Digital Business Report: H&M's Strategies, Models, and Impact

This report provides a comprehensive analysis of H&M's digital business operations. It begins with an introduction to digital business and then focuses on H&M's online presence, exploring its advantages and disadvantages, including data collection, customer insights, customer experience, and profitability, as well as challenges like skilled staff, complaints, and security concerns. The report then evaluates emerging digital business models, such as marketplaces, subscription models, free offerings, online auctions, and pyramid models, while considering ethical and cyber security issues. Furthermore, it examines the impact of new collaborative relationships and strategic alliances, highlighting H&M's collaborations with designers, technology businesses, and the use of AI and big data. Finally, the report discusses the e-commerce principles employed by H&M, providing a detailed overview of the company's digital strategies and their implications.

INDIVIDUAL REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Digital business .......................................................................................................................3
2. Evaluating new emerging digital business models..................................................................5
3. Impact of new collaborative relationship and Strategic alliance.............................................7
4. E-commerce principle..............................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Digital business is one of the most emerging business which are trending across the world
nowadays. This business are working on internet and focus mostly on online store and major
selling are being done through online store only. This is modern business working which are
used highly in market (Ahmad, and et.al.,2020). These businesses are working across the world
with the help of internet. In this report, Digital business working on internet is H&M which was
majorly focus on selling fashionable appeals through their website and app stores. The advantage
and disadvantage of H&M, new models and emerging digital business which are faced ethical
and cyber security. New collaboration and strategic alliance through digital business. Lastly, e-
commerce principles used by H&M.
MAIN BODY
1. Digital business
Digital business are the most emerging business around the world which are working
online majorly and focus on targeting customers all over the world. As, internet is an essential
part of every person which spend their major time of it can aid company to attract more of
customers through online presence. H&M is one of the best digital business which is well-
established in market since 1947 which was founded by Erling Persson in Sweden. They are
firstly dealing in women cloths and afterwards men wearing are also started by him. They start
working as a online retailer by 1998 at a time of expansion in European market. In present,
H&M is one of the leading digital business across the various countries which are dealing in
fashionable products offered to men, women and children. There major focus in on selling goods
via internet from their website and app store available in Android and IOS. H&M is now
working globally in many countries like Europe, India, USA and UK. There major focus is on
online stores which help company to save huge amount of cost and time which was incurred on
physical store presence. The reach is wide through internet and allow company to attract more
customers through various online strategies.
H&M is using various advantage and disadvantage of digital business which are taken by
company in order to capture more of market (Bican, and Brem, 2020).
Advantage: Enhance data collection of consumers: Through digital business, H&M gathered large
number of data which are gained through online sources like website and apps. The

personal data which is collected through online sources help company to know the
behaviour of consumers and actual demand are being known by company. This data also
help to modified changes which are being done by analysing the data collected and
strategies are being prepared accordingly. This data is optimized and analyse by company
which assist company to work accordingly and increase the efficiency of company
towards company goal (Hacioglu, U., 2020). Data- driven customers insights: while online data collected from various sources are the
key to unlock customers insights. Insight informations being used to know the better
understanding of customers needs and wants which help company to create strategies
accordingly and make even more customer centric. This data is being gain at time of
online marketing campaign run by H&M through various social media platforms like
Instagram and Facebook. These insights have very large amount of data which are further
filtered by company and known their target customers for upcoming products. Enhance customer experience: online website and applications on electronic device help
company to provide with better customers experience. Website is the face of company
which is designed in a manner that attract customers and promote their products in very
effective manner. This increase the sales of company and generate high revenue from it.
The experience of website used by customer gained an experience which makes
customers to repeat the format and come out with loyal customers. Most of the online
business had gained loyal customers through their website only which provide with new
experiences.
 Increased profits: Through working on online store that save huge cost of company and
increase the company revenue generation power. As H&M saves high cost from physical
store in countries which involve cost of rent, furniture and stock maintain by each store.
The transformation on digital business increase the profits which is gained through online
presence (Shkarlet, and et.al., 2020).
Disadvantage Skilled staff: To maintain the online store presence, company need to hire IT
professional which are potential and have abilities to overcome the problems which are
occurred uncertain on website. This can increase the cost and sometimes take high time

