H&M Cosigns Retail’s Latest Trend
H&M will start charging for online returns in more markets, while Marks & Spencer ditched single-use plastic bags and John Lewis has bigger savings plans.
Is H&M’s new policy a loyalty play?
Customers should sign up for H&M’s loyalty program if they want to insulate themselves from the fast-fashion chain’s expanding returns fee policy. New, undisclosed markets will soon be under a company policy that charges shoppers for online purchases they return through a third party if they’re not enrolled in the retailer’s loyalty program. In-store returns are free for all customers.
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Zara sparked a digital uproar last year when it started charging 1.95 pounds ($2.39) when customers dropped an online return with a third-party. The retailer’s current returns FAQ states that customers will see $3.95 deducted from the amount of their return if they choose to transact through a “delivery point.” In-store returns are still free, however.
When the change was announced last year, Zara customers flocked to X, the social media site formerly known as Twitter, to vent about problems like inconsistent sizing that forced them to order products in multiple sizes and figure out what fit.
Other retailers also have started to charge for costly online returns. Uniqlo tweaked its U.S. online returns policy in 2021, charging $7 for a return shipping label. Shein give customers a hall pass for their first return, but charges $7 to cover the return shipping cost after that.
H&M rolled out the new return-fee policy in some markets this summer, and recently brought it to the U.K. where returns cost 1.99 pounds ($2.47).
M&S ditches plastic for paper
Marks & Spencer followed other major retailers in switching to more sustainable paper bags instead of plastic.
All of the retailer’s U.K. stores now offer Forest Stewardship Council certified paper bags available when shoppers check out. The food stores offer a sturdier version while the one carried in apparel and home department stores is “simpler”. They’re both water resistant, and testing shows they can be reused 100 times.
They’re also responsibly sourced and made using renewable energy, Victoria McKenzie-Gould, M&S director of corporate affairs, wrote in a blog post, noting that plastic bags collected in store will be turned into “household bin bags.”
“Having done this we now have a solution that is better environmentally and which helps customers looking to make small changes to reduce their environmental footprint,” she wrote. “For the vast majority who already reuse their own bags, which remains the most sustainable option, not a lot will change. But on the odd occasion when we all need to reach for one more bag, we’re pleased to be offering a more sustainable option for customers.”
The company earlier this year introduced its “Bring Your Own Bag” initiative to Click & Collect orders at its department stores, which is expected to remove over 10 million units of plastic annually. While over 70 percent of M&S customers choose to bring they own bag, the switch to paper bags provides an option that avoids plastic while still giving customers a bag option when they need it.
Many marquee retailers have switched to paper shopping bags in recent years, including H&M, Dick’s Sporting Goods, Fast Retailing and Adidas.
John Lewis goes for billion-dollar bullseye
John Lewis Partnership now wants to save 900 million pounds ($1.11 billion) in costs by January 2026, triple its originally stated goal.
Under its Lean Simple Fast strategy, the retailer stated a goal of achieving 300 million pounds ($391.4 million) in annual cost savings by 2022. Though it has met that goal, now John Lewis must “adapt” to the “changing economic environment” and “triple the scale of our productivity improvements,” it said. The changes will improve the balance sheet and the customer experience, it added.
The program is part of the five-year turnaround plan the group unveiled in October 2020. The turnaround now will take until 2028 to fully see results, John Lewis said, citing issues such as inflation.
For the six months that ended on July 29, the retailer’s losses before taxes narrowed to 57.3 million pounds ($70.8 million), an improvement from a 66.8 million-pound ($80.3 million) loss a year earlier. Sales rose 2 percent to 5.8 billion pounds ($7.2 billion).
According to the company, customers are spending more on beauty, fashion and dining in, while technology and big-ticket home goods purchases suffer. The company’s customer base grew by 600,000 21.4 million.
“The Partnership is a unique model that has been tested and come through stronger many times in our 100 year history,” said Sharon White, chairman of John Lewis. “While change is never easy—and there is a long road ahead—there are reasons for optimism. Performance is improving. More customers are shopping with us.”
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