H&M Catalogue X Layar Augmented Reality

CATALOGUE X

LAYAR AUGMENTED REALITY FASM 415 Non-Traditional Retailing . Professor Meeta Roy Sonali Nandwani Mayani . Christina Ripley . Taylor Ruparel

TABLE OF CONTENTS Executive Summary / 4 Creative Brief / 6

Overview of Retailer Current Positioning in the Market Current Placement Current Communication and Promotional Activities Business Issues & Objectives Creative Guidelines List of Deliverables

Market Analysis / 24

Market Overview Target Market Porter’s 5 Forces

The New Strategic Initiative / 32

Technology & Implementation Operational Execution Plan

Communication and Promotional Plan / 34

12 Month Operational Plan Deliverables

Financial Plan / 40 2

Conclusion / 42

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EXECUTIVE SUMMARY

With the combination of the return of the print catalogue and new technologies used in consumer outreach, our initiative for H&M aims to combine augmented reality within the retailer’s catalogue. By combining interactive technology within print collateral, the impact of the collateral is higher than it is without. H&M’s catalogue will be integrated with curated content, which is then opened on the readers smartphone by scanning the page; allowing the catalogue to stand out among all the other catalogues being produced today. The interactive feature will enable the consumer to engage with the catalogue for a longer amount of time versus a traditional catalogue.

We aim to launch this technology first within the holiday catalogue, in order to achieve the biggest impact among readers/consumers. In order to determine our success we will look at if there is: an increase of direct mailing addresses via H&M’s website, increased customer interaction with in the catalogue - if it’s being talked about on social media - and an increase of sales through all channels. Each of these factors will indicate success for the initiative.

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HISTORY

Mission:

“We believe in a better fashion future one that makes fair & sustainable fashion affordable & desirable for all.”(“About”)

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H&M began in 1947, when Erling Persson opened a Women’s clothing store called Hennes, in Västerås, Sweden. The brand continued to grow and expand, and in 1968, Persson bought a hunting and fishing equipment store called Mauritz, the brand then became Hennes & Mauritz. Today the brand is recognized as H&M, a leading global fashion company, thriving off of their business concept to “provide fashion and quality at the best price”. H&M offers a variety of fashion throughout their independent brands, including their Conscious Collection, allowing them to strive towards creating a better future - one that is fashionable and sustainable.(H&M.com).

TIME LINE 1947 Hennes first store opened in Vasterias, Sweden selling women’s clothes.

1968 The founder, Erling Persson buys Mauritz Widfross, a hunting and fishing equipment

store, sales of men’s and children’s clothing begins. The name is changed to Hennes &

Muaritz.

19090’s Continued opening stores in Europe. Newspaper and Magazine articles are

complemented by outdoor advertisements featuring famous models.

1998 H&M Online shopping begins.

2000 The first US store opens on Fifth Avenue in New York. Stores also open in Spain, and

the brand continues to grow in the European market.

2004 Initiate designer collaborations starting with Karl Lagerfeld. More collaborations

follow with designers including: Stella McCartney, Comme des Garcons, Jimmy Choo,

Lanvin, Marni, Mason Martin Margiela, Isabel Marant, and Alexander Wang.

2006 Major expansion of online and catalogue sales being with the Netherlands. The first

middle east stores open via franchise 2007 Concept store COS is launched 2008 H&M aquires fashion firm FaBric Scandanavian AB, which comprises the brands

Weekday, Monki, and Cheap Monday.

2009 H&M Home is launched (H&M.com) 7

CURRENT OWNERSHIP STRUCTURE H&M is is a Swedish Public Limited Company - meaning the company offers shares to the general public and has limited liability. The company still remains in the family today, with the founder’s son, Steffan Persson as the Chairman of the board and the majority stockholder in the company. Steffan’s son, Karl-Johan Persson currently presides over the company as President and CEO. Steffan’s sister, Lottie Tham, and her husband are the second largest share holders in the company, and serve on the Company’s Election Board (“Investor Relations”).

Top 10 Shareholders:

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REVENUE

H&M operates 3,500 stores worldwide in 57 markets.

(Annual Report, 10) H&M’s Revenue worldwide is 151,419.0 SEK = 17.6 Billion US Dollars (One Source)

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FUTURE GROWTH PLANS Since the beginning H&M has been focused on growing and expanding, while remaining true to it’s mission of offering quality and affordable fashion. H&M believes in “growing with sustainability, quality, and high profitability” (“Expansion”). They have a growth target planned to increase the number of stores by 10 to 15 percent per year (“Expansion”). For 2015 they will continue their expansion by opening 400 stores, mostly in China and the US, and will open 9 new Online markets in places such as Taiwan, Peru, Macau, and India (Annual Report, 11).

Sustainability is key in H&M’s plans for expansion. Not only are they planning to expand into new markets by opening new stores, they also want to expand their sustainable initiatives. They want to continue to reduce green house gas emissions, while only using renewable energy sources (Annual Reort, 40-41). They also want to grow their use of sustainable materials, it is their goal that by 2020 all cotton used will be organic cotton, since it is the most common raw material they use.

They are currently working towards implementing long term sustainable initiatives into their stores, such as, “recycling waste, changing to more energy and water efficient systems, and selecting more environmentally responsible materials, such as certified wood, or recycled materials” (Expansion).

