Due to the rise of online shopping, it’s becoming increasingly difficult for brick-and-mortar retailers to achieve profitability. Take the Swedish retailer H&M as an example. To catch up with e-commerce trends, this fashion chain has slowed down its expansion of physical stores. In fact, the company plans to close 165 stores in 2019. When it comes to opening new stores, H&M will have 45 fewer than previously planned.
Clearly, H&M is putting more effort into its online expansion. For instance, it launched an online store in Mexico and plans to launch online shops in Thailand, Indonesia, and Egypt in late 2019. This retailer is also expanding its business through partnerships with the Indian e-commerce platform Myntra, as well as with the Chinese Tmall marketplace. H&M has also expanded its partnership with Klarna to include the US, offering “frictionless mobile, in-store and online payments, easier deliveries and returns, try-before-you-buy services and financing options”.
Opening a brick-and-mortar store vs. digital expansion
Many brands are facing store closures due to the rise of e-commerce. Those that want to achieve profitability, optimise their retail business, and avoid bankruptcy are aware that investing in online expansion is a far better option than opening new brick-and-mortar stores.