Part 1 Distribution
The Hennese&Mauritz(H&M) brand is an international wear enterprise located in Sweden which deals in designs that move quickly in a fashion outfit for women and men, which is in 62 countries and it was estimated to be having over 4,500 stores and around 132,000 employees in 2015. H&M is the runners up global wear retailer, lagging behind Inditex, a company based in Spain and the organization(H&M) majorly depends on online shopping as its primary seller preference, having a total of up to 33 countries using it.
Erling Persson, the founder of H&M in 1947 had his first shop in Sweden at Vasteras, which at first dealt with women’s clothing only and In 1968, Persson managed to acquire Mauritz Widforss, his competitor who later on brought the inclusion of menswear, a commodity which led to the change of the company’s name to Hennes & Mauritz(H&M). In 1974, the Stockholm Stock Exchange managed to list the H&M brand, which thus led to an achievement of opening its first shop in London outside Scandinavia that is back in the year 1976.
H&M is one of the oldest clothing company which is commonly known for its affordability price and maintaining low costs and a fast time to market their products. H&M acquires its labor from countries such as Bangladesh and Cambodia to cut the labor cost during the manufacturing of their clothing brand. Moreover, H&M uses a tactical skill whereby it does not own any factory but rather a partner with suppliers worldwide who mostly are in Asia and Europe and has a team of employees who deal in house design and also focus on the trend forecast of clothing design. The H&M company also has a quick response manufacturing process which capitalizes on design trend immediately.
The H&M brand continued its expansion in Europe, where it began to retail its product online after purchasing the domain hm.com from an institution known as A1 in the year 1998. On 31 March 2000, H&M opened its first branch in the U.S. along the fifth avenue which marked the start of expansion outside of Europe, and thus H&M brand decided to expand its sales after a conference that it would start vending home furnishings as part of its new service. H&M achieved its most valuable global brand after being ranked by Interbrand having launched concept stores, for example, Cheap Monday, Monki, and COS. The leading market of H&M products is Germany which has a total of 466 stores, then followed by the USA which has 575 stores, the United Kingdom comes third and has a total of 301 stores, followed by France which has 238 stores, and finally in the top five list is China which has 535 stores.
The main expansion plan of H&M is to integrate stores and continue online shopping, which has now covered 47 markets. However, H&M also considers expanding its market using the franchise to countries such as Mexico and Egypt, and in 2019 H&M plans its most massive e-commerce marketplaces launch at Myntra and Jabong in India. In Bosnia-Herzegovina, H&M was well received by its occupants after the opening of the first store in Banja Luka on 21 March. To finalize, H&M plans a closure of approximately 160 stores, which will help in store optimization carried out, For example, renegotiations and adjustment of store space ensure that the store portfolio is well suited for the target market.
H&M also deals in wholesale clothing for women, which consist of more than 700000 goods and H&M managers help their customers in making the correct choice of products by giving you useful information about their brand. H&M does not mostly rely on mediators since they are independent firms which assist the smooth flow of goods and services from producers to the end users. In countries like the US, where H&M does not have intermediaries, the brand utilizes multichannel marketing by online selling and selling to stores, which enables them to acquire a more extensive customer base.
H&M started as a retail store back in 1947 and later on opened branches around the world, which deals exclusively in women’s clothing. For instance, H&M stores are in Europe, Asia, or even North America and later on, H&M faced one of its most challenging markets when it launched its first shop in Ginza, Tokyo, where H&M faced the sales drop due to the economic recession. However, H&M focused on e-commerce, which was seen as a growing platform and had no geographical boundaries, which is an excellent media to promote the brand and its products and thus H&M has a mobile application which helps customers shop at their initiative and easily accessible.
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H&M does not support franchising since it does not consider franchise as a part of its general expansion strategy since the company directly controls most of the stores and thus in some markets, H&M collaborates with partners because of regulatory reasons. H&M uses virtual flagship stores as a marketing tool which has a mirror speech and face recognition features that attract customers as they walk up to it. Moreover, the virtual flagship mirror is a program for customer interaction, like taking selfies when directed.
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Part 2 Retail
H&M considers that the location of a store has an impact on the success of a retail store, For example, a store should consider the demographic numbers before its placement since this will determine whether the store has pedestrian flows or few people visiting the area. Secondly, a store should find an existing retail activity; this can be by direct competitors who will, later on, help in price determination. Thirdly, a store should consider the shopping patterns of clients as they can know their target market. H&M would be able to see if they will meet their operational costs, e.g., labor rates, delivery cost, and insurance cost and thus H&M will consider putting the latest fashion trend on display, which will help in acquiring customer attention.
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H&M has a strategic buying process which helps the consumers in acquiring what they are looking for and help them learn services they want to purchase; consumers have to make a purchase decision in accordance to the good they are willing to buy. Secondly, Information search, it is the gathering of information about the choice a person has to make regarding product data from the internet or even newspapers. Thirdly, Evaluation of alternatives, H&M helps customers do research well to be able to make decisions in their choices by either doing comparison and evaluation of products.
Fourthly, Purchase decision is the point whereby customers have already made up their mind on what product to take; however, these decisions influenced by the perception of a product. To sum up, Post Purchase decision, basically it involves customer feedback after acquiring a product. Market segmentation also affects the buying process in that it divides customers into groups who have similar needs. Moreover, market segmentation helps in better allocation of resources due to the limited resources.
