HM & Primark's Online Profile

H&M

H&M's online profile isn't as strong as Topshop's. They both may have the same social media networks but in terms of popularity Topshop wins the online war.

The online website is easy to navigate and use, however purchasing the content and the delivery service has always been an issue for H&M customers.
H&M online has been a growing investment for the retailer since it launched back in November 2010. Their online sales have been an area that the company wishes to improve, as the sales mostly wreck in from the highstreet stores.

The H&M store owned by the Persson family, wish to expand their online operations but however are struggling with meeting their targets with the countries they currently exist in. The Swedish company's e-store is already present in these current locations, Sweden, UK, Norway, Denmark, Finland, Germany, Austria and USA. However the sales do not reflect upon the stores.

It was said in the Financial Times by H&M's Chief executive Mr Karl-Johan Persson, that the companies forward investments may affect their budget as the online sales have recently decreased.
"Mr Perrson said H&M planned to open four new online operations this year; in France, Spain, Italy and China. Taking into account investment in stores and online expansion, he said that operating profit would have increased 14 per cent rather than 9 per cent. H&M does not break out the number for it's online operations but it's operating margin fell slightly over the period, from 11 per cent to 10.6 per cent".

This statement describes the company's current opine state. It seems as if the company performs better on the high street rather than online.

Why is this?
H&M is a retailer that have mostly focused on pleasing the customer physically rather that digitally, their online presence is still a work in progress. The company currently has more than 2.900 stores in 48 countries and have reported to making sales £2,992.16 in the financial year of 2013. However their online sales for the last financial year dropped by 6 per cent making the highstreet perform better in sales. 

H&M continue to focus on the retail market side of their company rather than the online operating functions, which reflects in their sales growth. 

How much do they profit from online sales?
In the recent year the company has seen an increase in sales and profit rising by 13%. In terms of their operating (Online and social networking sites) profit, H&M are slowly rising in sales. From the recent drop of 0.7 per cent, the company rose from £3,130 to £3,401 million, slowly climbing it's way back up. 

With the companies upcoming online expansions around the world H&M should hopefully soon see a healthier profit in the next financial quarter. 

______________________________________________________________________________________________________

PRIMARK
Primark is a private listed retailer known by selling clothes at a low budget price, with other clothing retailers such as Topshop and H&M is it's competitors on the highstreet. However, Primark does not operate an online shopping and delivery service but a website showcasing it's products in store more effectively making it more interactive for the customer fan base. 

"Primark relies on low costs, economies of scale and efficient distribution to maintain its competitive market position." (http://businesscasestudies.co.uk/primark/#axzz2xMXk4GtZ) - About Primark.
Being a low budget retailer, Primark has the issue of facing the price of the delivery cost V the cost of the item which depicts its "Look Good Pay Less" slogan by the increase of the item making the customers value more.

With Primark making it onto the online retailer ASOS, showed a good indication of the retailers financial strength in the market and popular reputation. Although Primark has been very successful in its previous financial years with highstreet sales up at £4,273m in revenue which was 22% ahead in their previous year. However, the retailer operating online only lasted a few weeks; Primark's Finance Director, Jason Bason commented "Primark has avoided selling online because its budget pricing means that handling returns and deliveries could make the operation unprofitable. Bason said that Primark was focusing on store expansion instead." (http://www.fashionunited.co.uk/fashion-news/design/asos-to-stop-selling-primark-2013091118486) - Fashion United. Through my research i suspect that the company were battling the cost of delivery against their item which contradicted their Low value concept and seeing as their performance was so high in stores, the company are better off selling on the highstreet stores.

During their online operation on ASOS, Primark's sales jumped to 22 per cent making their online sales £1.6m in profit for the company online.