It's almost ironic that fast fashion mega-brands H&M and Zara have been super slow to embrace e-commerce. Now both are making the leap, err, putting a toe in the water, to offer their threads online. Beginning September 2, many devotees of Zara's minimalist basics and trendy accessories can cruise and click to buy. Two weeks later similar buttons will appear on H&M's stylish site. Only... not in the United States. Why not? The answers lie in both management teams keeping a close eye on a make-or-break component of fast fashion: the supply chain.
On the surface, the hesitance to offer online shopping seems counterintuitive. Both are retailing powerhouses, and both have built strong global businesses that would allow them to move easily in a world of different currencies. Indeed Stockholm-based Hennes & Mauritz,is the world's third largest retailer behind the Gap (GPS). Spain's Inditex -- parent company of Zara-- holds the top spot. If anyone could sweep the Web, it should be these companies.
But putting Zara's goods online requires more than just good back-end sales architecture. The company's push into untouched global markets has taken a lot of resources. Last year, Inditex opened 343 new stores, including Syria. In 2010 it opened shops in Kazakhstan, Bulgaria, and India, bringing the total number of markets to 77. The company has plans to open stores in Australia and South Africa in 2011.
Alongside growth, Inditex launched an ambitious sustainability plan, hyper-aware of its growing global footprint. Starting next year, the company's initiative will consolidate and increase environmental standards, and cut direct carbon emissions as well as those from industrial supplier activity.
Executing such a plan is going to take stringent supply chain management at all stages -- and with 1,237 suppliers will be no small feat. Not to mention that shipping orders to countries that don't have fully operating warehouse facilities is going to factor into all those carbon emissions ratings. It's no wonder Inditex is taking baby steps. Therefore only France, Germany, Italy, Portugal, Spain, and the United Kingdom will have access to e-commerce to start.
Zara's plan was in place before H&M's step into the murky waters of its own push to be more eco-conscious. Though H&M did concede that GMO cotton could have been used in its Spring Garden Collection, the company is standing firm in its commitment to increase the use of organic cotton by 50 percent until 2013. Which means stricter policing of its own supply chain â€" a proposition that's neither cheap nor simple.
H&M knows how difficult it can be to manage so many moving parts -- think the imbroglio of unsold merchandise shredded and kicked to the curb instead of donated or recycled -- and the difficulty of maintaining consistent control of over 1,700 stores in 33 countries.
It will be up to both retailers to become as adept as their U.S. rival Forever 21 at moving massive quantities of trendy items in and out of stores (and online) in as quickly as a couple of days. Until then though, both Zara and H&M have a unique opportunity to use the Web to unload the goods they can't get out of the stores. H&M recently warned that relatively weak sales in April and May left a pile of unsold spring garments. I think smell a sale.