H&M, a clothing retailer with shops present in over 70 countries globally, decided that free shipping is unsustainable for profitability. In sixteen of the countries that the retailer operates in, H&M has introduced a loyalty membership. However, they have now started introducing a minimum order amount for their members if they want free shipping.
The H&M Membership programme has two levels, basic- and plus-member. Based on how many points a customer has earned during the past year, they will be split up in either one of them. In the UK, basic members will have to spend at least £20 in order to receive free shipping (or free click and collect). In Germany (€22) and Sweden (200 Swedish Crowns), this minimum order level is equivalent.
Must have for customer experience
Free shipping used to be a must-have customer experience for retailers, not only on their own platforms but on marketplaces as well. However, profits are tightening and costs are continuously increasing for retailers. It is therefore very likely that other sellers and brands will follow H&M by limiting free shipping (either economy or express) and start tying minimum sizes to orders.