Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
The 2023 Consumer Trends Index shares attitudes and desires from over 10,000 consumers on topics such as purchase behavior, preferred marketing channels, privacy and data, as well as what drives loyalty with their favorite brands. You can get your complimentary copy of this report along with access to several free webinars by visiting meet marigold.com. Marigold is the home of Cheetah loyalty, delivering world-class MarTech solutions and industry expertise designed to help marketers of all sizes grow the relationships that grow their business. Learn more at meetmarigold.com.
Hello and welcome to episode 357 of Let’s Talk Loyalty, which features one of the world’s greatest fashion retailers, H&M. With over 150 million members of its loyalty program worldwide, H&M has achieved some incredible results balancing its global loyalty proposition with local market needs in order to stay relevant in this incredibly competitive sector.
My guest is Dominik Olejko, who is the Regional Customer Insights and Engagement Manager for H&M in Eastern Europe. What I loved about this conversation with Dominic is firstly his incredible career spanning 15 years in retail loyalty for Decathlon, Ikea, and now H&M. I also loved his passion both for the traditional principles that drive loyalty, as well as some incredibly inspiring and innovative projects that he’s launched.
Please enjoy my conversation with Dominik Olejko from H&M.
So Dominik from H&M, I’m so happy to welcome you to Let’s Talk Loyalty.
Dominik: Likewise, Paula.
Paula: Great, great. I know you’re a longtime listener of the show, Dominic, which also completely just warms my heart as well as hearing your professional story today.
Dominik: Oh,yes I am. I love it so much. It’s a very good one. One of my tops.
Paula: Well said. Well said. That’s fantastic. So listen, Dominik, uh, H&M is a brand that, uh, I think we all admire the world over. Um, absolutely incredible in terms of your scale and your footprint and the commitment to loyalty, I think generally. I think it’s very hard for fashion retailers actually to achieve what H&M is doing.
So really excited to get your perspective, in particular from your region. But before we get into talking about H&M, Dominik, as you know, we always like to start the show asking our guests about their favorite loyalty programs, either personally or professionally, just to get a sense of what, uh, what excites you and amuses you and interests you.
So tell us what is your favorite loyalty program, Dominik?
Dominik: I really love the question and I reflected a lot on that. Uh, and as, um, fun of the membership program. At the same time, uh, as I’m working in the industry and as a smart shopper, I, um, I’m very much willing to test new programs that are entering on the market, trying to see what the values they provided in the beginning.
Paula: Yeah.
Dominik: So what I appreciate the most in the programs is the fact that they bring you a concrete value, solve the concrete problem. And gives you some economical benefits as well, of course, as a, as a base. But this should all connect with some emotions, right? So, uh, what I wanted to share is like recently I had a great chance to meet Clinique Smart Rewards program.
This were maybe not the core customer group because it’s mostly women’s who take care of their skin.
Paula: Yeah.
Dominik: But personally, I love it. Why? Because it provides such a good value proposition for the customers, and I see how they understand their core customer with the services that provide. At the very beginning, not very much connected with sales, but at the end of course it guides to the loyalty and kind of, um, very good connections with their core customer group.
Paula: Okay.
Dominik: I love their innovative attitudes and, uh, their connection between transactional benefits and emotional ones. So this I love and I must say I was very impressed what they are doing and how they work with that.
Paula: Yeah.
Dominik: At the same time, at the custom, as a customer, I have nothing against on paying, uh, for the program if this provides a good quality.
So what I’m very much impressed about and I love about Priority Pass, that, uh, enables me, uh, some great experience at the airport launch. And, uh, this is kind of experience that solves so much of my problems. And I would say that although you need to pay for that, you get such a good value proposition and I’m, I love it.
Paula: Amazing. Dominik, thank you so much. Um, as I said to you, off-air Priority Pass is a product of one of our sponsors. So big shout out to the Collinson group for the incredible work they’ve done, uh, globally for so many years, actually, and I wish I’d discovered it sooner actually, myself, Dominik, because you know, like, especially you know, when we’re flying sometimes low cost carriers, you don’t expect any benefits.
And you obviously then don’t get them, but something like Priority Pass means actually you can still have a nice airport experience. So…
Dominik: Yes.
Paula: Um, super happy to hear that, uh, that that’s really making a difference for you in a practical way. And then just the one before it, in case, uh, listeners wanted to, um, to be clear on it, it’s Clinique, so it’s the, the skincare brand.
Am I right in picking up the brand?
Dominik: Ah, yes, yes. Yes, of course. Yes. It’s a Clinique Smart Rewards program. Yes. That’s it.
