Spend some time in many of the world’s major cities, and it won’t be along until you stumble across an H&M outlet. Thanks to its canny international expansion strategy, the Swedish fast-fashion brand has grown to become one of the world’s largest clothing retailers. H&M’s steady march towards global domination has been shaped by its efficient and flexible marketing approach. From savvy production models to forward-thinking advertising and partnerships, H&M is a dominant force at the intersection of fashion, quality and price.
H&M making their customers buy…less?
Fashion retailers have been known for playing hardball from time to time. Spanish label Zara is arguably H&M’s chief competitor, and the two frequently find themselves at each other’s throats for top position. In India, H&M clawed its way to victory by beating Zara in the pricing game. Unable to match H&M’s prices, Zara could only watch as H&M doubled its sales over a nine-month period.
Despite this success, it’s not always about a race to the bottom. H&M has begun to pivot from low-cost fast fashion, rebranding itself instead as a leader in sustainability. The company’s new “circular” approach steers customers towards eco-friendly shopping habits, with a focus on clothing that’s either recyclable, more durable, or both. No longer dedicated solely to low prices, H&M is less afraid to charge more per item, while urging shoppers to buy fewer items overall.
It’s not all about the price anymore. Sustainability matters.
In some markets, customers are driven to find the best bargain, no matter what it takes. As sustainability and ethical consumption become more crucial each day, however, consider incorporating these ideas into your business model. In general, it’s best to lead by example rather than struggle to catch up from behind.
How important the environment protection is in different cultures?
According to Hofstede, you can guess how important environment protection is for a country judging by its degree of masculinity. Countries that are more feminine, such as Denmark, Sweden or Iceland, tend to care much more about the environment that those with high degree of masculinity, such as Russia. Masculinity is one of the 6 dimensions defined by Hofstede, amongst which you can also find uncertainty avoidance or power distance.
Keep your stores close, and your production centers closer.
H&M’s value proposition to its customers can be boiled down to the following: on-trend clothes at affordable prices. The retailer offers a full range of clothing staples in addition to outerwear, swimwear, footwear, undergarments, accessories and more. In order to live up to its promise, H&M was obligated to create a supply chain that enabled it to react in a timely fashion to changing trends while also ensuring reliable quality at manageable prices.
The solution was found in outsourcing. By cooperating with experienced manufacturers in developing economies for its basic items, H&M minimized its overhead while still enjoying an acceptable level of quality. Higher-end pieces, as well as those demanding quicker lead times of as few as 20 days, are made in Turkey and across Europe.
In both cases, strategically located production offices allow H&M to keep in close contact with its manufacturing partners. With store inventory replenished daily, H&M can adjust in-store offerings on a per-location basis in response to sales data.
When offshoring, play to the strengths of your partners.
H&M’s offshoring strategy is precisely optimized to maximize efficiency and flexibility. Outsourcing basic items to partners Asia keeps costs down, while other items are made closer to home for quicker turnaround. Identify your priorities, then align yourself with partners whose strengths best serve your goals.
What do designers Alexander Wang, Karl Lagerfeld and Jeremy Scott have in common?
One of H&M’s best-loved initiatives is its ongoing series of collaborations not only with with celebrity influencers, but also haute couture designers. In 2004, H&M partnered with legendary designer Karl Lagerfeld for a capsule collection which sold out within minutes, setting a strong precedent for future match-ups. These much-hyped partnerships are a win for all parties involved: H&M positions itself as a gateway to runway fashion icons, who in turn are eager to expose their brands to the company’s vast audience.
Meanwhile, everyday shoppers enjoy high-end aesthetics at a much friendlier price point than usual—though due to the frenzy that inevitably surrounds these matchups, it’s not unusual to see the items popping up on resale outlets mere hours after selling out in stores.
In addition to its ongoing series of designer collaborations, H&M also partners with key celebrity influencers to reinforce its relevance amongst pop-culture consumers. David Beckham, Madonna, The Weeknd and many others have all released their own capsule collections with H&M. Other brands have taken notice of these runaway successes, with Uniqlo and Topshop both following H&M’s example with celebrity partnerships of their own.
Anyone can throw a fistful of cash at a celebrity. Let them be creative!
H&M has no shortage of eager creative partners due to the irresistible value the company offers. In this case, H&M provides a platform for creative freedom, while its partners bring styles typically off-limits to its customer base. Research your industry to gain similar insights into how you can team up partners relevant to your brand. Anyone can throw a fistful of cash at a celebrity, and that’s precisely why you should strive to do better.
No matter the gender or ethnicity, everyone shops at H&M.
H&M has garnered much acclaim for the inclusivity of its advertising, as its campaigns regularly showcase a vast spectrum of ethnicities, ages, religious affiliations, body types, gender expressions and more. “Close the Loop,” one of the company’s most notable campaigns, inspired customers to think “circular” by repurposing their clothing in non-traditional ways. The short film featured a diverse cast of models, all while narrated by punk icon Iggy Pop. Sister brand & Other Stories released a transgender-focused campaign in 2015, while H&M’s autumn campaign the following year celebrated a stunning range of women.
Despite these forward-thinking successes, H&M has also had its fair share of misfires. Earlier this year, the retailer came under fire for a now-infamous photo of a young black boy wearing a hoodie emblazoned with the caption “coolest monkey in the jungle.” The reaction was swift, costing the brand the support of big-name endorser The Weekend, with whom H&M had enjoyed a successful collaboration since 2016. More recently, H&M suffered backlash for a series of nursing bra images which, according to advertising advocacy group Annonsrådet, failed to appropriately represent the bodies of new mothers.
Know who your customers are and catch ’em all.
When people see themselves represented in your communications, they’ll be more likely to consider your brand as an option for them. The more inclusive you can be, the wider a net you’ll cast. At the same time, be aware that breaking certain cultural rules in your target market can have disastrous consequences. Always consult with local experts to ensure your messages won’t cause any unintentional offense.
Stop looking for a simple shortcut to international success.
If there’s one thing to be learned from H&M’s example, it’s this: successfully running an international brand requires careful calibration of many complex parts. Your cutting-edge marketing won’t mean much if your stores aren’t stocking the right items in the right quantities, and at the right prices. Conversely, you’ll have a hard time filling those stores with eager shoppers without exciting marketing campaigns and strategies.
Even H&M doesn’t get it right every time. Lately, they’ve been faltering in the face of rising competition from Zara as well as newer online upstarts such as ASOS and Boohoo. While Zara has successfully leveraged its brick-and-mortar operations to compete with newer online options, H&M has struggled to catch up. Though the company has pledged to expand online operations, it remains to be seen whether or not it’s too late.
With so much to consider, it’s never a bad idea to bring in some outside expertise. If you’re looking to take your brand to the next level, let us know!