H&M Pivots to Big Data to Spot Next Fast-Fashion Trends

The 71-year-old fast-fashion chain is aiming to arrest a slump in same-store sales that has lasted 10 straight quarters as it faces problems bedeviling the industry: A spike in online shopping has led to fewer customers visiting stores, and digital startups are putting up fierce competition. H&M has repeatedly slashed prices to clear out $4 billion of unsold goods, and its shares are down 56% in the past three years. H&M, like most retailers, relies on a team of designers to figure out what shoppers want to buy. Now, it's using algorithms to analyze store receipts, returns and loyalty-card data to better align supply and demand, with the goal of reducing markdowns. As a result, some stores have started carrying more fashion and fewer basics such as T-shirts and leggings.