Paula: Amazing. Okay. Well, I did not know that Clinique had a Smart Rewards Program. So quick shout out if anybody from Clinique is listening, we would love to, uh, share your story. So thanks again for highlighting that, Dominik.
It’s exactly the reason that I ask that question so that I can learn what, uh, loyalty professionals around the world are admiring and learning from. So definitely, uh, an exciting one.
So let’s get into H&M, and I suppose we should start at the beginning in terms of your career because you have an incredible portfolio of expertise in the retail sector.
So maybe just start by introducing, uh, the kind of work you’ve been doing, Dominik. Um, it’s incredibly impressed. 15 years, I think starting at, uh, you know, a store associate level, um, and working your way up to this incredible role with H&M. So, talk us through your career background.
Dominik: Yeah, thank you for that.
For the nice word about that. I really appreciate the fact that I started in Decathlon because that was my first journey and contact with the retail and there I, I became a store director pretty soon, and then we were opening new market and that was very interesting to see how the loyalty program increases the penetration and the present of the brand because it was by that time present.
So I had the chance, this was my first touch with the loyalty program.
Paula: Okay.
Dominik: A second, understanding how the company can use it. Yeah. But then the real power of the membership I discovered in Ikea. And uh, this was the moment I spent there eight years. And, uh, there, uh, on the different position, I was having an opportunity to observe how the loyalty program on actually membership program increases the business results.
It increased the customer satisfaction and it guides the customer through the whole process. So the added value, and I also learned one thing that is very important. It’s like the members should always get more, right. And they should be kind of, uh, more valued than the regular customer.
Paula: Yeah.
Dominik: At the same time as a passion project, I was also running a mystery shopper surveys for the few years.
Paula: Wow.
Dominik: And then, yes. And there I learned actually, that, uh, the fundamental rule of the loyalty is actually the customer experience. So as long as you’re not providing the basic to the customer, then it’s difficult to follow the loyalty program at all because you simply don’t like the connection with the brand.
Paula: Totally, yeah.
Dominik: And in time I moved to H&M and I’m very happy to work there now. And, um, I’m now customer insight and engagement manager for Eastern Europe area. Together with my colleagues, we take care about the customer centricity, customer insights, and within our framework we have also our membership program, H&M.
So this is, um, a very great privilege having, uh, such a good responsibility here.
Paula: Absolutely. Yeah. And, and what I love is that you do have that frontline experience, Dominik, because an awful lot of people I think, who listen to this show, like we come into Loyalty Orphan, I describe it as like sideways. So a lot of people come from marketing college or, or you know, they’ve been working in different areas of the marketing discipline, but not always have they got that frontline experience.
And what I’m hearing and what I’m, I’m, I’m thinking you’re saying, and please correct me if I’m wrong, Dominik, but it sounds like you both saw the impact, uh, one, one-to-one in terms of dealing with customers, but also it sounds like you had the commercial insight from the commercial business side. Is that fair to say?
Dominik: Oh yes. Um, I would say from one side to at the store, I could see how the customers can benefit of our program because you don’t have so much connections with the how the data are used. But when I move to the headquarter, like working with the product as a customer experience manager, always sales, then you realize like how powerful are the data that we have within our friends?
And if you are working with them consciously, then it’s much easier to run the business and take conscious decision or even remove the pain points, right?
Paula: Yeah, absolutely. And I know there was one big decision that was taken by our friend Adam Novak, when you worked with Ikea, Dominik as well. And I think that’s a really good insight actually, in terms of, you know, I supposed understanding what was important, both commercially and to customers, of course. Uh, but something that I think was quite a scary decision for the IKEA program. So will you tell that story Dominik, for our listeners?
Dominik: Oh, yeah. Uh, this is, uh, the funny story because we have a common friend, right? Yeah. Uh, which is Adam.
And by that time I was working in the store in IKEA, and I remember the time when there was a decision taken about removing the plastic cart
Paula: Yeah.
Dominik: From the ecosystem in order to reduce waste. And, uh, when the decision was. I was scared in the store that the customers were hated and they will say, no, we don’t accept, we want our plastic cards to have them in our wallets and have it safe.
But then I was impressed how smoothly it goes. And, uh, it was provided, of course, some extra solution in order to support it with an SMS reminder with a card number, the registration that the checkout was not smoother. So there was a replacer, uh, by, at that time it was a big break decision. This was a long time ago, but I remember this was like kind of a game changer for us.
Paula: Yeah.
Dominik: To be proud.
Paula: Yeah.
Dominik: That we don’t have a plastic card anymore. We don’t print them, so that happened.
Paula: Yeah. Yeah. Totally. And when would that have been Dominik? Because I don’t remember actually IKEA came to Ireland a little bit later than to other markets actually. We had operational limitations on those kind of mega stores, but certainly IKEA’s incredibly successful now in Ireland.
