H&M has come up with a ground breaking new strategy to improve overall customers experience for shoppers. Waiting in long line ups during christmas holidays may no longer be an issue for this large retailer as it launches a new “try and buy” option that lets customers pay for items directly inside the changing rooms. H&M will have cashiers set up inside the fitting area with sales advisors as well. Such services are considered unusual for chain stores, making H&M the first amongst its competitors. “I’ve only seen it in [small, independent] higher-end stores” says Jamie Merriman, a research analyst at Sanford C. Bernstein.
H&M’s new strategy to enhance customer proves to be rather costly, with existing costs at its flagship store of $2500 per square foot for rent, and additional personnel costs will be accrued due to higher demand for labour once the service is initiated. On top of this new service, H&M can expect additional costs from its social media lounge including free wi-fi and iPads. The opportunity cost of reducing customer “in-store time” is that they are less exposed to H&M’s products, and their strategy may end up backfiring as traffic becomes less frequent.
Source: http://www.businessweek.com/articles/2013-11-13/h-and-ms-megastore-brings-cashiers-inside-the-dressing-rooms#r=hp-ls
