Sustainability of H & M
The business advantages that have been leveraged in the retail company are the main topic of concern in this write up. How business excellence has increased due to the effect of Information Technology will be mentioned in the forthcoming points. The company operates in around 5,000 stores in around 70-plus countries and they claim that they use 65 % of sustainable materials. Therefore the company trust that they will reach a target of producing 100 % of the sustainable products by 2030. This company that I am talking about is Stockholm based retail giant H & M. On the other hand, after the identification of Informational Technology use in H & M, how the company has exterminated business issues will be mentioned as well. In the last analysis, the two concepts concerning IT infrastructure and e-commerce will be further focused on as a concluding discussion of this write up.
Information Technology integration of H & M in a present business environment
The fast-fashion retailer, H & M due to their profitability losses, has decided to undertake tech support. The recent years have been committed to the fast movement in supply chain operation in H & M as well.
The android application of H & M has a visual search option. After tapping the camera icon on the top right corner of the application, one can snap or upload a photo from the gallery. After this, click on the search button to see an appropriate version of clothes that are in stock.
Tap the more menu (IOS) or the top left menu in Android and then activate In-store Mode. After this process, choose the store you wish to access. One can use the map view and lists as well to find the nearby stores. In the search field as well, one can search for a specific store. The store availability of the clothes will be found through the "Find in-store".
A climate-positive value chain is also the goal by 2040 that they want to reach by decreasing greenhouse gasses more than it emits. More specifically, "The Looop” is the system where the garment to garment recycling machine works. In the system, customers can see the old garments transform into a new ones in front of their eyes. This system is present in the Stockholm stores as a form of material innovation. On the other hand, the "steering" mechanism is also one of the important parts of their business where sustainability becomes a natural part. In this particular department of sustainability, the global sustainability steering, and development manager, Vanessa Rothschild works in an integrated manner. The sustainability team of Vanessa Rothschild works on increasing awareness of circular business models. They are setting the business model in such a manner that it integrates into the core of the H & M group.
The circular ecosystem and the circular business model that they believe they are reaching out to, comprises circular products, a circular supply chain, and a circular customer journey. On the other hand, Renecell is the company where H & M has invested in. This investment is useful from a sustainable perspective because the company makes materials called circulose which they made out of worn-out clothes. In this manner, the H & M group takes the help as well which is quite inevitable. There are examples such as recycled fabrics and unveiling a 45-piece collection. In the product range, you may find flouncy polka-dots, explosions of pink pleats, floor-grazing skirts, a faux fur coat, dramatic capes, a moiré pajama set, cat-eye sunglasses, and shimmering baubles.
On the other hand, cellulosic fibers are made from wood pulp or hard-to-recycle materials like carpets are used by the group as well. The collaboration with Reprieve Our Oceans company also helped H & M to produce polyesters which are made from plastic water bottles.
Therefore, amber cycle is the sustainable product-making company that the H & M group has collaborated with to make a pair of flared pants bedecked with strap details. In this particular company, polyester and poly-blend materials are recycled. They take the old T-shirts and cook them at a high temperature. Similarly, Vegea is a company that makes leather-like products through grape skins, stalks and seeds. This is the company that helps H & M to produce vegan materials for their cloth-making process.
Through all these collaborations, a circular clothing economy can be generated in the future. This retail company has united both the assistance of Artificial Intelligence (AI) and also big data. Unwanted inventory, bad product cycle and predicted market needs are one of the reasons behind such an inclusion. They also use AI and 3D technology to understand the customer needs so that they can produce the right products at the right time. Since these factors have created distortion and bad purchase decisions for the company, H & M has integrated the big data tools to analyze the returns. For example, cutting the prices was one of the instances that the company faced before integrating this Information Technology software system. This previous action of cutting the price was initiated with the intent of clearing out the unsold inventory in their 4,288 H & M stores. Now in the present business world, this retail company has used big data support to tailor the merchandise of each of its stores. At the same time, they have been able to use the AI tool to analyze the receipts and loyalty card data in online purchases as well in the stores.
On the other hand, the "loyalty customers" of H & M have been given the support of free shipping, returns and anywhere delivery expectations. This has been mainly possible as the company has invested in automated warehouses. It has encouraged 90 % of the European markets to be given the quality products at their disposal when they need them (Marr, 2019). Along with RFID tech and algorithm of data, the warehouses and the loyalty programs of the company are run. Hence, this feature of the warehouse of H & M can be termed an automated warehouse. In the year 2018, operations concerning augmented reality have been propelled as well by the company.