But would you have a sense of when that decision was taken just to give us an idea cuz it feels like a long time ago.
Dominik: It was a long time ago. I guess it’s, uh, more than five years, but I cannot be so much precise. But we can ask Adam later. And…
Paula: Okay, perfect. Just to gimme a sense if it was five or 15 or whatever. So, so that brings us to the old digital program, of course, that you are responsible for in that region, as you said with some fantastic colleagues.
So tell us, first of all, Just the very simple basics, Dominik, in terms of the H&M program, as it stands in Eastern Europe.
Dominik: Yeah, so our H&M program, um, it’s a, it’s a membership that contains of 50 million members currently, and we are, uh, quite proud about that. We recently hit this, um, milestone.
Paula: Wow. Congratulations.
Dominik: Thank you. Well, and this is a big, big, um, program, right? And only in Poland. Uh, we of course we work very, uh, consciously with the penetration. And if you have a look on that, it means that, uh, with a penetration, penetration on the level of 40%, this means that every second household in Poland has at least one person with the H&M membership card.
Paula: Wow.
Dominik: Which is kind of a very good result. And of course we are developing it across our region and there we try to reach new countries, still opening new country for the membership. So we are still active developing our base, but, uh, uh, of course this is still within our core customer group that we reach to aim.
So it’s not the hope, but I, we are super proud of being present there.
Paula: Wow. And globally, can you share a figure, Dominik? Because 15 million is absolutely extraordinary. So I would just love to get a sense, what does H&M globally, uh, publish, I suppose, in terms of the figures that, that you’re proud of for your membership?
Dominik: It’s growing quite fast. You know, the leaking bucket quite, it’s working quite, uh, well for H&M.
Paula: Yeah.
Dominik: Uh, but as I updated with my colleague from global Joselle, she just told me that, uh, we are more than 150 million already.
Paula: Wow.
Dominik: Uh, in total. And it’s still growing. So this is a super good, uh, news for us, right?
Paula: It’s incredible. My God. So well done to everybody in H&M and thank you Joselle, for sharing those absolute figures for us. Um, I do at some point hope to publish a league table so that we can all aspire to what’s possible I guess in terms of certainly the scale and as we all know, the, the quality of the membership is a totally different topic.
Uh, but it is quantity first. I think it is important, uh, KPI, so absolutely incredible to hear. It’s over 150 million and quite simply it is a points program I know with two tiers. Um, essentially giving, I think it’s one point per pound, per dollar. And I don’t know the currency that you’re generally operating in, but that sounds like it’s, it’s literally a 1% reward rate, but over lots of different activities as well as transactions.
So tell us a bit about, you know, exactly what you focus on in terms of driving behavior with the H&M loyalty program.
Dominik: That’s a good question, you know, because it’s, uh, it’s been evolving and I would say that this is very flexible program, of course with a certain core, like in order to engage and create meaningful relations with our customers.
So it has a both benefits for the customers and for us. And, uh, I must say that I’m quite impressed how it’s developing, uh, when it comes to the, uh, speed of the changes. Because it all started from the, like in the past we used to have, points, as you said, the transactional benefits mostly, but now it’s expanding and, uh, this is more like a mix of the realities of the program.
So from one angle, you have these two tiers that you said you can become a plus member if you spend certain amount.
Paula: Okay.
Dominik: Uh, and then you get an extra benefits, like free delivery and some free access, uh, and many more that, that you can reach. You can take part with, um, our, um, partnership strategy that we have.
So we are also very open into some coalition program and getting there with, um, some partners like Disney.
Paula: Okay.
Dominik: And for instance, recently we had quite successful cooperation for the as far as I remember, hundred years of Disney.
Paula: Wow.
Dominik: And we managed to, to, although it’s not connected, if you look at the first glance on it. So Disney and H&M.
Paula: Yeah.
Dominik: But then it turns out that we faced a huge interest among our customers, especially in our region east, uh, for attending the partnership, like having a chance to win some tickets and also getting like involved in the Disneyland activities throughout our membership program.
And it worked both ways.
Paula: Wow. And I definitely wanted to explore that, Dominik, because my background, I’m not sure if you know, actually came from developing partnerships, um, working. I was in the telecoms industry, but you know, I, I didn’t have, uh, a point space program. We did everything based on partnerships and finding a brand like Disney.
Particularly, you know, to, to find something that’s engaging to both brands and does give that, I suppose, halo effect. It’s actually quite difficult to negotiate, and I worked many years ago in, in the holiday space actually with British Airways, and I remember all of the restrictions, particularly as a global brand that the likes of Disney had to do so, so I, I fully appreciate the complexity.
