Listening to Customers: How Sentiment Analysis Can Refine H&M's Customer Experience

When competing in the same industry as Shein and Temu, a brand like H&M must do one of two things to survive: 1) match these competitors’ prices (which is near impossible) or 2) justify higher prices. And in order to justify higher prices, H&M has had to do a lot more than simply improve the quality of their clothing. For them, it’s all about customer experience.

And while H&M’s customer experience initiatives have been receiving tons of hype from investors and shareholders, there’s a bit of disconnect between the opinions of customers and investors.

The Good

Now, don’t get me wrong, H&M has been doing a LOT to try to incorporate new, innovative tech into its in-store and online shopping experiences.

For example, here are an array of different features they’ve launched or pilots they’ve been testing in several locations:

The H&M App

H&M’s app includes features such as the Styleboard, which allows users to create and shop from their own moodboards with their favorited items from all H&M Group brands, along with brands outside of the group. The app also gives customers the ability to look at what items are in stock at whichever store they are shopping at in that particular moment.

Customer Loyalty Program

Through H&M’s loyalty program, customers are awarded points for frequently making purchases, buying sustainable products, bringing in their own bags, choosing climate-friendly delivery options, reviewing products, and even inviting friends to the app.

In-Store Experience

H&M has invested heavily over the years in their physical stores. They’ve launched smart mirrors that allow customers to virtually try on clothing, created scan & buy capabilities to allow customers to automatically make an online purchase of a product they found in-store, and they’ve even made it possible for customers to return online purchases at their physical locations.

The Bad

But here’s where it gets tricky. Obviously, every brand wants to make their customers’ shopping experiences as satisfactory as possible. But just because new technology exists, it doesn’t mean everything is a necessity to implement. What brands SHOULD do is listen to customer feedback and figure out what part of the customer journey to prioritize. And this is an area H&M has room to improve upon.

Let’s look at a bit of customer feedback gathered from different H&M channels.

After looking through a set of customer reviews, here’s where we found the most negative feedback:

• Customer service agents are frustrating and unclear
• Returns and refunds are a difficult process
• Delivery is slow and unreliable

H&M can gather TONS of information from this feedback. For example, they might note that they need to fix bugs in their app, better train customer service agents, quicken and streamline the return process, and tighten supply chain processes to speed up and improve the reliability of their deliveries.

In fact, nearly none of the problems H&M’s tech investments were supposed to address were touched on at all in these pieces of customer feedback. And most of the positive feedback revolved around the actual products and in-store experience, even before these new technologies were put in place.

And what this implies is that H&M needs to shift their priorities and listen more to the actual customer, rather than riding on current trends. In fact, there are ways to implement technology to fix some of these real issues as well — for example, supply chain issues can easily be optimized using new tech, and through AI, customer service can be made simpler as well.

But with hundreds of millions of customers and hundreds of thousands of reviews, it’s impossible to manually sort through this feedback. Luckily, a simple sentiment analysis model can easily identify H&M’s painpoints from a huge set of raw data.

It all goes to show that improving the customer experience using tech doesn’t always need to be flashy.

Takeaway

Shein and Temu’s customer service, returns process, and delivery timeframe are also huge painpoints for their customers, so if H&M wants to compete, they’ll have to prioritize fixing these painpoints before enhancing other parts of their customer experience.

If H&M can get these aspects right, customers will be willing to pay the extra dollar for the extra convenience and reliability.

But of course, painpoints will vary by company. So again, a simple tool like sentiment analysis is absolutely essential if you want to identify those painpoints a LOT quicker, and in real time.

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