to know problem arises on website. As trends are changes rapidly, employees need have
high knowledge about the changes occurred in market. Complaints: Through working online store, complaints of customers are arises all over
the world which need to be handled effectively. If not handle by H&M staff, then it leads
to affect the goodwill of company and quality product may be suffered. Negative feedbacks: Same as there are many negative feedbacks are also arises in
company which are gained through social media and sometimes viral on internet can
highly affect the company operation and loyal customers which are further leads to
decrease (Hacioglu, U., 2020).
 Security and privacy: The online data which is collected by company for there use can be
compromised by any employee or any uncertain activity which leaks the personal data.
This makes one of the biggest disadvantage of company to work online. Some Customers
avoid purchasing online through brands for security reason while company need to be
had high security and privacy for data to keep safe in company.
2. Evaluating new emerging digital business models
There are some models which are trending in digital business and working on different
models which are used by business. There are many models which are emerging in current
market place but these models are being working to generate revenue from it. Here sometime
company may faces issue while using digital business models and major issue company faced is
ethics and cyber security. This issue is on of major issue faced by digital business in market due
to there technology used and hackers which are used by them for illegal purpose.
The emerging models are: Market Place: The digital market place used by companies seller to customers on a
common platform which is used by major of company to sell goods directly to customers.
Revenue is generated through by providing commission, brokerage fees etc. These are
one of trending business model which is used by H&M by working with Amazon to
increase the sale of clothing segment of company. Here certain problems that ca
overcome through working with companies having high ethics and values, having strong
IT support and around the world that makes high security of personal data during inter
transfer (Dyrhage, 2020).

 Subscription model: This model is being used by company which are offering products
and services offered as subscription. This model help companies to bind customers for
long term as subscription are usually on monthly, quarterly and annual basis. This are one
time purchase of subscription and pre-village is given to this customers first for praising
of goods and service. They are also provided with very attractive offers and discounts
which is makes loyal customers and increase the sale of company. H&M can also offer
subscription model to customers which are being used to offer attractive discounts' ion
products. Here ethical consideration a cyber security is being maintained by company
who had entered their credit card and bank details to keep that information safe and avoid
breach of data. Free offerings: This models is quite popular especially for IT firms. This models offers
free products and services by companies to their loyal customers or on special occasion.
This will increase the company's goodwill through offering free products like goodies of
company on every purchase of products as gift (Li, 2020). H&M can adopt this model in
there business as they can provide small goodies to every customer on special occasion or
for loyal customers. The ethical working of company is being working to treat fair and
equal to all customers to provide benefits and offers to all customers equally. Online auction: This model is one of those model which involve high technology is
being used by company to sell special and unique products. Online auction by H&M can
be used to sell special edition collection by world top designers. Online auction by
company offer all customers give equal right to purchase and whoever bud highest,
makes purchase. Here, there is high threat to company for there cuber security, as it can
be used by hacker that makes false purchase.
 Pyramid model: This model is usually used to increase the sales of products and services.
This model quickly build and easy to mange by company. This is being made for those
companies which have high margin products and can be shared with others in order to
increase the sales. These models are usually as part of affiliated marketing where
freelancers work for company to increase the sales and commission is being given by
company to freelancers for each sales. H&M can use this model in market where there is
less market share and need to increase the sales revenue. Here, cyber security is an

important factor where high technology software need to b used for manage all freelancer
and there commission earned by them (Piller, 2020).
Hence, these models are being applied on the basis of there nature of business. The
models which is used by company need to be implemented properly and ethic and values are
being followed by company to gain customers and market trust. For this Ethical Trad initiative is
being followed and collaborate with UN and other NGOs. However, cyber security is another
factor which need to be considered as key factor by company in order to maintain personal data
that is gathered from online sources.
3. Impact of new collaborative relationship and Strategic alliance.
New collaborative relationship is a type of partnership which is between two or more
companies to work together in order to accomplish the common goal. Collaborative relationship
makes company to increase the market share, sales revenue and generate revenue from the
program that is being run by all companies. These makes company to move towards there
ultimate vision and complete there task on time. These relationship make company and their
employee to work together with each other to attain the common goal. This partnership is share
resources of company like finance, people and other assets which are used to attain objectives.
Here sometimes people are forced to work together in company for the benefit of company and
to attain the common goal (von Delft, and Zhao, 2020).
Strategic alliances is an agreement between two firms to work together on a mutual
benefit project with having their own independence. This alliance is having less complexity and
minimum bindings on each other when it compares to joint venture. Here two business pool
together their resources and found new entity. This strategic alliances is being made to enter into
market, improve product line and gain competitor advantages. The agreement allows both
company to work together and to earn more profits.
The digital business uses the technology to build for there market for products. H&M
uses collaborative relationship between various top designers and work towards the same
objectives. H&M is collaborate with digital technology business which help to provide with
unique experience and gain trust. The digital business like PayPal payment, software developers
to introduce live chat, shipping options and other features which are developed on website and
app store. This increase the online sales of company with 22% in 2019 report from H&M.
Further, AI and Big Data is being used to improve product assortments. H&M use technology