So it sounds like, um, just so I understand it cuz I love to understand the detail of these partnerships, as you said. So it was competitions, um, available from Disney, which were marketed to H&M members. So I’m guessing they got incredible visibility. You got the incredible brand appeal of Disney and everybody benefited.
Dominik: That’s true. And you know, it’s always like, members always get more. So when you are a member, actually you can benefit out of it. You can win the tickets, you can go to Disneyland. And although it’s like, uh, it seems simple, but then for the many people it’s a dream. Like just to go there and win it. And the same case was, uh, in the past we used to, we do it, uh, still, but uh, it was very popular, um, to… to work with the music festivals in order to be where the customers are.
So, H&M loves music because it’s very much connected with the lifestyle. Even last year we were, um, working, we found one of the festivals in Hungary where the members could win, uh, the VIP package to attend, to see, to have a very, um, very good place at the certain point, so you could see everything, you can observe, you can feel the emotions, and then it spread the word, right? Everybody talks about it that you can win it. So
Paula: Yeah.
Dominik: It’s one of the way to win. And we are still right now investigating even more ways, maybe not that connected directly with loyalty, but if you look at the innovation part right now, like we entered recently, Roblox in order to be where our customer are.
So this is a metaverse where you can actually, uh, design your clothes. You can, uh, recycle, you can learn how to recycle, interact with other users. So creating the community.
Paula: Yeah.
Dominik: That are connected with the brand.
Paula: Yeah.
Dominik: And they are not yet the customers, right?
Paula: Yeah.
Dominik: But soon they’re going to be and have a, a already connection with the brand.
And you never know if currently, for instance, in, uh, in Roblox even now. 10 year old Coco Chanel is just designing the clothes for her avatar. You know, so, so you never know what happens and you create like totally different level of emotions if you follow and extend your program. Not only within the like, okay, I get the benefit, but something more the heart of the operation of the company, right.
Paula: Yeah, and we talk so much on this program, Dominik, about emotional loyalty and I always feel that there’s always this kind of question in the air about, yes, we know we have to do emotional loyalty, but we really don’t know how. Like what I have loved about looking at your LinkedIn profile, for example, is the amount of innovation that you are clearly passionate about, that you are sharing, that you are absolutely testing.
And I want to hear more about this Roblox piece, but this sounds like actually for you, it’s like the most exciting part of loyalty is the opportunity to do something that’s very different than has ever been done before. Would that be fair to say?
Dominik: I would say, so for me, I would say, uh, like working in market marketing industry, it’s of course the basic role that you need to be there, where the consumers are.
So even just in Roblox, which is just a small part of the whole, uh, metaverse ecosystem that’s being created right now, it’s a 60 million users daily.
Paula: Oh my God.
Dominik: So if you take, it’s a lot of people and, uh, according to different data, depending on which survey you take, you see that one of one and a half billion people are going to use Metaverse on a daily basis by, uh, 2030.
Paula: Yeah.
Dominik: So in order to bring there, at first you can discover how many opportunities comes there and the word of fashion lovers can be explored even more. So you can dress yourself with an ice cream or with a cloud or everything. So you can actually, uh, improve the, uh, possibility of extending the imagination.
And there we, uh, try to connect that of course, with a digital twin. The digital twins should have a physical twin, right in the real world.
Paula: Okay.
Dominik: So recently we have, uh, launched the collection of, uh, metaverse innovation stories.
Paula: Okay.
Dominik: Which was kind of having, um, the physical, um, product that you could buy in the store.
It was, um, a few, few months ago, I guess it was beginning of the year, right? 2023.
Paula: Yeah.
Dominik: Where we have launched the collection that has, uh, the digital twin. And you could also try it on via Snapchat. You can have some product tested, tested, and trying with, um, augmented reality. So as you can see, the technology is changing and disrupting the word of retail. And in fact, like, okay, if I’m, um, if I have a convenient experience on Snapchat with trying to put on my clothes, so I will be more willing to enter the loyalty program in the past one, it gets into the selling part, right? Because I know the brand I trusted.
Paula: Yeah.
Dominik: And we already see that within Gen Zs, it’s proven that 70% of them are willing to share the data as long as they trust the brand that they value and they see. And of course the better value proposition is that the more they data they can share, and this is like the, the correlations that we see in between, right.
Paula: I’m so excited for you, Dominik, that you got to explore and create something that most of us, certainly me, and I’m guessing most people listening, have no idea how to do. So to help me with the very basics, like Roblox, as I understand is, is a game, uh, within the Metaverse. It sounds like your strategy has been, as you said, design some items in the physical normal world of H&M fashion, and then you’ve replicated it in the digital world so that gamers who enjoy Roblox can dress themselves in these products.
