In recent years, with the rise of new era consumer values and the continuous evolution of consumer trends, the once popular fast fashion industry has been seen as cheap and wasteful. symbol. The performance of major fast fashion brands in recent years can be described as “suffering”. Bankruptcy, closure, store closing… these words frequently appear in news related to fast fashion brands.
As a leading fast fashion brand, H&M is also facing an existential crisis. H&M has been suffering from a continuous decline in profits since 2017. In the first quarter of 2018, profits even dropped by 62%. This also forced H&M to make changes in its marketing strategy. Relevant plans have been launched one after another since 2018, and comprehensive adjustments have been made from the inside out, from open innovation to brand development.
After a year of hard work, it was finally handed over successfully I got a pretty good report card. In the third quarter of 2019, H&M reversed eight consecutive quarters of declining performance and achieved growth, with physical retail and online sales rising simultaneously. In January 2020, H&M announced its annual report for fiscal year 2019, which showed that H&M Group’s total sales in fiscal year 2019 were 232.8 billion Swedish kronor, a year-on-year increase of 11%, of which the group’s online channel revenue increased by as much as 24%; sales in China increased by 12% year-on-year. %, ranking among H&M’s top five markets in the world. In addition, H&M plans to add 175 offline retail stores around the world.
The outside world is not only curious. In the unfavorable situation where fast fashion giants such as Forever 21 have fallen one after another, how did H&M reverse the decline and turn the corner? We will tell you today Let’s take a look at H&M’s three major innovation strategies in the marketing field.
Strategy 1: Embrace innovative technology and optimize customer consumption experience
Although technology has developed rapidly in recent years, the fast fashion industry seems to be a technological “insulator” ”, and did not actively embrace new technologies. The same is true for H&M. Although it has its own official website and app, it does not use technology to improve customer consumption experience. It was not until 2018 that H&M introduced a number of technological innovations to actively improve consumers’ offline and online retail experience –
In 2019, H&M opened a new Internet platform Itsapark to the public In the beta version, fashion and outfit questions initiated by users on this platform will be sent to 3 people to answer. These respondents include fashion industry insiders, Internet celebrities, fashion brand staff, etc., and the format is not limited to Text, videos, pictures, etc.
The H&M New York Times Square flagship store has introduced a voice-activated smart interactive mirror authorized by Microsoft, which can provide clothing style and outfit suggestions based on consumer needs; H&M Home Using the intelligent voice-assisted App and AR technology developed by Google, an App called H&M Home Stylist has been launched, which can give consumers suggestions for purchasing home furnishings.
In terms of consumer search experience, H&M has added visual search and scanning search. Have you ever had such an experience? When you are walking on the street and see a beautiful woman passing you wearing a beautiful skirt, you also want to buy the same style, but it seems a bit rash to ask, and you feel very unwilling to miss it. . “Visual Search” can solve this problem. When you see a nice piece of clothing on the street, you can take a photo with your phone and search whether H&M has similar styles. This has also increased consumers’ online ordering rate to a certain extent. Scanning search is mainly used in offline retail stores. Consumers can scan product labels with their mobile phones to learn more about product information or similar product recommendations.
Strategy 2: Emphasize the concept of environmentally friendly clothing and enrich the brand portfolio
H&M’s main brand has the “Conscious Collection” series. This series will launch new clothing based on environmental protection concepts every spring and autumn. In recent years, H&M has found through surveys that most consumers no longer prefer to buy low-priced, fast-ebbing fashionable clothing, especially millennials. They generally have a high awareness of environmental protection, and most tend to buy clothing with good quality, unique design, and durability. However, the consumption concept of fast fashion that emphasizes trends, pursues cheapness, and has medium quality is no longer recognized by them. Under this circumstance, H&M has strengthened the brand concept of “environmental protection” and increased its investment in the “Environmental Protection Conscious Action” series to cope with the market status quo of changing consumer values.
In addition, H&M is also actively operating its sub-brands to attract different consumer groups. For example, in April 2018, H&M launched a new sub-line brand Nyden, which was established by imagining the behavior of consumers buying clothing in the future, coupled with market research and social surveys. This young brand that combines street elements is targeting the millennial consumer group. The Nyden brand no longer has one main designer guiding the brand style. Instead, brand creative director Oscar Olsson invites different celebrities or KOLs to launch joint styles every season. The style changes greatly every season. This also satisfies the psychological needs of young consumer groups for innovation and change. Moreover, Nyden no longer follows the main brand’s weekly update frequency, but uses an irregular launch mode to increase the brand’s topicality.
COS, another mid-to-high-end brand aiming at design, is also another attempt by H&M to cope with the changing consumer trends. H&M created COS mainly to meet the needs of consumers who want to wear clothes with a sense of design and texture at an affordable price. The target group is positioned at mid-to-high-end urban white-collar workers. As the sales performance of its main brand has suffered setbacks in recent years, H&M has increased its support for COS and formulated an expansion plan for the Chinese market, from entering the e-commerce platform to opening a new flagship store in Shanghai Jing’an Kerry Center; It cooperates with Chinese clothing rental brands to launch services such as “rental clothes”. This attempt is also successful so far. Even though COS has 95% fewer physical stores than the main brand H&M, the profit it contributes is no less than that of H&M, and it has maintained steady growth.
Strategy 3: Introduce data analysis technology to innovate corporate digital platforms
In order to further understand consumer preferences, H&M has decided to introduce data analysis since 2019 Technology, by analyzing in-store sales categories, membership information, return categories, network traffic and other data, H&M can understand the most popular product categories offline and online, and then arrange incoming and outgoing goods based on the results to stimulate sales. This operating model is different from the logic in the past where designers and merchants’ suggestions were used as the basis for product design decisions.
For example, the results of data analysis tests conducted by H&M at its branch in Östermalm, a high-end residential area in Sweden, showed that store employees originally thought that local consumers liked basic and relatively plain clothes. However, through data analysis technology and analysis and interpretation of sales and return data, it was found that most local consumers are women and prefer trendy items and household products at mid-to-high-end prices. After that, H&M made adjustments to the merchandise displayed in the store, removing 40% of the men’s clothing products in the store and adding more trendy items, household products, etc. The effect of marketing adjustments was quickly reflected in the store’s sales performance, with adjusted quarterly sales doubling compared with the previous quarter.
H&M’s digital innovation is not only used on the consumer side, but also on the employee side. Employees in H&M offline retail stores have high mobility needs, so there is no fixed office equipment to handle daily work. Therefore, at the end of 2018, H&M began to build a digital office platform, allowing employees to communicate with team members in real time through digital mobile devices, and to process work through this system. In this way, employees do not need to switch between various apps, which not only improves work efficiency, but also allows employees to focus more on sales and services.
H&M, founded in 1947, can be said to be the originator of the global fast fashion industry. However, since it reached a rapid growth of 36% in 2014, it has maintained its growth rate for many years. Slight growth, and since 2017, it has been stuck in a vicious cycle of declining sales performance and has been unable to get out. However, amidst the negative voices in the fast fashion industry, H&M has saved its precarious sales performance by relying on marketing transformation. To take stock of H&M’s marketing innovation, we can summarize it in 12 words, which is “embrace innovative technology and focus on consumer experience.” This is also the marketing “breakthrough” found by H&M. But in the final analysis, H&M’s turnaround is due to the brand’s continued attention to consumers and the consumer market and its in-depth cultivation. It is enough to show that the famous saying “the customer is God”, which is regarded as a guideline in the sales industry, is applicable in any era!
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