales this year. This retail giant already has online stores in 41 countries, and according to the Economic Times, is expected to see its Indian online sales grow by a minimum of 25% next year onwards. H&M is also working towards an integrated version of online and physical stores. To improve the online experience for its customers it is adding faster and increased number of delivery options. Additionally, it is increasing the range of products available online. To ensure that customers have a convenient shopping experience, H&M has also been testing out new store concepts that will have an innovative outcome.
Benefits or disadvantages of online and offline stores
While online shopping platforms provide better choice, convenience, and value, brick-and-mortar stores provide the touch and feel of products and the feel-good nature of the brand. On one hand, shopping online can put customers through the hassles of returns due to preference and/or size mismatches. On the other hand, offline stores lack the personalised element that a customer experiences through the one-to-one customised page of any product online.
While e-commerce is one of India’s fastest growing sectors, it faces some obstacles. The backbone of e-commerce is the internet, and the internet penetration in India is only about 0.5% of the population. Large costs are attached with branding and marketing to attract consumer attention online—companies are burdened with these significant costs unless they break it down to cost per customer (resulting from an increase in consumer volume). Additionally, the sector is seeing an increase in its competitive landscape with more players entering the market. Hence, consumers are benefiting from the huge discounts, offers and other appealing deals will ultimately lead to declining margins for the firms. Companies selling apparel and jewellery online face the challenge of consumers wanting the touch and feel experience before buying the product.
The road ahead
Once the guidelines for the use of drones for civil purposes get fast-tracked by the Directorate General of Civil Aviation (DGCA), India would become the first country that uses drones for delivery purposes. In the near future, we will also see Google provide a ‘buy now’ option that’ll let consumers search for products online and then buy them through a single click. Companies are also focusing on Artificial Intelligence to effectively use technology to improve their standing in the market. The rise of social media will continue even in future.
Featured Image Source: Visual Hunt
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