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Fashion retailer H&M has announced that it will start charging its loyalty club members delivery fees on small online orders. The move aims to reduce logistical costs and help the company become profitable. In addition, the latest version of its customer loyalty program classifies members into a base tier or a plus tier, depending on how many points they earned in the past year.
“We have a lot of logistics around the customers that shop online,” says Samuel Holst, Head of the H&M Club. “For the plus level, deliveries will remain free for all purchases, but for the base level there will be a cap. You will need to shop for a certain amount to get free delivery. Returns remain free for all.”
The changes mean that base members in Germany, the group’s biggest market, will need to spend at least 25 euros ($28) to receive free delivery. In its home market of Sweden, the minimum order for free delivery is 200 Swedish crowns ($22).
There is currently an H&M Club in 16 of the company’s 71 markets, with plans to add seven additional markets, including the United States, by the end of the year. The number of members doubled last year to 30 million, with another five million signing up in the first quarter of 2019.
“We want to keep up the growth pace we’ve had so far, and increase it this year,” Holst says.
Last year, the company announced it was closing more than 170 of its brick-and-mortar locations through its largest store closure program in at least 10 years. However, H&M also revealed it will add a new discount brand called Afound and will increase its investment in ecommerce. In addition, it will continue to add stores to markets that are still experiencing growth. H&M’s move to rein in free deliveries for members comes after German online clothing marketplace Zalando recently introduced a minimum order threshold in Italy to increase orders.
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