Brand Audit for H and M Fashion and Qual PDF

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h&m brand audit...

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Fashion and Quality at the Best Price. Carina Tamer & Steffen Bagger

Professor Newman

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Introduction ● Brand audit objectives, scope, and approach ○ Objective: To analyze the health of the brand H&M with the particular objective of evaluating how H&M’s “Everything for Everyone” approach affects their brand image and brand value. Finally, the objective is to offer recommendations to increase long-term brand equity. ○ Scope: US Market ■ Currently 360 stores in 40 states and online shopping at hm.com/us. ■ H&M stores are located both in suburban shopping malls in rural states and huge boutiques in large cities like New York City. ○ Approach: ■ Gather necessary background information about the brand, the competitors, and analyze consumers (their perceptions and why they turn to H&M). ■ Explore in detail the firm’s perspective on their brand (Brand Inventory). ■ Explore in detail the consumer’s perspective on the brand (Brand Exploratory). ■ Gather primary data via a survey distributed to the target market in order to gain more accurate information on brand image. ■ Provide recommendations in order to strengthen brand image and increase brand equity and value. ●

Background about the brand ○ Inspiration ■ 1946- Swedish founder Erling Persson travelled to the United States and observed and visited many local stores and realized he too wanted to offer fashionable clothes at reasonable prices. ○ Start up ■ 1947- Persson decided to open a women’s clothing store in his hometown of Västerås, Sweden. ● Since he offered clothing exclusively ‘for her’ he decided to name the store ‘Hennes,’ literally translating into “Her’s” in Swedish. ■ 1952- After initial and local success, he decided to open up a second store in Stockholm, the capital and largest city of Sweden. ■ 1964- Opened up first international store in Norway. ○ Acquisition and Name change ■ 1968- Persson acquired men’s fishing/hunting company ‘Mauritz Widforss.’ ● Decided to combine the two companies into one store that would offer clothing and other products for both men and women. ● Led to change in name to Hennes & Mauritz, which was then ultimately abbreviated to H&M, which is still the current name of the well-known brand today. ○ Additional Growth, Expansion, and Recognition ■ 1977- H&M decided to narrow their focus on teenagers, young men and women. ● Since they knew teenagers/young women are very interested in their appearance and cosmetics, decided to introduce an ‘H&M Cosmetics’ line. ■ 1998- H&M launches its first website with the web address hm.com. ■ 2000- H&M opens up first store in the United States, on Fifth Avenue in NYC. ■ 2008- H&M is ranked Europe’s strongest brand in The Financial Times.

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2009- H&M launches their “H&M Home” collection in addition to already offering wide collection of clothing, shoes, jewelry, and cosmetics. 2014- Now H&M manages six different brands including: H&M, COS, Monki, Cheap Monday, Weekday, and Other Stories.

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Background about the industry (focus on United States apparel industry) ○ Close competitors in the United States apparel industry ■ Forever 21- American retailer1 ● 1984- Opened up first store in Los Angeles, California. ○ Now has 478 stores throughout United States. ● Also known for its “trendy offerings at economical prices.” ● Offers Men’s, Women’s, and Girls clothing in addition to accessories, cosmetics, and shoes. ■ Zara- Spanish retailer2 ● 1989- Opened up first store in United States. ○ Now has 51 stores throughout United States. ● Offers Men’s, Women’s, and Kids clothing in addition to accessories, cosmetics, and shoes. ● Known for ‘fast fashion’ and low cost products. Sometimes known as “fashion imitator” for only offering a certain number of products/styles for short/ limited times. ■ TopShop- British retailer.3 ● 2009- Opened up first store in United States. ○ Currently only has 7 stores in the United States. ○ However, sells their products in 52 different Nordstrom stores and manages their primary US sales and operations through online website. ● Focuses on presenting “cat-walk designs at budget prices.” ● Offers Men’s and Women’s clothing, accessories, and cosmetics, and shoes. ■ Uniqlo- Japanese retailer4 ● 2005- Opened up first store in United States. ○ Currently has 37 stores in United States. ● Focuses on offering ‘Unique clothing’ which is where the name is derived from. Places emphasis on timing- fast, trendy, and always updating. ● Offers Men’s and Women’s clothing. ■ Other competitors include GAP, Urban Outfitters, ASOS, United Colors of Benetton, etc.