H&M has various business models which include; Retailer who sells directly to the consumers after acquiring products from a distributor who ensures customer satisfaction. e.g., Monki. Also, there is the use of franchise which is used by H&M in countries with no exemption of trading. A franchise is a manufacturer who takes advantage of a situation where instead of having a new product, they use the parent business model to gain while they are paying royalties, e.g., Zara. Most importantly is the use of e-commerce, which focuses on selling products on an online platform or web-store through the internet.
H&M bases its pricing strategy according to the customer’s needs and due to its affordability in price, which is relatively low compared to other clothing companies. To begin with, H&M does its production in countries where it’s able to outsource cheap labor, thus making it reduce the price of their commodities. For instance, products which target the European market follow the manufacturing process in Turkey due to its nature of a short product life cycle and the low transportation time, which lowers the risk of products damage.
H&M has duties and responsibilities, which gives the employees the task required to perform, a good example, is a sales advisor has to deliver customer service and monitor stock on the sales floor. Moreover, a sales advisor merchandises duties to the junior staff, which includes; arranging garments on shelves and help in operating a cash register. H&M has auditors who help in monitoring the stock control and also make inventories for the company, and H&M has a marketing department which helps in brand building and creates a multichannel campaign for the company.
H&M has some key performance indicators which include; Measure, H&M has an expressive measure of figures which hands them a good plan. The target in each KPI should match the action and period of the company and ensures that data source is clearly defined since it helps in measuring and tracking of data and gives accountants a reporting period, which also serves as a good key performance indicator for the clothing company.
Part 3 E-tailing
The change of format has made H&M become the second largest clothing retailer in the world, where H&M takes a minimum of two weeks to design new clothes and execute them to the market. H&M has various virtual flagship tools like Olark, which facilitates interaction with clients through chatting as they can consult about products which they are in doubt with and also conduct an active campaign which is a marketing tool that helps boost sales via the email by gaining new subscribers and thus establishing a close relationship with clients. H&M remarkets its brand by the use of an entire audience, which makes clients who left your online site return to e-commerce.
The brand H&M supports capsule collection by taking part in events such as LGBTQI equality which shows love for all for women and men by donating a certain percentage to the UN by getting 10% from clothes during a specific period. The project LGBTQI equality is purposely for fighting for equal rights and diversity among people. H&M uses pre-collection as its marketing strategy, whereby it can attract wealthy customers and ensures that brands are available in the store and also deals in exclusive online shopping, which concentrates on one product line, e.g., for women clothes only.
H&M is well known for its mobile application, which is both in android and IOS that has led to an increase in brand awareness and sustaining life of an online business. The app has made it easy for customers to access services and for the company to communicate its business plan and fashion where H&M uses mobile apparel, which is a developing application used by an online retailer and has led to an increase in brand impression by around 10.6 million. H&M uses mobile optimization that makes searching for products more manageable and gaining the trust of consumers and thus ends up on a recommendation.
The delivery policy of H&M is that they deliver orders with utmost diligence by the region selected for delivery. However, H&M times faces the problem of dispatch orders and thus return and replace them as fast as possible. H&M also has withdrawal policy which states that “An order is subject to cancellation if it has exceeded 30 days of shipping where a customer will be refunded the full amount, and there is additionally the policy of returns which guarantees a full refund by section 5 (withdrawal of Order) which states that the item returned should not be damaged or worn.
The Hennes and Mauritz have marketing mix decisions that follow specific decisions before the introduction of a new product which is a unit that an institution wants to supply in the market and can be either tangible or intangible. Also, Price is the other marketing mix, which means the amount that a client pays before acquiring a product and Place, as the term states it means the physical location where a product can be purchased. Promotion involves publicizing a product and is used to raise awareness of a commodity in the market, and development also determines where an item will be segmented and positioned.
H&M acquires people and then incorporate them as part of the marketing mix. People generally take a role in the success of a product or a service or even tarnish the products image; performance deals with the goals that an organization is facing, for example, financial goals whereby it tells whether the objectives are realistic or not. Process refers to how a service is offered — for instance, after-sale services and processing of orders.
The Hennes and Mauritz have several communication channels in which they convey their messages to their customers and various social media platforms, which helps them get closer to their market, e.g., Facebook, Twitter, and YouTube. As such, H&M has a loyalty program which rewards repeat customers with opportunities to earn points after every dollar spent and participate in membership events; for example, H&M offers a discount on their customers birthday. The loyalty program is currently working in 17 markets in the U.S.
H&M uses guerilla marketing strategy, which focuses on the low cost that hence yields maximum outcome. For example, publicity stunts and by using live streams of fashion events where they can market their clothing line. For example, a dance-off between Jenner and Jordan Dunn. H&M uses a narrative approach which makes information create memories to the audience to market their products; for example, H&M can tell about the difficulties they faced while coming up to the business world.
Part 4 Conclusions
In conclusion, H&M invests in Omnichannel strategy, which is a multichannel sales approach that offers customers homogenous shopping experience. The Hennes and Mauritz spend more than 20 million dollars to create an outstanding end-end clients journey across all their channels. H&M is looking into customer shopping habits, which will help in ensuring that the brand meets consumer expectation. However, Omnichannel strategy faces a risk of complexity if their products do not meet customer requirements. H&M can solve this problem by ensuring that they give the correct description of products to avoid customer conflict. Moreover, the omnichannel strategy puts customers at the center of view since they frequently change channels, and thus, H&M uses those channels to meet customer needs. Omnichannel takes into account information obtained from customers during their interaction, which might not be available to other channels and thus convey the information to other avenues for the benefit of customers.