For example, Monki x HoloMe is a human hologram presented in the application of H & M. This human hologram is shown to the customers whenever they choose a product for themselves. The customers can view their garments in a manner that is represented as a human form with the assistance of AI. They have used the aspects of Human hologram in augmented reality.
At the same time, RFID technology support has enabled the customer to find their preferred items from a physical offline store. This technology not only enabled the customers to choose the best items that they might like by the algorithm data, but it informs the availability of that product in the nearby store. This feature of the technology is present in the company application and is known as the "Find a Store feature".
At the same time, not only the purchase behavior of the customer is measured and weighed down astutely but the innate behavior and attitudes are analyzed, and then based upon that they recommend products. Hence, it can be stated that the Data and AI algorithm have been successful in predicting the market and the likes and dislikes of the present customers.
Since, it is stated that before the year 2018, the action related to merchandise and online sales was poor due to bad purchases, they have made an oath to create an effort in the digital realm. Due to such commitment, in the year 2018, online sales have outperformed 21 % of sales growth in all the local currencies. Thus the global roll outperformance and also the digital marketplace of the company have outperformed the other markets. Since, the digital aspects of AI, AR, and big data have been integrated; the company has excelled in all its 71 markets.
Instances of problem-solving in H & M by using Information Technology
The brick and mortar supply-demand has recently increased in H & M to a great extent and due to these factors, the company has felt supply shortages.
The products are sourced from 275 Bangladesh factories and where around half a million workers work. The product description areas of the H & M website have a "product sustainability tab" and by clicking it, one may find that they are made at Jinnat Apparels & Fashion plant in Gazipur, Bangladesh. This detailed description of the areas where products are manufactured is nothing but the "consumer-facing transparency layer" of the company. But it is not shown in the app the detailed descriptions of the workers' wages at individual factories and the description of the pricing structure. The pricing structure availability could specify in what manner the labor costs are calculated. The transparency layer does not guarantee a good labor condition by any means. These transparency efforts caused them to invest a lot of money annually and the chief executive declined to say how much is it that they invest. This practice causes them to increase short-term profits for the long-term performance. This is how they put out their level of transparency to the consumers at a large volume. Moreover, the number of factory workers that work in that store, materials and recycling details of the products, and the name of the supplier or authorized subcontractor are all found in the description as well. However, the tab does not show you the details about how H & M makes 400,000 pieces (roughly 110 tons) of clothing daily. The product price tag can also be scanned through their application. Moreover, they have been unable to deduce such a demand from their customers. The merchandise has been disintegrated and many stores of the company have fallen short to mitigate returns and inventory decisions. All have been caused because of the fact of failure in the prediction of inventory, customer behavior, and so on. These areas are measured and identified by H & M when the supply chain operations have proven futile. Therefore, lack of productivity and shortage of supply has compelled the company to get assistance from both AI-related algorithms. The product assortment was slower which was revived by the big data assistance. On the other hand, the supply chain was much slower as opposed to Zara at the beginning times of technological operations. It has been strengthened with the help of inventory aspects in AR technology. The trends that are in the present moment of the fashion market are less likely to be predicted since there was no perfect tool for such an assessment. Hence, as a result, H & M had trouble with the fragmentation of supply chain operations. The rapid shift in customer taste has hardly been analyzed by H & M. The products which are at the stores that have not been sold have been revived by the inclusion of trending activity. Merchandising systems that help the customers in the store have been integrated with the technological support of AI and thus present the company has met the gaps and is doing quite well.
