How H&M Is Reimagining the Ecommerce Business Model With Their New Brand

Conscious consumerism versus fast fashion — do people want quality or an appealing price tag?

In line with their efforts to help their customers make more sustainable fashion choices, the H&M group recently launched a new retail brand that aims to bridge this gap between quality and price.

That brand is Singular Society, based in Sweden. The H&M group soft launched it in December 2020, and it quickly started gaining traction across Europe.

Before your mind drifts to the H&M stores you might initially think of — Singular Society’s business model is a radical departure from the model traditional retail and ecommerce brands use.

For a small monthly membership fee, Singular Society provides its customers with timeless, made-to-last products, at the cost it takes to produce them.

Subscription services are increasingly common — the strategy has grown over 100 percent in the past five years. But Singular Society’s subscription model is more like an exclusive membership that unlocks great deals on a diverse set of products, rather than the more traditional replenishment of items like toilet paper or coffee.

At the recent Nordic Ecommerce Summit, I watched Erik Zetterberg, co-founder and creative director at Singular Society, share more about the business and marketing strategy that drives this innovative venture.

Erik’s keynote raised an important question: Is the typical ecommerce business model designed for customer value, or can brands do better?

If you missed the session, you can check out the full recording — or keep reading to learn my top takeaways about the business model that Singular Society is pioneering, plus the latest on their marketing strategies.

The inspiration behind the business

When explaining how he and fellow co-founder Daniel Herrmann came up with the concept behind Singular Society, Erik shared that solving a new problem for people was a central driver.

“We looked at it from the customer perspective and realized that — a lot of the time — customers don’t get great value back from businesses. It’s this conflict of interest between a brand and the customer, where the customers always want the best value, whereas the company makes money from adding a gross profit margin to what they sell,” Erik described.

"A lot of the time, customers don’t get great value back from businesses. It's this conflict of interest between a brand and the customer, where the customers always want the best value, whereas the company makes money from adding a gross profit margin to what they sell."

Erik Zetterberg, creative director at Singular Society

From this tension of how to prioritize customer value while creating a sustainable business model, Erik and Daniel took inspiration from other innovative brands — like how Netflix and Spotify revolutionized movie rentals and the music industry.

“The companies that have really changed industries have all pivoted towards a subscription-based model. And then we thought, ‘Can we do something similar for retail? Can we make that work?’” Erik shared.

“We realized that if we, as a company, pivot to making our money from a subscription fee, instead of the products we sell, the value for the customer is incredible,” he went on to say.

And so the business model for Singular Society began to take shape. A cashmere sweater that would otherwise cost 190 euros could be available to Singular Society members for less than half that price.

Singular Society's pricing model

“We have no separate agenda than our customers, since we don’t make profit from what we sell — we offer products as a service instead,” Erik explained.

This products-as-a-service model bears strong resemblance to software-as-a-service businesses — except instead of a monthly fee granting access to use of a streaming service, members get access to curated products.

How does a products-as-a-service business model work?

The goal of this business model is to reimagine not only the method by which customers shop for their products but also the approach to consumer purchases. While a brand focused on short-term sales might sacrifice quality to reach an appealing end price, Singular Society doesn’t have to make those tradeoffs.

“The promise to our customers is to offer our members uncompromised quality at the price of what it costs to make [the product]. We hope the model can contribute to less overproduction and possibly less over consumption, as well,” Erik said.

“When we’ve identified a product we think our members need and want, we then try to find a manufacturer we believe is the best in making that specific product or category of products. And when we develop those products, the cost ends up being a consequence rather than something that we work towards,” he further explained.

These products are sold both on Singular Society’s website and in their showroom located in Stockholm, which work in tandem since the brand can use Shopify, its ecommerce platform, in its physical store locations, as well.

Photo of Singular Society's store.

“We’ve actually integrated Shopify into the physical store, as well. And apart from perhaps one or two perks that you might be missing, it’s been running really smoothly. That’s thanks to Shopify, Woolman [our marketing agency], and Klaviyo as partners — our systems integrate and work really well together,” Erik commented.

Since they’ve been able to save time with their software integrations and a great marketing partner in Woolman, the Singular Society can spend time on what matters most: their brand.

“We’ve been able to focus on creating the product assortment, communicating about it, and connecting with our members,” Erik said.

So, what does connecting with their members look like? Erik shared more about their strategy to give people a look behind the scenes of how such an innovative brand approaches marketing.

Core tenets of Singular Society’s marketing strategy

Singular Society drives up to 46 percent of monthly sales from email. With open rates averaging at 66 percent — nearly triple the industry average — they’ve found significant success in building relationships with their customers through email.

Wondering how they achieve these numbers? It comes down to creating content that’s as customer-focused as the business model.

“Our newsletters are at the core of our communication, apart from what we have on our own channels (the store and the website). We have a couple of really simple principles,” Erik says.

1. Create substantial, relevant messages

“When we send out the newsletter, it has to be relevant. It can never be just about us. And it has to be something that we think our members want — it contains actual information,” Erik said.

And while discounts are often the subject of ecommerce emails, the Singular Society can’t fill out their content calendar with weekly sale emails.

“Since we don’t add profit margins, we can never really base our emails on sales or discounts, or anything like that. It has to be more substantial,” Erik added.

So what do their emails actually look like?

“We focus newsletters around new products that we’re launching. And we always try to connect on a more personal level by contextualizing the story for them and then going into why we made the products, why we think it makes a difference, and why it matters,” Erik said.

Example of a newsletter from Singular Society

Example of an email from Singular Society

2. Less is more

Next, Erik stressed the importance of never overloading customers with too many messages.

“We look at building customer relationships as a friendship — and a healthy one, I should add,” he said.

“We all have one of those friends who keep texting you time over and time over with not-so-interesting messages. After a while you start thinking, ‘Alright, yeah I’ll answer him, but maybe not today, or maybe not directly,’ and then time passes and you almost stop reading the messages. So we try to send as few newsletters as possible, but make them matter,” Erik explained.

3. Focus on long-term relationships

The final guiding light the Singular Society team uses for the marketing strategy is to not lose sight of building a relationship with customers that will last.

“When we look at our relationship with our members, it’s very different than how you would approach selling products traditionally, where the short term really matters and you need to meet your weekly goals,” Erik said.

“For us, our business is a service. And for that to play out well over time, we have to have a long-term perspective. That’s all that matters — the relationship and the loyalty that we are able to build with our community of members,” he went on to say.

"Our business is a service. And for that to play out well over time, we have to have a long-term perspective. That's all that matters — the relationship and the loyalty that we are able to build with our community of members."

Erik Zetterberg, creative director at Singular Society

How Singular Society will keep customers front and center

From their marketing strategy to the business model, Singular Society uses their desire to drive true value for customers to drive their business decisions.

“In a way, we’re selling a dream. But we’re not doing it with a lifestyle aspiration and status seeking at the core; we’re doing it with the product itself as the hero for our customers,” Erik said.

He went on to show just how focused the team is on being a solution for their members.

“We sometimes joke that if in the end our members say, ‘Guys, you can stop with everything, all we want is hand soap,’ then we’re a hand soap company. But so far that’s not the indicator we’re receiving — people seem to enjoy the product mix and there also are new arrivals coming in,” Erik said.

Whether they become the next leaders in hand soap or something else, Singular Society’s business model is hitting a chord with their customers, even only six months after launching. I can’t wait for next year’s Nordic Ecommerce Summit to hear about the progress the team will have made by then.

Want to build a customer journey that makes your brand stand out? Check out these resources on making each step of the experience memorable.

Ready to grow your business with the same marketing platform that Singular Society uses?

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