H&M Group is a global fashion and design company. From its beginnings in 1947 in Västerås, Sweden, the group now has more than 4,000 stores in more than 75 markets and online sales in 60 markets.
Last year, H&M demonstrated enormous resilience in a competitive global fashion market, using digital transformation to drive growth. The retailer reported a 28% year-on-year increase in operating profit to £1.2bn alongside a 1% rise in net sales to £17.1bn. Notably, 30% of total sales originated from online channels, reflecting the success of its omnichannel integration.
What’s behind its success?
H&M’s digital strategy largely revolves around unifying physical and digital retail. The company invested heavily in tech in 2024, prioritising AI, big data and cloud technologies to enhance supply chain agility and customer personalisation. A hybrid organisational structure – combining product teams and platform thinking – enabled faster decisionmaking, with AI-driven demand forecasting reducing overproduction risks, according to its annual report.
Marketplace expansion and localised ecommerce
To penetrate high-growth markets, H&M has been expanding its digital footprint on platforms like China’s Douyin and India’s Ajio, contributing to a significant sales increase in local currencies during the last quarter of 2024.
The revamped online store featured AIgenerated styling recommendations and it’s been reported that this boosted conversion rates by 14%. Machine learning algorithms allow the app to curate collections aligned with regional preferences and a team of more than 200 data scientists work on algorithms to increase order values by things like size recommendation.
Sustainability as a market differentiator
Sustainability is in H&M’s DNA. The group claims to be the first fashion company to launch a garment collecting initiative worldwide (in 2013) and has, through its investment arm H&M CO:LAB, invested in companies that develop technologies to enable textile recycling.
Last year, 85% of the materials the group sourced for its commercial goods were either recycled or sustainably sourced. There is an aim to reach 100% by 2030.
Blockchain-enabled traceability systems are now in place tracking 78% of raw materials and AI is being used to optimise logistics to reduce carbon emissions. The “Looop” recycling system, available in most of the group’s Scandinavian stores, reportedly diverted 1,200 tonnes of textiles from landfills in 2024.
The group continues diversifying its portfolio with the planned 2025 launch of ARKET in Athens – the Nordic design brand’s first Greek physical store. This expansion aligns with corporate efforts to capture the premium lifestyle market, complementing H&M’s core fast-fashion operations.
ARKET’s Stockholm-rooted philosophy of “everyday beauty” is delivered through minimalist clothing, homeware and vegetarian cafés.
It is hoped the launch will strengthen the group’s positioning in slow-living markets and will be supported digitally through localised ecommerce adaptations, including Greek language product descriptions optimised via the retailer’s shared AI translation tools. In the words of Daniel Ervér, CEO, “Our diversified supply chain gives us the flexibility needed to mitigate negative external impact in different markets. This, together with our business idea – fashion and quality at the best price in a sustainable way – creates a strong resilience and positions us well for growth in the global fashion market.”
This feature appears in the Nordic Fashion 2025 report. Pre-register and get it straight to your inbox upon release.
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