Evaluation of sales growth
The stock move is an important measure for the investors as the H & M group shares have just achieved 10 % growth during the tenure of Persson. Sales growth has doubled investment to 1.1 billion dollars. Helena Helmersson has claimed that they are more focussed on investment areas of sustainability, supply chain, and technology. The global profits dropped by 17% in the year 2020 and more than a third of their total stores were closed due to the effect of the pandemic. After the stores were reopened, the sales in the local currencies jumped to 75%. Moreover, in local currencies, the net sales have increased by 8 % which is around 56 billion kronor (6 billion dollars). Hence, presently, their revenue growth exceeds them among the top three brands in the world. Over the past year, shares in H&M have gained more than 35%, beating the OMX Stockholm index, which is up 19%. The actions related to branching out to sub-brands have also been adopted by H & M group. They have branched out to units including COS or Arket, which aim at a wide-ranging shopping experience, selling everything from home-decoration trinkets to clothing. They also sell make-up like candles and flower pots. There are other brands of H & M that include H & M home, Weekday, Monki, Cheap Monday, and Afound. The employees of the company are around 155,000 people. The cross-country sizing conversions which were never analyzed in the H & M store before are now analyzed since this has been an issue for the customers. The customers are also very conscious about price when purchasing the H & M clothes. Despite the emphasis on kids' wear, H & M has increased from $ 23.90 to $27.04 in the year 2017. This increment has been identified by the H & M customers and they have claimed that the price ranges for normal jeans are quite low in Zara while they are this much higher. Hence, the tools integrated into the AI algorithm and big data analyzed these factors and solved the issues that are in the mind of their big market customers. They have been able to collaborate with both Alexander Wang and Kenzo and enticed the attention of the customers to a greater extent with the technological support. Since all the aspects of the brand that are present for H & M are showcased in the online ad function, the improved status of the technology was required. Thus, they have devised digital function tools such as image recognition in their online application. This is adopted as the best tool that helps the customers to choose the right products at an affordable price. Since the algorithm that is set in the application of the company analyses the customer behavior and purchase decisions, it also helps to manage and recommend items that are convenient for that particular person. The cost-related issues which were present during the previous years 2014 and 2017 are no longer present in the current era of trends and fashion. Omnichannel shopping experience with technologies such as zero waste design, 3D fashion design technology, live chats, and usage of data analytics have integrated in a dapper manner in the company as well. In combining the essence of tech, design, and fashion, the company H & M have integrated the business tech agenda into their company value. In all of their 74 markets, data-driven business development and AI support are initiated. There is also a tech community established in the company to suit the best possible demands of the new generation of customers.
Identification of two IT infrastructure and e-commerce concepts in H & M
Database concepts in H & M
To power up or strengthen the global online stores, the allowance of cloud-native API services is undertaken in H & M. Furthermore, to make the customer experience interactive, engaging, and immersed with connectivity, the application of the company's applications is assisted by iOS, Java and Spring Boot. At the same time, the storage of the company data and information is maintained acutely by Oracle, Redis, and MySQL. The business and digital environment is perfectly suited by the inclusion of Azure and Kubernetes (AKS). This software is inserted to suit and establish the multi-cloud environment of the company. The AI algorithms and their role in analyzing and predicting customer demands and likes have been mentioned in the above points. However, that role has not only been initiated by AI but is also with a broader dataset proceeding with the help of python. Python has enabled the AI in all the required aspects and then that predicts the data of the customer. On the other hand, basic services are coordinated in H & M with the help of simple script-based Azure functions. This function is integrated into the system of the application called the Azure Function apps. Hence, all these inclusions would not have been possible without a great team of experts ranging from machine learning engineers to product owners and software engineers. All these factors have pushed the company to make further progress in the field of business tech. For instance, they have also built a community named TechSpot community which connects and also empowers autonomous engineers all around the world.
The dulcet toned conversation led tech
This specific e-commerce technology tool is a form of small mirror that the customer can only use in a selfie mode. Hence, this tool is utilized in H & M as a pull marketing strategy where customers curiously get to know the technology in a very in-depth manner. For example, there are no touch screen facilities in the mirror; it is just a voice-activated mirror. In the Newyork flagship, in Times Square, the technology is inserted. User Experience (UX) design facilities are integrated into the system .The technology is sleeping and the moment someone stares at it long enough, it is awakened and then recommends features of design to the customer. This is the aspect of facial recognition tech application in the system and this system then recommends a garment for the customer. Therefore, after choosing the garment with the body of the customer, an on-screen QR code is presented. This is the aspect by which the customers can download the image of their one. This QR code can be scanned through the smartphones of the customers. Anything preferable to the customer from the presented lists can be purchased directly and this has suited all the aspects of the e-commerce sales performance of the company to a great degree. For instance, around 86 % of the customers of H & M have taken selfies from this mirror. By scanning different QR codes, the customers can purchase different products from the different lists as well.
One survey report conducted by the H & M group suggests that the demand for office wear is declining and around 80 % of the people are becoming inclined to loungewear, casual wear, and street wear.
From the above discussion, it can be stated that the company H & M have been able to sustain aspects of retail business and their sustainability performance with the assistance of numerous technologies. The technology has not only delivered itself by database-related IT concepts such as Oracle, Redis, and MySQL but through AI, AR, and big data. Hence, it can be stated that they have tried almost every possible aspect of technology to meet the customer demand and walk in an aligned way with recent trends in the global market.