H&M Reintroduces Delivery Fees For Loyalty Members

Fashion retailer H&M announced it will start charging its loyalty club members delivery fees on small online orders.

According to Reuters, the move aims to slash logistics costs and help the world’s second-biggest clothing retailer to once again become profitable.

The latest version of the customer loyalty program classifies members into a “base” tier or a “plus” tier depending on how many points they earned in the past year, said Samuel Holst, head of the H&M Club. Holst would not reveal how much the company would save from the move.

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).

“We have a lot of logistics around the customers that shop online,” Holst told Reuters in an interview at H&M’s headquarters. “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. “

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 said.

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. In addition, H&M revealed it will add a new discount brand called Afound and will increase its investment in eCommerce, but will continue to add stores to markets that are still experiencing growth.