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Consumer analysis (trends, motivation, perceptions, needs, segmentation, behavior) in the United States market ○ Trends ■ Mostly young adults, primarily teenage girls and young women who shop at H&M. ○ Motivation

http://www.forever21.com/Company/history.aspx?br=f21 http://www.inditex.com/our_group/our_history 3 http://us.topshop.com/en/tsus/category/about-us-70257/home 4 http://www.uniqlo.com/us/company/about-uniqlo.html 2

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Convenient/Readily Available- Since they have a large amount of locations in 40 states, stores are easily accessible and consumers are motivated to shop at H&M because it is convenient for them. ■ Affordable- Young consumers are on a strict budget and are motivated to shop at H&M because they can afford it. ■ Trendy- Consumers are motivated to shop at H&M because they know they constantly update their products and always carry the latest global fashion trends. Perceptions ■ Consumers perceive the brand as trendy, cheap, fun, mainstream, young, and global. Needs ■ Fashion forward- H&M allows consumers to be able to access clothing that is reliable and accurately representative of the latest trends. ■ Expansion of Wardrobe- H&M allows consumers who need to expand their wardrobe by providing them with all of their different product lines and for reasonable prices. ■ Professional for low price- H&M offers affordable ‘professional or work clothes’ that young consumers need and can afford when they just enter the workforce. ■ All in one place- H&M satisfies consumers needs for having to shop for multiple people, multiple occasions, or for a complete outfit and can easily find it all in one place. Segmentation- Currently attempting to target everyone ■ Young men approx. ages 15-30- They target young men on a budget who are both trendy and basic/classic. They have different offerings for both types. ■ Young women approx. ages 15-30- They target young women on a budget who are trying to find their style. They have many different offerings, which are constantly updating and inexpensive which gives consumers ability to change their mind/style and not have to change where they shop. ■ Parents shopping for their children- H&M provides an ideal product for parents who want a quality purchase for their child that is cheap enough to justify their child growing out of it or general child wear and tear. ■ Upscale or Expensive taste consumers- H&M can connect with more designer conscious consumers through different designer collaborations. Behavior ■ Fashion shopping: Consumers purposely plan to shop at H&M because they know they have a wide selection of trendy options that they are bound to find something and get a good deal. ■ Impulse purchases: H&M’s inexpensive prices and many store locations leads to a high frequency of impulse purchases per shopper. While consumers may go into a store with an idea of what they want to purchase, H&M’s store layout and cheap, “latest fashion” options promotes such impulse purchases. ■

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Brand inventory: Firm Perspective ● Brand portfolio analysis ○ The H&M group consists of six independent brands: H&M, COS, Monki, Weekday, Cheap Monday and & Other Stories. However our focus is only on the H&M brand. ○ The H&M brand is mainly divided into four different categories: n Men: Clothing, sportswear, underwear, accessories, and shoes are offered

4 n Women: Clothing, sportswear, sleepwear, lingerie, swimwear, maternity wear, cosmetics, accessories, and shoes are offered. n Kids: This category extends from newborns up to 14 year olds. ● This category includes extends from babywear to regular clothing for kids. ● Additionally, they also offer sportswear, swimwear, shoes, and accessories just like in the adult categories. n H&M Home: This line offers home decor such as pillows, blankets, curtains, storage, decorations, and rugs. ● The bedroom line offers sheets, pillowcases, bed skirts, robes, duvet covers, etc. ● The kitchen line offers towels, placemats, aprons, and decorations. ● The bathroom line offers bathmats, towels, robes, storage, and decorations. ● Finally, the company has an outdoor line, which offers seat cushions and picnic sets. ● Branding strategies (extensions, sub-brands, etc.) ○ Sub-brands for both their men & women lines: n Divided: Focused on their teen segment n L.O.G.G.: Label of Graded Goods n &Denim: Denim products (pants, skirts, jackets) n Trend: Most fashion forward & up-scale line n Conscious: Sustainable Style – Newest fashion line, which follows H&M’s initiative to become more sustainable. “We believe in a better fashion future – one where fashion both looks good and does good.” ○ Sub brands for women include: n H&M+: Plus sizes for women n Mama: Maternity clothing line ●

Elements ○ Brand Name & Logo: n The brand name and logo has changed from Hennes (see figure 1) to H&M (see figure 2). n The red color of the H&M logo symbolizes passion, energy, joy and youthfulness. n Furthermore, the abbreviation of the name Hennes & Mauritz to H&M makes it easier to recall, write, and pronounce across countries. n Additionally, it has great memorability as it has high awareness and is globally recognized. n The H&M logo and name is legally owned and protected. ○ Slogan: Their main slogan is “Fashion and quality at the best price” n This differentiates H&M from its competitors based on providing fashion at a discounted price. n However, this slogan is not emphasized in their ad campaigns or window displays. It is mainly emphasized on their website. ○ Packaging n H&M’s packaging includes the simple plastic white bags. These are used consistently throughout all of their locations and reflect the simplicity and cost effectiveness of the brand (see figure 3).