tools to analyze the data gather from web traffic, online blogs and articles and SEO report. The
company is being working on online store and reduce the physical store with 40% slashing its
fashion products for men.
In order to gain loyal customers and trust from market, H&M also collaborate with Stella
McCartney, Viktor &Rolf and superstar Madonna. There collection with celebrities and designer
like Roberto Cavalli and Italian designer, sold his collection very quickly. Also, under to gain the
market share in other countries like India, H&M had collaborate with Amazon, Flip kart and
Myntra where H&M products are bing sold on digital platforms. The technology used by these
companies are very effective and design in manner to attract customers through there website
and feel new experience. Further, in 2013 Beyonce is being collaborated with H&M and was
face of company (Gauri, and Grewal, 2021).
H&M strategic alliances is made with Solidaridad and fashion retailer to achieve ore
sustainable textile production chain. They both collaborate for long time period and now depend
on their collaboration to multinational partnership. They are Working together in various field
like cotton, better working condition and fair living wages. The strategic alliance is being made
by H&M are with Balmain x H&M which is recognized as international designer house. It
motivates to shows that when high end style meet high street prices that makes fashionable
product quite crazy in mind of consumers. They are being done for a reason that makes company
globally recognition and having an objective of clear goal for H&M product in market,
advertising through taking culture context, focusing on good cause like sustainability and unique
collaboration to bring luxury product around the world. The digital technological businesses are
also working together to secure company from threats, hackers and false activity.
4. E-commerce principle
E-commerce business are working through internet and there almost full interaction is
through online platforms like mail, social media, website chat and through public relation. These
things help company to maintain the position in market. For attracting new customers and
maintain the loyal customers, H&M is constantly designing the website and application in unique
manner that gives better experience to customers. The small things can affect the company
goodwill in market (Ronaldo, 2020). There are certain principle for which H&M as an e-
commerce business is focusing on majorly and gain high customers base all around the world.
The following are the e-commerce principles are:

 User experience: One of the key principle which is followed by H&M and the reason for
being successful venture in world. The company design their website in such a manner
that attract customers towards products and increase the chances of sales from website.
This also brings new customers to website and enhance the sale of company. It also
brings customer for second time on website for purchase. Small things are being taken
into consideration like website design, products display, easy to understand website
through various steps. Website also include image and videos of products and company
operation which also help to make better design of website. This allows customers to
make an easy purchase from website. On the other hand, Mobile applications are also
design in a manner that give easy access to customers for products as major of customers
are being purchase through mobile applications due to its most friendly and easy access.
 Content: The effective content is another important factor that H&M is working and
following by company that display in website and online stores which makes high
purchase from consumer side. The attractive content is unable to make decision of
purchase by customer. H&M content from fashionable products are shown in a manner
that attract customers to make purchase of products if land on website. The effective
content is shown through images and videos of products which are being used show the
feature of products and usage (Fauzi, Al-Khowarizmi, and Muhathir, 2020).
 Online marketing: The main benefit that is being provided to H&M is social media
campaign which is used to promote goods and brand name across the world. Social media
marketing, Search engine optimization are one of the major factors that come into online
marketing. H&M can target customers according to their need and objectives like
targeting men from age of 18-60. It assists company to build strong data base of
customers by knowing insights and include in marketing through social media.
 Email: This is another important principle used by H&M to keep update their loyal and
regular customers about new collection launch, events of H&M, articles and blogs
publish notification and other important notification which is used to update customers
about the H&M activities.
Hence, these are certain principles of e-commerce which is being used by H&M to make
strong public relation in market, customer loyalty and sustainable for long term in market. This
principles are followed by H&M and success in objectives which are set by company. Company

is well-established and attain the demand, need and wants of customers which are analysed and
work according to customers expectation. This overall enhances customers experience for using
company website and application and attract more customers towards company that leads to high
revenue generation from fashion industry.
CONCLUSION
The above report conduce that H&M I work effectively through Online platforms and
major focus of company is on online store only. The major reason to adopt online store is due t0
technology changed and emerging business models which makes company to lead in market and
generate high revenue from it. While there are certain disadvantage of technology for company
which is faced problems and issues regarding ethics and cyber security. Further, H&M also
collaborate with top most designer and celebrities that makes company huge success and operate
around the world. Lastly the e-commerce principles which is being followed by H&M to attract
customers by providing better customers experience through website and mobile application.

REFERENCES
Books and journals
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Fauzi, F., Al-Khowarizmi, A.K. and Muhathir, M., 2020. The e-Business Community Model is
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Online
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