Fashion Briefing: How H&M is using real-time data to merchandise stores based on optimal sales

By investing in radio-frequency identification, or RFID, along wth AI and live analytics, the company is evolving how its 4,000 worldwide stores operate. The goal is to bring the same level of data and responsiveness found in e-commerce to the store floor.

“We are really only scratching the surface of what is possible,” said Ellen Svanström, Chief Digital Information Officer at H&M Group, speaking at Shoptalk Europe. “But already we are seeing results. Our stores are performing better, and our teams are empowered to act on data in ways that were not possible before.”

The strategy starts with RFID tags, now placed on every garment. These tags have become cheaper in recent years, meaning brands now pay $0.10-$1.50 per tag while getting tracing and product info at all stages in the supply chain. In-store sensors then track how products move and which displays attract shoppers. And finally, AI-powered dashboards update in real-time, giving staff live insights into what is selling and what is not.

Other brands investing in RFID technology and dynamic in-store data include River Island, Zara, Uniqlo, Lululemon and Mango. Across the board, the aim is to enhance stock visibility and integrate online and offline shopping experiences. “We’ve seen about a 40% reduction in returns for products tried in RFID-enabled fitting rooms,” said Katherine Walsh, CIO at River Island. The system helps customers find the right size and style.

But where H&M is moving ahead is in making real-time data directly visible to store staff through live dashboards available on visual display devices like iPads, allowing them to adjust merchandising, service and stock flow on the fly.

In H&M’s Soho flagship in New York, store teams can see floor compliance, or how well the store is set up for discovery and product availability, and also average shopper session times. Store staff can also actively monitor which trends are driving sales. For example, a recent dashboard showed sales spikes tied to Coachella season.

“Imagine having all the insights and data you have in your online business now available to you in your physical stores, in real time,” said Svanström. “That is becoming a reality for us.”

The system also makes store layouts more efficient. Heatmaps show how customers move through the space, helping visual merchandisers reduce clutter and optimize displays. In one example, a window display drove 132 sales in a single day because of a change made by store teams and merchandisers in response to local sales data and shopper trends.

Prompts in the system are also helping associates improve sales. According to H&M data, suggesting additional items based on in-store trend data helped associates increase receipt values by 15%.

Upselling prompts are just one example where local teams now have more control, according to Svanström. “We can now curate the store based on what is performing in our market, not just what comes from the head office,” Svanström said. “That has changed how we work.”

Inventory is managed more dynamically, too. When products go viral in one city, stock can be moved from nearby stores. External data such as weather and events also inform decisions on what to put out and which products to put nearer the store entrance.

The new technology tools also connect with H&M’s app, which has been updated in recent years to increasingly focus on personalized suggestions. In the app, shoppers can create a list online then use a map to find products in-store. If an item is unavailable, nearby stock is located in real-time and offered for quick delivery.

“The role of the store is evolving,” Svanström said. “It is no longer only a place of sale. It is also a source of data, a service point and a way to connect with the customer.”

How Google’s “search checkout” is reshaping the online purchase journey

Google’s new Search Checkout was launched at I/O in May, and while it has received less attention than the company’s AI try-on feature, it may have a bigger impact for brands according to industry experts. By allowing shoppers to buy products directly in Google Search, the tool is set to change how online sales happen — and presents new challenges for direct-to-consumer businesses.

For DTC brands, Search Checkout offers both opportunity and risk. It can drive faster conversions from mobile search, but at the cost of losing site traffic, loyalty sign-ups and long-term customer data.

Google has been moving toward native shopping for nearly a decade. In 2015, it launched its first “Purchases on Google” pilot, which allowed select merchants to offer a “buy” button within Google Shopping ads. That evolved into Google Shopping Actions in 2018, a formal program for cart and checkout on Google platforms. By 2020, “Buy on Google” was available for transactions completed entirely on Google Search or Shopping. That service was phased out in 2023 as Google began to rework the experience.

Now, with Search Checkout, which is set to be rolled out later this year, Google is bringing a more advanced version back into Search — powered by its latest software, Gemini 2.5 AI, and a broader strategy to make search experiences more “agentic”. In other words, it aims to enable an AI agent to shop and make purchases on behalf of users.

“When the price has dropped, I get a notification. My checkout agent will add the right size and color,” said Google’s Vidya Srinivasan, demonstrating the tool at I/O. Then, with just one command, the transaction can be completed.

The shift comes as search click-through rates are falling. According to a report from SEO analysis site Ahrefs in June, top-ranking search results with AI Overviews now see a 34.5% drop in clicks. Marketing research company Amsive reported in April that there is a 15.5% average decline in clicks across 700,000 keywords, with some categories losing up to 50% of clicks in keyword search.

Vladimir Hanzlik, svp at market research company eMarketer, said that almost 50% of European digital shoppers typically begin their search for new products on either search engines like Google or social media. “These are also major channels for conversion, which is why you are seeing more direct purchasing flows being tested by brands. Search, social and retail media are converging as transactional environments,” he said.

Brands currently testing Search Checkout through mobile or web include Sephora, Estée Lauder Companies, Glossier, Dermalogica, Asos and Quince. Quince was shown in Google’s I/O presentation but declined to comment on its results.

