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27 May
H&M Using Big Data to Customize Store Offerings H&M Using Big Data to Customize Store Offerings

H&M Using Big Data to Customize Store Offerings

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The retailer, plagued by a troubling 10-quarter decline in same-store sales, has decided to take advantage of Artificial Intelligence (AI) to get a better handle on what people actually want to buy.

By using so-called Big Data, the company hopes to be able to avoid having to take steep markdowns on items; instead, AI algorithms will analyze store receipts to better clarify how customers use their loyalty programs as well as which items they tend to return.

The new technology is currently being implemented at a store in one of Stockholm's upscale neighborhoods. So far, H&M has been able to harvest data that indicates its customer base is largely female, and that higher-priced items and pastel-ish floral skirts have tended to sell better than others. As a result, reports Retail Dive, sales at the store have gone up dramatically.

Maybe it's just an old-fashioned idea, but taking a walk through a local H&M store might yield similar findings by observing the products that interest the female customers and how they seem to feel when buying or returning items. That, though, would require human intelligence, and the artificial kind seems to be more efficient and cheaper, at least in the short run.

At any rate, Retail Dive says that, by using the new tech, H&M has moved away from past practice of restocking stores with items that caused a series of price cuts aimed at moving $4 billion worth of unsold goods.

The number of SKUs has reportedly fallen by 40%, with most menswear products now gone.

In their place? A range of crockery, $118 leather bags, cashmere sweaters priced at just over $100, and $6 t-shirts and $12 shorts.

 

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Read 1570 times Last modified on Monday, 21 May 2018 03:37
Jim Lillie

Jim began writing for newspapers and designing for publishing companies at a time when both industries were just beginning to make the switch from manual to digital platforms. Jim lives in Boulder, Colorado with his teenage son.

Website: www.jimlillie.com
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