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Current marketing programs o Style Icon Collaborations: Madonna, Kylie Minogue, David Beckham, Beyoncé, etc. o Collaborations with Brands n Maison Martin Margiela with H&M (filmed by British artist Sam Taylor-Wood). n The collaboration with Maison Martin Margiela is a series of re-editions of iconic Maison Martin Margiela garments and accessories for men and women. Each piece is labeled with a tag indicating the season from which it originated, dating back to the first collection in 1989. o Collaboration with Alexander Wang n Includes gloves (boxing and otherwise), beanies, and duffels in the mix—all replete with standout WANG branding.5 n Creating the Buzz: In April at Coachella, H&M announced collaboration with Alexander Wang for upcoming line. The full Alexander Wang X H&M collection was unveiled at a celebrity packed runway show on November 4, 2014 in New York City. Magazines such as Glamour Magazine, Vogue, and NY Magazine have already done covers of the upcoming line. o Other Collaborations n H&M X Jeff Koons Collaboration Party for Flagship Opening on Fifth Ave in NYC • Posters that read “Artified by Jeff Koons” Done at the same time as very-popular Whitney exhibit for Jeff Koons: A Retrospective. Attempting to combine art and fashion n Lady Gaga Art Pop Album Release: Lady Gaga’s album was released at opening of H&M store in Times Square, combining fashion and music. o Benefits: n Associations with high-end models and luxury brands helps promulgate image of ‘cool’ ‘popular’, ‘quality’, and ‘high fashion.’ n Associations with up-coming and trendy artists, musicians, actors, and film directors creates buzz for H&M as a ‘cool and trendy’ brand. n Shows H&M is willing to push boundaries and set a platform for creativity. o Threats: n Going up-scale and changing target-market. • Prices are high, not in line with H&M’s distinctive strength of low-cost. • E.g. Alexander Wang jackets and trousers going for $280.00. Sports-bra for $47.00. n Kohler’s value proposition may become diluted. • More for more. (contrasting to their original value proposition of more for less). n Over-saturating the market. • Using publicity to the extreme (could look desperate). • Trying to combine image with high-fashion, music, art, and theatre could potentially dilute brand image. • Trying to be ‘cool’ in every aspect of cultural life. • Karl Lagerfield pointed out this controversy: “Snobbery created by anti-snobbery.”6 As a brand that emphasizes inclusivity and accessibility, partnering with such exclusive brands has the risk of conflicting with brand culture.

http://www.vogue.com/3000375/alexander-wang-hm-collaboration/ http://www.vogue.co.uk/news/2004/11/18/lagerfelds-high-street-split

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Brand Communication Exercise (Alexander Wang X H&M ad, 2014). n Current ad: video-game inspired video featuring world-top models Raquel Zimmermann, Natasha Poly, Isabeli Fontana, Joan Smalls, and footballer Andy Carroll. Actors are shown in fantastical highperformance activities from boxing into lockers, motorcycling through buildings, skate boarding in the snow, and flipping through the air. As the characters run and jump through various extreme environments, they are wearing the stylish line for Alexander Wang. (see figure 4 and 5). n What are they trying to achieve? • We can be the coolest, most luxurious brand of the time—just like Alexander Wang. n Is it the right thing? • Not ideally. This idea can help the H&M brand develop along the idea of trendy, fashionable, and quality however; it does not seem to be executed right now due to the exclusive associations of the designer brands. n Have they chosen a good advertising idea to express it? • Not particularly. Active and performance wear don’t have much to do with H&M’s current lines of clothing. Although the video is cool and will attract attention, it will not do much for the brand image other than excite consumers about Alexander Wang and perhaps even confuse the inexpensive style associations that the brand has been trying to build. n Have they chosen a good media vehicle to convey it? • This seems to be an efficient means of connecting with a large group of consumers. By posting this video online, the company has made it easily accessible. The inclusion of numerous celebrities promotes sharing on social media. n How well have they executed? • The video itself is extremely well executed—with some of the most notorious models in the world right now. However, without a great idea, execution does not mean a lot. Other marketing programs: n Billboards and Public Displays n H&M is currently the most prominent logo in the New York skyline. On top of the Conde Nast Building, it is the most spotted logo in New York (can be perfectly spotted from the top of the Empire State Building) (see Figure 6). n Posters and ads can be seen all around New York City. • Most prominent ad features a high top model wearing a piece of H&M clothing. Next to the model is small text indicating the price of the garment or accessory (see Figure 7 and 8).

