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The fashion company is working on innovations in the H&M Lab

HM
  • The H&M Lab develops innovation projects for the fashion group on the German market.
  • Tailor-made shirts and a shop café are among the projects that have already been implemented; wearable tech and rental options for clothing are to follow soon.
  • Business Insider met the head of the future laboratory, Oliver Lange.
  • More articles on Business Insider.

The future of H&M Germany is designed in the midst of red tulle dresses. Here, in the H&M showroom in Berlin-Mitte, business insider Oliver Lange, the head of the H&M Lab, the Swedish fashion retailer's small innovation laboratory, meets. The new “Giambattista Valli x H&M” collection, which the couture designer designed for the clothing company, hangs in the showroom.

Together with another employee, Oliver Lange develops innovative ideas for H&M so that the company remains attractive and relevant for customers in the retail sector in the long term. From visions of what H&M stores could look like in the future, to online shopping experiences, to completely new product variants: The pilot projects that are created in the lab have the potential to decide what the future strategy of H&M looks like in the German market. "Our focus is on sustainability, digitization and customer experience - offline and online," says Lange.

Sometimes the head of the innovation laboratory works from the showroom, like today. Often, however, also from the Starting House, a project space from H&M in Berlin-Mitte, which is reminiscent of a coworking space from Wework. It goes with the fact that Lange says: "We feel like a small startup in a large company."

Julia Zierer

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It is certainly no coincidence that the lab was founded in 2018 of all places. At the beginning of 2018, the fast fashion retailer's profit collapsed by 60 percent. The falling sales figures in stationary retail and the shift in consumption to the Internet had also left their mark on H&M. At that time, items of clothing had to be sold at high discounts, which depressed income. Media like “Spiegel” had attested to the troubled Swedish company that it no longer understood its customers.

With the lab in Berlin and its Swedish counterpart, the H&M Laboratory in Stockholm, which works on a global level, the fashion group is now trying hard to find out what its customers want - and how you can convince them of the brand in the future.

"All companies are currently trying to find out what the unique selling point of a retail store is," says Lange, as does H&M. He also observes macro trends on the market that show: the experience is becoming more and more important in brick-and-mortar retail, and customers want to be emotionalized. If retailers want to keep passers-by in their shops in the future, it will take more than just a transaction.

The success story of coffee  

The lab's most recent and so far largest project was the opening of a sustainable café in a Heidelberg H&M store. The H&M Group is already implementing the in-store café concept with its Arket brand in Berlin, for example. Apparently so successful that it is now integrating this idea into H&M stores. Customers can now have a coffee or eat a piece of cake there while shopping. All products come from the region and are only offered seasonally. The concept was developed in close cooperation with the Heidelberg social entrepreneur Hans Reitz. It is about showing that H&M also wants to live corporate responsibility locally.

"Coffee alone is certainly not the panacea for increasing the length of stay in stationary retail," says Lange. The findings from the implementation of such a concept flow primarily into further innovation projects. After all, the lab collects a lot of data here and learns so much about its customers: sales per purchase, conversion rate, length of stay, customer frequency. The lab also conducts qualitative customer surveys in the Heidelberg Lab Café or uses the member club app.

“Our goal is always not only to give the group a whole new perspective, but also to test it on a small scale,” says Lange. That is why he calls the lab H & M's "Speedboat": a small unit that can quickly advance in the development of new ideas, which a large group ship like H&M cannot do.

H&M follows the personalization trend

In April of this year, the lab announced that it would soon be offering tailor-made men's shirts in cooperation with the German startup Zyseme. Customers can then simply enter their measurements online and the shirt will be sent straight to their home. A tailor-made shirt for 39.99 euros has never been seen before.

Clothing that was tailored to your body was previously considered a luxury. The H&M Lab is banking on the ongoing personalization trend among consumers. Customers should be able to order the first made-to-measure shirts online by the end of the year. It can be assumed that H&M will also expand the personalization option to other product groups if the made-to-measure shirt campaign gets off to a good start.

Next year customers can also borrow clothes from H&M

One of the most important projects of the H&M Lab for the next year, however, will be the rental of textiles. To do this, the team is currently checking which product groups would be suitable for a loan or rental option. In the recently opened “Mitte Garten” store in Berlin, customers will also be able to borrow items from special collections in the future.

The Swedish future laboratory, the H&M Laboratory, has already announced that it will soon be offering the rental option in the Sergels Torg store in Stockholm. There, members of the customer loyalty program can rent a maximum of three selected skirts and party dresses from the Conscious Collection for one week between 2012 and 2019. A part there will be rented for 350 Swedish kronor (the equivalent of around 36 euros) in the future, according to the company website.

H&M relies on cooperation with startups 

In its work, the H&M Lab mainly relies on collaboration with other startups. "No brand or company can solve the pressing challenges that retailers are currently facing on their own," says Lange, "Collaboration is the new competition."

That is why Oliver Lange has many more appointments on this day. Later he met a Berlin startup, for example, with whom he was looking into a possibility of turning old clothes into new furnishings. In the Heidelberg Lab-Café, for example, the table tops and the counter are made of pressed old clothes.

H&M Lab boss: four different wearables in four campaigns in 2020

Lange also sees “wearable tech” as a major innovation for next year - clothing or accessories with built-in smart electronics. In 2017, for example, Levis launched a jacket with Google Maps navigation that allows you to take phone calls without having to use your mobile phone.

Next year, H&M will launch four different “wearables” in four campaigns, says Lange. The technical clothes will not be available in every store across Germany, but only in selected pilot areas. The launch of the first “wearable” is expected by the end of the year, according to Lange.

Read also: Cos, Cheap Monday and Co .: H&M is in crisis mode and is discontinuing one of its fashion brands - others could follow

The goal behind all these projects is to develop innovations that are ideally scalable. “We are not an end in themselves as a lab,” says Lange. If the tests work well, the lab would transfer the data to the existing organization and then roll out the project across Germany if necessary.

The advantage is that the lab can test various ideas quickly and with agility and can even build up its own business models that are intended to drive the innovative strength of the retail sector. In this way, the lab can often make decisions in a more uncomplicated and unbureaucratic manner. Just like a small startup in a large corporation.