First Published on
- Fast-fashion retailer H&M has taken an investment stake of less than 1% in Swedish fintech company Klarna for $20 million, the Financial Times reported. Beginning next year, Klarna will provide both in-store and online payment services for H&M, beginning with 14 European countries, including the U.K. and Sweden, according to a press release. The partnership could expand into the U.S. and Asia, according to the Financial Times.
- By integrating payments across H&M’s channels, the goal is to provide customers “a seamless, personalized and engaging shopping experience,” the press release said. The new capabilities will involve frictionless mobile, in-store and online payments and will simplify deliveries and returns. It will also allow shoppers to determine when and how they pay, including try-before-you-buy services.
- The next generation of the H&M app and H&M Club loyalty and payment program will include these new features, the companies said.
Facing a declining stock price and following a 10-quarter same-store sales slump, H&M has been moving aggressively throughout 2018 to bolster technology and merchandising. In March the company reported declining profits because of “weak sales development as well as higher markdowns,” but CEO Karl-Johan Persson predicted 25% sales growth for the rest of the year. The company has refocused on e-commerce and refined its merchandising mix and store count, even closing stores so as to expand on Alibaba’s Tmall.
The company is using big data and artificial intelligence to customize the assortments in individual stores. H&M wants to reduce markdowns by using algorithms to analyze store receipts, returns and loyalty-card data, and is testing the technology in a Stockholm store. In August, it announced the roll-out of a new e-commerce site and mobile app, equipped with visual search capabilities specifically for the U.S. market. H&M is testing voice interactive mirrors at its New York City flagship store, which offer selfies, style advice and discounts via QR codes.
The retailer is also investing in its supply chain by making it faster, more flexible and efficient through the use of proximity sourcing and automated warehouses. H&M plans to bring RFID to 1,800 stores in 2019. Earlier this year, it announced the launch of a new brand called Nyden aimed at Millennials and their increasing rejection of fast fashion. This follows the introduction last year of stores with a broader range of apparel for men, women and children branded as Arket. These stores also include home goods and some have cafes.
H&M is investing in advanced technology that spans its online and offline channels, products and support services such as payments. Now it has invested in Klarna, which is known for a technology that allows customers to arrange for financing at the point of sale, TechCrunch notes. For H&M, the retailer hopes the partnership will smooth out and streamline its payments options, delivery and return processes.
“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,” H&M Head of Business Development Daniel Claesson said in the release. “This partnership will bring tailor-made payment solutions to our customers and accommodate evolving shopping patterns and needs.”