Is that a good understanding?
Dominik: At certain point you could say that it was, it works both ways. But imagine that somebody… right now, it’s not happening yet, but imagine that you can actually design something in Roblox as well, and then have the physical version of it.
Paula: Wow.
Dominik: But there is, there is another thing behind it that, through that you can also promote sustainable behavior, sustainable material.
So it’s not only about, of course, it’s about promoting fashion, because we are the fashion company. We want to, uh, secure that the fashion lover have, uh, has a, has H&M as a place to go. At the same time, the crucial point of being kind of sustainable in the materials that we use, the production. And there we kind of extend this, this topic a lot through giving young people the new habits through the low Roblox, how they can sort and recycle the crawl.
So there is a lot in the gamification mode. Like you sell the good behavior and you try to, uh, show how to do it properly, right?
Paula: A, and what I think that does as well, Dominik, is it, it gives you a lot more freedom to explore what sustainability means to, especially, particularly as you’ve talked about, maybe a 10 year old.
Because what I have admired most about H&M here in Dubai is to see the messaging about sustainability coming through super clearly. And what I would say is I don’t think any brand has totally nailed it, nor will they actually, I think in the short term, I think it’s a very much a long road. But I, I feel a very clear commitment to driving this, um, intention and integrity around sustainability.
And I know sustainability doesn’t sit within loyalty as a strategy, but the fact that you’re able to, you know, have that, uh, intention. Omnichannel actually. So, and not just online and offline as most of us think about, but also through the metaverse is incredibly holistic and joint up thinking. And as you said, you’re building trust, you’re building engagement, you’re building sustainable behavior.
And overall there’s a lot of, um, just positivity I feel that comes through for H&M with all of those, um, little, I suppose, ingredients to to, to combine to something that’s incredibly compelling.
Dominik: I fully agree and I would say that, um, we should even say that when we talk about incentivizing the customer, because H&M was one of the first company worldwide that started to incentivize for sustainable actions like cloth collection, garment collection that you can recycle within the store.
Then you get some extra, uh, benefits out of it. Like the, the actions that you do towards sustainability are included in our program and we are super proud of it. We are gonna develop that. Of course we are on the way and as a fast fashion retailer, we have our ambitions goal to, to win towards sustainability. And uh, yeah.
So this is, uh, something that’s, uh, worth to mention.
Paula: For sure. And again, I think what it does is it provides evidence for what I think are quite cynical consumers in that there are a lot of people talking about sustainability and again, maybe not necessarily delivering it. So it’s one thing to have the messaging really clear.
It’s another thing to demonstrate exactly how you’re achieving that. What I also liked as well, Dominik, and, and this possibly doesn’t sit within loyalty, but just from, um, a UX perspective, and I know you have that responsibility that the customer experience is, you know, part of your role. So I read about this idea where you can scan and find stocks.
So if I have the H&M app, I can actually check the inventory if I go in store and they maybe don’t have my size or the color and I want to check other options. So it really sounds like you approach everything from the customer pain point, resolving that in a digital way, and then where it makes, I suppose, commercial sense layering in the loyalty piece.
Dominik: Uh, it, I think so of course we are on the way and we are super humble, uh, with that because there is always, with customer experience, it’s a constant work. It never stops. So, uh, at the, at the same time, we are super proud of our app. This been awarded even, uh, recently in London for one of the best app experience.
And, uh, there, what you mentioned, you can, you can search for the product because technology is enabling us with the RFID growing and uh, the stuff that you can search by image. So that helps a lot and improves the convenience. And we believe that the app is an enabler for the customers to get in touch with our brand.
Paula: Yeah.
Dominik: And really get into our funnels to communicate with our customers, to get to know their feedback, what they think about our offer.
Paula: Yeah.
Dominik: This is the place where actually the magic happens. So it’s the smallest store that you can hide in your pocket, right? So, yeah.
Paula: And, and how do you get the customer feedback, Dominik?
I mean, what’s the, the H&M approach to, to really hearing, you know, what it is that particularly those younger demographics are saying because it’s changing so much all of the time and you know, sometimes there’s mixed signals. I feel be, you know, as marketing professionals, we have things that we aspire to, whether it is sustainability or it is a charity proposition, and then sometimes the behavior is quite different after you launch it and it doesn’t maybe succeed or live up to your expectations.
So, so how do you guys manage that piece about listening and deciding what to develop and, and roll out for your members?
Dominik: Uh, I think it’s a very complex topic, and I would start from the fact that we really try to be as much customer centric as we want. The best proof of it is like we are going through the transformation.