Industry sources estimate that Google charges around a 12% commission on sales through the feature. Experts note that these rates can vary by category or partner, and that tech platforms often offer promotional rates, sometimes as low as 0%, when rolling out new commerce features. TikTok Shop, for example, launched with 0% commission for early sellers. Google has not confirmed official rates for Search Checkout.

Other brands are already working to address the change. Coach is working on a 10-point plan with Google to prepare for the search developments. “At the moment, it is just an opportunity to learn more,” a Coach marketing executive said off the record. “But it is definitely top of mind for my search team and for our brand because of the impact on the site.”

According to Google, agentic checkout does not turn Search into a marketplace or retailer. Instead, the AI agent completes the transaction directly on the merchant’s site using Google Pay, with the purchase remaining between shopper and merchant. However, it is unclear how this happens since the checkout option does not log through the merchants site. Merchants must meet certain technical requirements, and Google plans a gradual U.S. rollout in the coming months.

LLMs like ChatGPT are also affecting site traffic. AI agents are diverting customers away from brand sites, which can be loaded with products and confusing to navigate, to simpler chat formats. 

Holden Bale, global chief strategy officer at market research and CRM company Merkle, sees the risk. “It is not about more transactions,” he said. “It is about connecting advertising to CRM and loyalty. If the consumer completes a purchase in search without ever touching the brand site, you lose the chance to build trust.”

Bale also pointed to the larger shift now taking place across platforms. “This heralds what we have been predicting,” he said. “Commerce will be increasingly federated, with native checkout in almost every app and every touchpoint. Advertising will be shoppable, social platforms will be shoppable. You will be able to buy in emails and text messages. And as search increasingly pivots to LLMs [like ChatGPT] and conversational interaction, it too will become shoppable.”

71% of consumers now expect more emotional, culturally resonant brand experiences, says new Future Laboratory report

Fashion loyalty programs are evolving, with brands moving beyond discounts to also offer experiences, according to The Future Laboratory’s Retail Futures 2025 report, released on Thursday. The report draws on the firm’s proprietary research, expert interviews and insights from its LS:N Global network. Specific consumer survey data was not disclosed.

“The smartest fashion brands are already borrowing loyalty ideas from luxury, like wallets, city-based activations and personal rewards to create emotional connections with customers,” said Fiona Harkin, director of foresight at The Future Laboratory.

Examples are emerging across the market. 

• Prada Mode’s traveling private club has been drawing fashion audiences since 2018, offering invite-only access to top customers. Gucci’s Gucci Cosmos exhibitions and Balenciaga’s Salon shows give priority access to loyal brand communities, while Louis Vuitton’s recent Yayoi Kusama pop-ups leaned into city-based activations designed to reward and engage existing brand loyalists.

The report highlights mood-based retail as a growing priority. Stores are being designed to reflect how shoppers feel — not just what they buy — through sound, scent, lighting and cultural cues. 

• Jacquemus’s Paris and Milan stores are a leading example, designed for “joy and play,” while Uniqlo’s partnerships with local cafés and art spaces aim to build community energy.

At the same time, fashion brands are leaning into “emotional partnerships” across categories. 

• Jacquemus recently partnered with the Oetker Collection’s Hotel du Cap-Eden-Roc to create an immersive brand experience tied to luxury travel, while Loewe’s collaboration with Suna Fujita brought playful, handcrafted art and ceramics into its product storytelling.

Retailers are also building partnerships with wellness and hospitality brands to attract new audiences and drive footfall.

And with more shopping journeys happening through AI, brands will need to shift how they think about discovery. “Brands will need to train AI agents to name-check them in conversations,” said Harkin. Tools like ChatGPT and Google’s Search Checkout are already changing how products are surfaced.

Earnings

• On June 17, Vince reported a first-quarter net loss of $4.8 million, down from a $4.4 million profit a year ago. Its sales were slightly lower than last year, and its results were in line with expectations following its wind-down of the Rebecca Taylor and Parker brands.

Executive moves

• Authentic Brands Group has named Amazon veteran Tim Derner, former director of Amazon Fashion and Luxury Stores, as its new global head of marketplaces. At Amazon, he expanded the online sales of several Authentic-owned brands including Reebok, Brooks Brothers and Eddie Bauer.
• Pendleton Woolen Mills has named Jennifer Ingraffea as CEO, succeeding John Bishop. Ingraffea was previously at The North Face as global brand president.
• David Thielebeule has expanded his role at Bloomingdale’s to men’s and women’s ready-to-wear fashion director, replacing Janelle Lloyd, formerly the retailer’s women’s director.

News to know

• Amazon CEO Andy Jassy told employees this week that AI-driven efficiencies will likely reduce the company’s corporate workforce, as Amazon ramps up its use of generative AI across business units. The company currently has more than 1,000 AI tools in development, with new agents and applications planned in the coming months.
• New York’s Fashion Workers Act goes into effect this week, bringing new protections for models, including required contracts for use of AI likenesses, mandated anti-harassment policies and limits on agency power of attorney. Model management firms must begin compliance now and register with the state by Dec. 21.
• Nordstrom will open its third Nordstrom Local in New York next week, in Brooklyn, and is planning a San Francisco location, marking renewed investment in its merchandise-free service concept following privatization. The move comes after Nordstrom pulled back from downtown San Francisco retail in August 2023, closing its full-line store and Rack location at Westfield San Francisco Centre, owed to shifting market dynamics.

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