Fashion chain H&M is aiming to tackle the high street blues by boosting its loyalty programme with the launch of a buy now, pay later scheme for club members, giving shoppers up to 30 days to cough up for their new outfits.
The scheme, which is being run in association with Swedish fintech Klarna, does not charge interest or fees; approval depends on a “soft” credit check, credit history, age and other factors.
The payment option, which will launch first in the US and then be rolled out to the UK later this year, will be managed through the fashion store’s smartphone app.
The move comes as H&M has revealed that UK operating profits slumped 68% to £12.2m for the year to November 30 2018. Profits after tax fell 74% to £7.5m, but gross profit still managed to edged up by 1.5% to £561m, while revenues were flat at £1.1bn.
H&M’s country manager for UK & Ireland Toni Galli said: “Through the partnership with Klarna, we have developed an H&M-unique payment solution that offers our fans a truly modern shopping experience no matter where and how they choose to shop.”
The deal with H&M dates back to October last year, when the Stockholm-based retailer paid $20m for a stake of just under 1% in the fintech.
Klarna chief commercial officer Michael Rouse said: “The foundation of the Klarna and H&M partnership is a commitment to continuously develop smarter, simpler and engaging shopping experiences.
“We at Klarna are excited to now launch our leading Pay Later offering together in the UK, enabling a unique shopping experience for consumers – instore and online.”
The clothing retailer, which operates 48 online markets and runs more than 4,900 stores in 72 markets, has also expanded its loyalty scheme with a music partnership that will see it support independent artists, rising talent and venues.
H&M Music, a three-way partnership between record label Awal and live event ticketing platform Dice, will provide members with the opportunity to discover new artists, access exclusive live events and VIP opportunities.
Awal will run data analytics to identify artists who overlap with H&M’s audience, while Dice is managing a series of live events, as well as experiential campaign services for the collaboration.
English singer-songwriter Gabriella Aplin is the first artist to be presented through the scheme. Aplin has also co-designed a limited-edition collection for H&M.
Last year, H&M enlisted the help of Cambridge Analytica whistleblower Christopher Wylie to boost its use of artificial intelligence and data analytics.
The fashion retailer hired Wylie as a consultant to help it gain better insights on customers, products and markets, while ensuring its use of AI remains “sustainable and ethical”.
H&M hands role to Cambridge Analytica whistleblower