We just finished certain part of it, and that’s how our regionals created. So my role has been designed like being very close to the customer, being a global brand, and trying to gather what’s most important for the customers in certain parts of the world. As we have, um, such, uh, such a big scope of our operations, right?
Paula: Yeah. Yeah.
Dominik: So what we do, of course we work with MPS and, uh, by touchpoint survey in order to understand what happens on the journey. And of course we try to use certain platforms in order to understand the customer feedback in terms of, um, the comments, open comments that we analyze, utilizing the technology, trying to conclude.
And this is the basic things that we do, but we are also using a lot of listening of our customers through loyalty program. And this is very interesting, um, that I know many companies practicing, but not every, um, of them that I know. Uh, it’s like having the communities inside the countries that you ask your most loyal customers for the certain things.
Paula: Yeah.
Dominik: Uh, and then trying to understand what are the pain points you can test? You can try, you can hear the feedback instantly about the changes that you implemented. Mm-hmm. and that creates a kind of trust that okay, we are, uh, aiming it to the right direction. Mm-hmm… So I would say, although we have a lot of, uh, qualitative data that are coming from the open comments and quantitative coming from the numbers, we also have this like, uh, focus groups and everything connected with, um, with the fact that we want to understand our customers even better.
And of course, in terms of the external insight, insight in, uh, so I would say outside in, of course, uh, it’s more about corporations with, uh, big agencies that are providing the survey, trying to understand the industry, monitoring what’s going on, on the competition part, like not only in fashion, but also what’s going on on the general market.
Just trying to monitor the trend, uh, universities are also the part like we try to listen to and, uh, being close to that, especially in the dimensions already. Like we talk a lot about the, uh, sustainability area, like just to see where is it going and, um, the think that maybe I might share. Uh, a few days ago we have announced a cooperation with, uh, as a H&M group.
We announced the cooperation with Ramon, this group, which is about to create a kind of a joint venture to collect so, and sell used and unwanted garment and textiles in order to make an even bigger impact. So, listening to the industry, trying to understand how it goes, and we are really proud of it.
Paula: Incredible. Congratulations on that. Yeah, that sounds like a huge project. Wow. And yes, the, uh, the spirit of innovation continues. I can hear coming through. I, I always love the, the focus groups. I think most marketeers and certainly loyalty marketers. Always, um, aspire to it. I, I don’t think it’s always in the budget to have, you know, at a regional level, um, dare I say, or even at a country level.
And I was looking up, I suppose, some of the global statistics as well just before we came on to record together. So obviously it is a, a Swedish company for anyone who doesn’t know the origins of H&M, but incredible you guys are in 75 countries and 120,000 staff. So incredible just to see the scale in terms of what H&M is achieving, and I think you’re also Europe’s largest clothing retailer, if I’m not mistaken. Am I?
Dominik: Uh, we are, uh, competing with some, the biggest one, but we are on the top for sure, like…
Paula: Wow.
Dominik: One of the top fashion retailers in Europe as well.
Paula: Amazing. And you alluded, uh, Dominik to, I suppose, the global nature of, you know, whether it is the, you know, the customer research and insights, but from a loyalty perspective, how much would you say is driven at a, a central brand level, let’s say, in terms of, you know, expectations of what your loyalty program is gonna deliver versus, you know, having the freedom and flexibility and I guess relevance for local markets, because you’ve mentioned your role has been created specifically to reflect what customers in Eastern Europe are looking for.
So I’d love just to understand how the company is managing that and how you experience that as the regional person.
Dominik: I think very valid question, especially, uh, like when you talk, when it’s global versus local, you, you tackle the glocal perspective.
Paula: Yeah, totally.
Dominik: Uh, and what we want to achieve while being a global brand, it’s being closer to the customers.
And if you take only like the Chat GPT discussion and Open AI supporting the conclusion, taking from the data, then you end up with the conclusion. Maybe in the future we will be able to have a hyper personalized experience.
Paula: Yeah.
Dominik: And there from the other angle, you have brand identity, how to secure that.
The brand identity is kept together with hyper personalization. This is a dilemma that everybody is facing. So.
Paula: Totally.
Dominik: I see here that the relevancy plays a key role. So, um, what we want to do is try to remain common with the general framework of the program, but there we see the relevancy part in how the benefits look like and uh, how it’s reflected in the partnership that we mentioned already.
Paula: Okay.
Dominik: How we can secure the digital tools for the markets to implement the partnership because it’s like the technical part behind it. Of course, and as you mentioned, like the leg legislation and how to be compliant with, uh, with the brands that we co-create with. And this is, uh, what we are trying to make sure that we partner it right and we do it in the right way.
