TECHNOLOGY

Fast-fashion retailer makes a big move to merge online and offline experiences

BY Deena M. Amato-McCoy

H&M will play a bigger role in its evolving digital experiences — including payments.

Through a partnership with payments provider Klarna, the fast-fashion retailer will further integrate its digital and physical stores to deliver a seamless, personalized and engaging shopping experience. The partnership will also encompass digital payments in-store and via its app.

By connecting all touch-points, including the H&M app and H&M Club, the company’s digital loyalty program, the retailer is merging in-store, mobile and online payments, simplifying deliveries and returns, and supporting the company’s “try-before-you-buy” “Pay Later” service. The goal is to create a relevant and convenient experience across 14 H&M markets.

The U.K. and Sweden will be first regions to get the technology. Both are expected to go live in 2019, according to the company.

“We want to make it possible for customers to move freely between the various channels and choose how they want to shop and experience our offering online and in-store,” said Daniel Claesson, head of business development H&M Group.

“This partnership will bring tailor-made payment solutions to our customers and accommodate evolving shopping patterns and needs,” he added. “This includes the possibility to ‘try before you buy,’ which is very relevant to online fashion retail today, and to pay with their mobile phone directly through the H&M app both in-store and online.”

Further showing its commitment to the technology, H&M group is investing in Klarna. The deal will enable the retailer to contribute to the ongoing development of technology.

“This partnership is rooted in a shared obsession about just how good that shopping experience should be,” said Sebastian Siemiatkowski, CEO and co-founder of Klarna. “Together we have worked hard on developing a unique solution for in-store and online that will delight customers, drive economic value and build loyalty.”

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TECHNOLOGY

Online holiday spending to increase by double digits over last year

BY Deena M. Amato-McCoy

Black Friday and Cyber-week promotions will be paramount in driving this online holiday spending even higher than last year.

Digital holiday sales are expected to increase by 14% from last season, growing from $133 billion in 2017 to $151 billion in 2018. Many of these sales will happen early in the season, and will be largely driven by promotions, according to early findings from Forrester Research’s holiday retail forecast.

According to data, more than one-third of the year’s e-commerce sales will stem from the holiday season. In addition, online holiday retail sales will account for over 32% of total United States e-commerce sales in 2018.

During this time, U.S. online shoppers are expected to spend an average of $785 each, which is 11% more than the 2017 holiday season.

“In the U.S., e-commerce during the months of November and December will account for 20% of overall retail sales. This is a higher concentration of online penetration compared to the other 10 months of the year,” Forrester’s principal analyst Sucharita Kodali said during Forrester’s podcast, Retailers, Don’t Give Customers “Socks” This Holiday Season.”

To grab this wallet share early, many companies will offer more Cyber-week and Black Friday promotions.

“Interestingly, only one-third of holiday sales will happen in December, while two-thirds will happen in November,” she added. “That is an amazing statistic as these sales will push much activity, and have conditioned shoppers to behave very differently. A lot of that shopping is shopping for self. These might be big purchases you have had an eye on, and you want to make sure you’re getting the most value for your money.”

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Amazon
TECHNOLOGY

Amazon shifting focus to exclusive brands

BY Marianne Wilson

Amazon is starting to compete with itself in a few categories.

Private brand expansion has been a major priority for Amazon, with several new labels being introduced every year. But the online giant is now slowing its private brand expansion to invest in a number of Amazon-exclusive brands, according to a new report by e-commerce analytics company One Click Retail.

Unlike Amazon-owned private labels, these brands are owned by manufacturers, such as Perrigo and First Quality, and still benefiting from the high visibility that comes from being an ‘Amazon Brand.’ Basic Care, for example, launched in August 2017, is owned and manufactured by Perrigo. Basic Care over-the-counter medicine is the Amazon-exclusive alternative to Perrigo’s own Good Sense brand, and as of the third quarter, has now surpassed the latter in market share on Amazon.com. Basic Care controls over 15% of OTC sales, while Good Sense has dropped from over 20% in January to as low as 9% during the third quarter.

“This illustrates the competitive advantage of being an Amazon-exclusive brand, giving manufacturers a significant boost to their visibility compared to other brands (even their own) by being labeled as an Amazon Brand,” said Peter Andrews, director of insights at One Click Retail.

The diaper category has served as a laboratory for Amazon’s private label strategy. After some initial failures in this category, Amazon found success with the Mama Bear brand, which grew in sales by over 40% from the second quarter of 2018 to the third, reaching average weekly sales of approximately $200K. While Amazon has continued to show their commitment to Mama Bear diapers, supporting them with a series of promotions in mid-July and early August, Amazon has also partnered with First Quality to introduce a new line of Amazon-exclusive diapers. Earth+Eden, owned and manufactured by First Quality, is a brand new line of baby diapers available exclusively on Amazon.

First Quality also produces Cuties, a premium line of baby diapers which has struggled to compete on Amazon against larger brands like The Honest Company. Earth+Eden shares many design and marketing similarities with Cuties, but benefits from the competitive advantage of being an Amazon-exclusive.

To read the One Click Retail report on the evolution of Amazon’s house brand strategy, visit The Amazon Effect: Private Labels and Exclusive Brands.

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