Brand Exploratory: Consumer Perspective • Brand positioning (see Figure 9) o Points-of-parity n Low-Cost apparel and accessories that are trendy and fashion-forward. Value for money. n Young, trendy, vibrant. n Global presence o Points-of-difference n Still trendy and “cool” but for a price everyone can afford. Non-discriminating. New fashion for less. o What features a product/service should offer?

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n Unique, fashion forward clothes that go beyond style-staples. At what price? n Lowest-price possible/ in accordance with production cost. Through what channel? n Large stores with massive supplies and options (accessibility). What message should be communicated? n Keep your style updated, dress the way you want at the time you want and at the cost you want. Brand positioning statement: n For young adults in the market for trendy clothes, H&M delivers the most affordable fashion wear because of a unique combo of low-cost and trendiest-style. Brand Key n The Insight • Clothes make consumers look fashionable, confident, and cool at an affordable price. n The Target: • Women, men, and children who want to maintain a unique cosmopolitan style but don’t want to spend too much; who want to look and feel their best, and who are feeling the burden of spending too much on clothes. n Competitive Market • H&M clothes combines high fashion and affordability. Most young adults don’t want to spend that much money on clothes. H&M exists in a very saturated market. n The Benefits • Won’t make me feel guilty for buying garments that are ahead of the curve. • Makes the consumer feel au courant and modish. • Helps make the consumer feel more confident and daring. n The Reasons to Believe • Contains lowest market price • Worn by A-list celebrities (Kendall Jenner, Beyoncé, Miley Cyrus). • Recommended by fashion-magazines (Allure, GQ, Elle, Nylon). n The Values and Personality • Outer confidence, fun, bold, hip, not-afraid of expressing oneself. n The Discriminator • H&M won’t make me feel like I’m making a bad investment on my appearance, because the clothes are still cool and cheap. n The Essence • Style and Uniqueness for every day and any occasion without regret. n Kotler’s Value Positioning Possibilities • Goal: More for Less • Later will discuss how H&M is perceived as Same for Less n Horizontal Differentiation • Some H&M consumers are purely attracted by affordability factor, whereas others are attracted to the combination of affordability and trendiness. o This plays a huge role in H&M target segmentation. Dilemma occurs with how to satisfy both and not lose customers who just are looking for style-staples.

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• Brand associations and values o As the H&M website states, the company is guided by a strong and clear set of values. These values define the brand to the public and develop the brand’s associations. The values can be seen in Figure 10. These values focus on the following trends. n A focus on people and teamwork: H&M believes in inspiring their people and focusing on their company and customers as one team. This idea in individual inspiration is reflected in the uniqueness and individuality of their products. H&M strives to be associated with what is trendy and fashionable. By inspiring individuals and working in a collaborative team, the company fosters a community of individuality reflected in their products and the consumers’ use of their products. n Simplicity: While unique, H&M’s offerings are simple which is reflected throughout their branding. Simplicity is seen in many of the brand elements- from the basic white bags, the sleek, white stores, and even the simple logo with just the letters “H” and “M.” H&M has proven to be consistent in their focus on the idea of being simple keeping their bags, stores, and logo the same over time and consistent across markets. Their ads also highlight this simplicity with a model showing the product and the price and basic product description (i.e. dress jacket) clearly labeled next to it. n Improvement: H&M capitalizes on this simplicity to stay open-minded, and embrace their entrepreneurial spirit to seek improvement. H&M has identified some of their weaknesses- while being inexpensive and fashionable, they have developed an association with unsustainable disposable fast fashion, meaning that consumers will wear their clothes for a season and then discard of them. To fight this, H&M has invested in some innovative social campaigns. o Campaigns n H&M has initiated a garment collecting program campaign to “not let fashion go to waste 7” The goal of this is to limit waste, focus on responsibility, an...