H&M and google Cloud is about to announce a strategic partnership that will inject more intelligence into the core of the Swedish fast-fashion retailer.
Notably, their connection isn’t brand new, as the companies have been working together for a while. But this marks a new threshold in the partnership. Essentially, it means they take the relationship to the next level.
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Alan Boehme, H&M Group‘s chief technology officer, put it in the forthcoming announcement: “We are now accelerating digitization further because we believe in sustainable growth, enabled by advanced analytics and technology.”
The work includes what’s known as a “datamesh,” a system designed to provide greater access to all types of data and events from multiple areas of the business, spanning stores and e-commerce, as well as the brand’s ecosystem and suppliers. .
The latter is significant. One of the stated goals for this deal is to address H&M’s supply chain – a key area that is recent conference call†
Although the retailer reported a blistering first half of the year, with sales up 20 percent, CEO Helena Helmersson warned of inflation concerns dragging on sales, a concern that is making H&M weigh on price increases. Meanwhile, Nils Vinge, Head of Investor Relations noted that supply chain challenges can be eased on the sourcing side of textiles and materials, but not when it comes to other logistics, such as transportation. That calls for adjustments in purchasing.
“We will be adapting them throughout the fall to better adapt to the new situation and to maintain the high precision we offer,” Vinge said. Knowing how and where to make changes is crucial, and the google Cloud deal seems to be at least part of the equation.
While that works at the back of the house, the AI and data backbone could also have implications at the front. According to Eva Fors, managing director of Google Cloud Nordic Region, the partners look forward to creating “new and exciting customer experiences, whether that be in-store or online.” No other details were offered, but in the fashion, home, beauty and other categories, algorithms are all the rage for everything from product recommendations to augmented reality refinements.
Google’s cloud business had an excellent first quarter, with revenue of $5.8 billion up 44 percent. While it still follows Amazon Web Services and Microsoft’s Azure, which grew 36 percent to $18.44 billion and 32 percent respectively to $23.4 billion in the first quarter, Google Cloud outperformed its rivals in percentage growth. .
Some of that momentum may come from retail reach, especially in fashion. The tech giant has steadily expanded its base in that sector, especially in recent years.
H&M can be an ideal match as a partner, as the fashion retailer is no stranger to data intelligence. The company employs its own data engineers and analysts (more than 200 in fact), and according to current job openings, it is still hiring. Their work covers everything from forecasting demand and spotting trends to optimizing for a more sustainable supply chain — an issue that Google Cloud also advocates.
This week, the tech giant unveiled an “Earth Engine” service at its Google Cloud Sustainability Summit, to provide access to more than 70 petabytes of “analysis-ready geospatial data,” the company said.