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COVID-19 Insights: H&M Leads the Way in Servicing Customers Online & at Home


COVID-19 Insights: H&M Leads the Way in Servicing Customers Online & at Home

The global impact of the COVID-19 pandemic will be heavy and vast. The contagious nature of the virus means that most countries have had to enforce nationwide lockdowns, close non-essential businesses, and strictly enforce social distancing. Many countries are already subsequently seeing rising unemployment, low economic growth and depleted GDP projections.

Brands are pulling back advertising spending at an unseen rate and projections all point to a lengthy and complicated recovery for most industries. The strain on the private sector is clearly going to be here for a while, and so marketing strategies are changing by the day, with brands looking at different ways and places to market and sell their products.

Home Comforts

A recent Influencer Marketing Hub report has shown that 69% of brands were expecting to decrease ad spend in 2020, with the same study showing 65% of brands have experienced a decrease in revenue for March.

The brands that have seen an increase in sales, or were expected to maintain or increase ad spending, were typically brands that retail ‘essential products’ or products that had seen an increase in demand since the start of the pandemic (such as household essentials, hand sanitisers and facemasks, among others). Some of the fastest growing categories in E-commerce during March 2020 compared to the same month the previous year include: disposable gloves; cough and cold medicine; packaged foods; and weight training materials.

Some of the fastest declining products include: suitcases and luggage items; swimwear; athletic shoes, and gym bags.

In Mexico, Spanish financial technology company Fintonic has published a study claiming that restaurant spending by Mexican consumers was down 280% as a result of the coronavirus pandemic. This resulted in an increase in reliance on home-delivery service apps such as Rappi and Uber, with the same study showing a 44% increase in demand for these types of delivery service apps.

The shift in consumer purchasing trends and increase in demand for more essential items and home-friendly products/services to cater to quarantine needs, means that some brands are feeling much more optimistic about their survival throughout the pandemic. The vast majority of companies, however, are not feeling the same way and decrease in ad spend means that every piece of marketing budget must count.

Marketing Focus Shifting Online

Shifts in operational strategies could spell a new age for industries, with many relying on digital platforms to keep them afloat. Retail clothing brand H&M’s CEO, Helena Helmersson, recently discussed the pressing need for retail to shift to digital and improve online store awareness to compensate for losses due to widespread store closures.

The company has faced an incredible dent and, despite attempts to curb the impact by halving capital expenditure and cutting operating expenditure by 20 to 25 percent, the company still expects to see significant losses in the second quarter. H&M is therefore tasking itself with improving its digital presence, seeing a 17 percent rise in online sales in March compared to the year before. The group is also pushing an expansion of its digital presence into Europe with the unveiling of E-commerce platforms for many of its retail brands including Cos, Weekday, Monki, and others.

The H&M group has also announced an expansion of its digital marketplace Afound into the Austrian and German markets. The platform sells surplus warehouse items from previous H&M group collections at a discounted price and has been a huge success in Sweden.

We can assume that there will be much more digital innovation and evolution coming from the global brand that has over 5,000 stores worldwide in 74 countries.

Eco-friendly shoe brand Allbirds has also adapted its sales strategy very quickly upon the rise of the global pandemic. The company utilised staff from its physical stores to help fulfill demand of online store orders and additionally created interesting customer experiences that utilisedvideo chat features to connect salespeople with customers to explain what was available.

The President of International at Allbirds, Erick Haskell, has said that he believes it to be of the utmost importance to be connected and really listen to your consumer base, saying that: “The more you can be in touch with [customers], the more flexible and nimble you can be if tides shift.”

Securing the Future

Those who can navigate the highs and lows of this volatile period will come out much better prepared and able to face future challenges. It is evident that digital marketing will be the primary area of focus for brands to ensure visibility among consumers, and E-commerce will have to take priority over other sales methods until large capacity gatherings are permitted and infection threats are lowered. For brands that had already planned offline advertising or events, it is important to create innovative digital campaigns that can replace the previously set objectives.

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