So there is surprisingly, there is not so much brands that can be so relevant and global at the same time in terms of the partnership.
Paula: Yeah.
Dominik: So our role here is to find the right stakeholders that are most relevant for the customers here and try to, uh, focus on that. And I would say this would be something that would be the biggest challenge, uh, across.
And also the generations like how to secure that, the program on the regional level. It’s also reflecting the certain generation needs as we, as we talked already, but it’s not only Gen Z, but we have also generations that are quite older. Still the core, um, customer group that has a certain expectations towards the benefits and how the program should look like, how we should communicate it, and how we should talk through.
So trying to be more relevant. It’s one of the biggest, um, challenge, uh, we face.
Paula: Yes. Yeah. Well, again, hyper-personalization is something that we do talk about on this show. I think a lot of, uh, practitioners are struggling to achieve it. Um, I think, you know, it, it’s only going to increase, uh, by listening.
And of course the technology is getting so much better that, um, you can start to apply this. Um, and, and particularly what I like is, as you said, you know, being able to, to harness the power of other brands and being able to offer, you know, what it is that H&M has in terms of scale and insight creates a very compelling partnership proposition, I suppose, as things stand.
So, so what I like about, you know, our conversation is, you know, we’ve looked at the past, I guess, in terms of getting the basics right and that includes the, the core product, whether it’s online or in store.
Dominik: Yes.
Paula: Getting the core loyalty program, of course, in place with those two tiers. And, and I particularly like, for example, things like free delivery as a premium benefit.
I do think that that’s something that has to be done. Like I know myself, I’m pretty addicted to Amazon Prime now. And again, to your point earlier, I’m happy to pay for it. So, so what I’m hearing is that H&M has done an awful lot of the groundwork. But still for the future, it feels like you are, you’re building, you are exploring whether it’s, you know, Snapchat or Roblox or you know, all this AR, VR, you know, Metaverse stuff that I see on your LinkedIn.
And I was even, I was, I was amused at myself earlier because one of your posts was very simple. You know, everybody knows about goo Google image search and I’m. I, I don’t think I’ve ever used Google image search. Like I feel like I’ve missed out . So I think that’s a huge opportunity. And again, coming from your perspective as a fashion retailer and for people who do sometimes see something and go, I really want that outfit or whatever, like there’s so much excitement coming up in terms of what H&M can do in the future I think.
Dominik: Actually what you just mentioned, it’s a good news because in our app you already have the visual search as well incorporated. So if you are interested and you like someone’s, uh, part of the government, you can already scan it with the app by having it.
Paula: Wow.
Dominik: That’s a good news for you, Paula. Right?
Paula: Well, you know, I’m gonna try that this weekend in the H&M here in Dubai.
Dominik: Do so, do so. You are more than welcome. And uh, just to say one word, like for instance, it comes to the, uh, free delivery and for the premium members it’s like forever. So you always get free delivery and free returns, but if you just enroll to the program, you can get it for free for the first time as well.
Paula: Amazing.
Dominik: So we are trying to mix it and trying to extend. So the more, um, advanced you are in our funnels, the more you get, right. So you, you get this benefit.
Paula: Cool. Yes. Amazing. Amazing. Well, yes, actually I think that’s good. I know there was one guest I remember talking to, I think it was American Airlines, and they had a specific KPI about the speed to first engagement within their loyalty program, which I think is what I’m hearing coming through in yours. So if you make that free delivery, the first benefit available immediately for an order, then of course you’ve, uh, you’ve educated people, you’ve delighted them, and of course, then they aspire to being a premium member. So I think that’s a clever strategy. Yeah.
Dominik: Yes. And when it’s, when it is connected with the discount, the beginning discount as in our case, then it’s, uh, even more. And of course we, when it comes to the KPI, we are measuring something that it’s called early repeat rate. So how fast after the first purchase, you do the second one and you come back to, uh, to the store again.
And of course, the goal of the brand is just to make the second purchase as soon as possible.
Paula: Okay.
Dominik: So then there is a high probability that we’ll stay within our channels, right?
Paula: Totally.
Dominik: At the same time. At the same time, it’s very connected with, um, NPS. That’s, it’s worth to mention that I said at the beginning.
Paula: Yeah.
Dominik: So it’s not only about how you name it, but it’s about the experience you provide. So I guess there is some kind of a correlation between the high NPS and the retention and the frequency of visits. Right. So as I said, I, I’m the big fan of securing the basics first and then extending it by other layers of the program.
So you are getting more involved the more you trust the brand.
Paula: Yeah, for sure. And I’m, I’m guessing it’s too commercially sensitive, so I won’t ask you what your NPS score is, but maybe in the future, if you’re coming back on the show another time, it might be something that you, uh, can discuss, uh, publicly. I’m not sure what the protocol is, but um, I’m always curious off air sometimes just to even understand how it feels like you’re doing an NPS.
But it’s a great framework. It’s not perfect, but wonderful to hear that that’s a key focus for H&M and something that you pay close attention to.
Dominik: What I can say is like, I cannot give you the precise number, but we are monitoring that how we are versus the industry. And in many, in many countries, uh, we are above the average, uh, especially, uh, the consumers love the smoothness of shopping and the convenience and the online experience is, uh, very well, very well, uh, rated by the customers and for the stores.
We, we see that it’s growing as well. So we kind of, uh, work with that quite conscious when it comes to bingo. Above the average, trying to provide new experience. And we do a lot and you will see that soon. Like, uh, also you had this store, Reagan Street, in London that has changed their experience at all for the customers.
Rev, like for H&M, it’s a revolution how we provide the services and the support digital tools in the store.
Paula: Okay.
Dominik: So there is also interesting movement going on, like how to elevate the experience in terms of the inspiration and how to make it more smooth even across the channels and utilize the fact that the technology can be invited to the stores, like to have this, uh, digital thread across here.
Paula: Yes, and I saw that actually in your LinkedIn as well, Dominic, this term, the digital thread. And I wanted to understand what it means. So I’m glad that you actually explained it there. I think it’s a, it’s a great mindset to think about how you have that, you know, customer focused experience and relationship that is connected digitally, uh, through that thread, that concept, but comes back to what matters to the individual customer.
Um, so kind of stitches it all together, which I think is probably a good analogy given that you’re in, uh, the stitching business, huh.
Dominik: I, yes. And I’m, I’m really hoping that is gonna develop even more in the future. This is the direction. Yes. And we still, uh, stay on our toes in order to be better every day.
Paula: Absolutely. Well, I can hear that coming through. So I think that’s all of my questions, Dominic, for today. Um, what else, is there any other topic that I didn’t ask you about that you think is important for our audience to, to understand about H&M.
Dominik: Well, I guess we talked, uh, quite a lot. Uh, and from my perspective I’m also wondering what’s your perception of our brand.
So if, uh, uh, like as a listeners and if you like it or not, so you can reach me out on LinkedIn. It’s easy to find Dominik Olejko. And if there is anything you would like to ask or deep dive, I’m super open to talk. Uh, this is what I wanted to say.
Paula: Amazing. Yeah. And honestly, if I was listening to this show and I worked in fashion retail and loyalty, Dominic, I would absolutely be getting straight onto to, to connect with you in LinkedIn.
So we’ll definitely make sure that your profile is in the show notes for this particular episode. And thank you for being so generous actually, in terms of being available for our global audience. It’s often, you know, a lot of time of course, for you to prepare and join us on the show and to be able to share all of your knowledge.
So it’s incredibly valuable that we’re able to share it with so many people. But also the fact that you’re willing to chat with, uh, with anyone who has additional questions is very generous of you. So thank you for that. Any other parting words of wisdom? Are you happy with that?
Dominik: Yes. I, I wanted to say also thank you for the invitation and it’s a joint venture.
Like many colleagues were supporting the information from different areas, uh, about our loyalty program in order to provide it for you guys, for the listeners, and for new Paula. And, uh, what I wanted to share, it’s uh, maybe one thing that came on my mind that I believe the crucial part of the loyalty program, it’s the people who work in the store and recruit new members as we know that the store is kind of a core of the recruitment where we get people enrolled and this is still remain the main channel to get them.
And I guess our colleagues in the store makes an amazing work in onboarding the customers, making them aware of the benefits that, you know, it’s not that easy if the problem, the com, the program is so complex. So I wanted to really highlight that, that there’s a big, big work be behind to make the program working.
Paula: Yeah.
Dominik: And I, I, I hope that I manage to encourage you to, to join the program or maybe visit the store and check this out, uh, online or in the store personally.
Paula: Oh, you definitely have Dominik. So, with all of that said, uh, first of all, wanna say huge thank you. Want to make sure that everybody connects with you to avail of your expertise.
So Dominik Olejko, Regional Customer Insights and Engagement Manager for H&M in Eastern Europe. Thank you so much from Let’s Talk Loyalty.
Dominik: Thank you so much.
Paula: This show is sponsored by the Wise Marketer, the world’s most popular source of loyalty, marketing, news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 500 executives in 38 countries as certified loyalty marketing professionals.
For more information, check out the wisemarketer.com and loyaltyacademy.org.
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