They are currently working with companies to create an industry standard in the labeling of products, showing customers the environmental and social impact of a garment, ( Annual Report, 11).

H&M is also looking to expand their product offering. They plan to launch H&M Beauty in the fall of 2015, which will offer: make-up, body care, and hair care products while offering high quality-value for the cost. They plan to launch this concept worldwide into 900 stores, and 40 new markets, as well as Online markets. Along with launching H&M Beauty they are also looking to expand their Home line into 10 new markets. (Annual Report, 11)

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SWOT ANALYSIS Strengths

- Flexibility in Evolving Retail Landscape

(Annual Report, 47) - Strong Global Position - Transparency and Sustainability (Annual

Report, 9) - Multi-Brand Portfolio (Annual Report, 17) - Strong Shared Values of Group (Annual

Report, 45) - Steady Global Expansion - Designer Collaborations (Alexander Wang, Versace)

(Annual Report, 57) - Developed catalog

Opportunities

- To make the H&M brand sustainable as a whole - Carry a larger assortment Online (Euromonitor) - Open New Brick and Mortar Stores

(Annual Report, 10) - Open New E-commerce Markets

(Annual Report, 10)

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Weaknesses

- Online store not available in all markets - Late start in creating an E-commerce

website (Euromonitor) - Does not accept Online returns in store (Euromonitor) - Difficulties with being sustainable yet

affordable (Annual Report, 36) - Slow to implement changes due to

large size of the company ( Annual Reports, 64)

Threats

- Increased Strength of US Dollar (Annual

Report, 11) - Resurgence of US Made Apparel - Rising Labor Costs in Asia (Adam and Chen) - Competition from Vertically Integrated Companies - Fashion Trends Change Quickly - Brand Perception May be Different in

New Markets (Annual Report, 64)

Based on our SWOT analysis we found that H&M’s biggest strength was their amount of corporate transparency which has helped them become a leader in creating fast fashion ethically and sustainably. H&M has opportunities to expand into new physical and Online markets; however due to the size of the company, changes are implemented slowly. H&M’s biggest external threat is the rising labor costs in Asia, which is where H&M predominantly manufactures. (Appendix A)

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CURRENT MARKET POSITION

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PERCEPTUAL MAP H&M’s biggest competition is other large, fast fashion companies such as Forever 21, Gap and Urban Outfitters. Due to our initiative of wanting to maximize the impact of H&M’s print catalog on our customers, we needed to asses our competition on their effectiveness of being a multichannel retailer and their digital customer relationship management strategies in order to create our perceptual map. We created a set of criteria to score our competition against. To assess the effectiveness of multichannel retailing, we made a list of aspects that were considered to be of high importance according to L2’s report on multichannel retailing. We scored H&M and its competition based on their number of points of sales, whether or not they produce direct mailings, and then on the effectiveness of their e-commerce site and m-commerce application.

Our competition received a score ranging from 0-3 based on number of stores and online markets and yes or no questions were answered with 1 point meaning yes, the retailer does this multichannel practice or a 0 score if they do not. The same scoring system was used to access our competition’s effectiveness of digital CRM. Specific CRM activities that were graded are the presence of a company newsletter, direct emails to customers, if the company provided coupons online and whether or not they created an RSS feed, as well as the frequency of these activities.

Based on our perceptual map, we saw that H&M and its competitors all have a similar impact on customers through their multi channel and CRM activities. With the implementation of augmented reality content in their catalogue, it gives H&M the opportunity to maintain a leadership position within integrating technology/augmented reality within their CRM (Customer Relationship Management).

(Appendix B, C,D)

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CURRENT PLACEMENT

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H&M distributes through their 3, 500 stores, located in 55 different countries, 356 of them are in the United States. H&M also distributes through their Online store, available in 13 different markets and through telephone orders. (Annual Report, 49) Out of H&M’s total revenue for 2014 of $17.6 billion, $1.6 billion of that was made within the United States. H&M directly operates within 40 markets and has 15 markets that are franchised in the Middle East and Asia.(Annual Report, 80) (Appendix A)

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COMMUNICATION & PROMOTION

H&M currently combines traditional marketing and digital marketing to promote their brand.

Annually large company spend an average of 2 to 4% of their revenue on advertising expenses (Mckee). Looking at H&M’s revenue of 17.6 billion, an estimated 3.5% of that is said to be spent on advertising expenses, making their annual spending on advertising an estimated 616 million US dollars.

H&M wants to inspire, motivate, and communicate with their consumer, by engaging with them in every way possible. H&M does this through the incorporation of transparency and sustainability in their products. They showcase these intentions throughout their promotional activities, including TV Campaigns, Social Media, Radio, Events and in Print Advertisements.

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H&M’s Print Advertisements consists of a catalogue, which is the most valuable and rich source of print advertisement, as well as print ad campaigns featuring celebrities and placed in prominent fashion magazines. For TV campaigns the main focus is on showing the product, the footage is set to catchy music to engage the consumer. H&M’s Radio channel is featured on Spotify, Facebook, and iTunes, which creates play-lists of music representing the brand, as well as announcing new collections, and store openings.

H&M is heavily involved in social media, they are represented across all platforms including: Facebook, Instagram, twitter, Google+, Pinterest, and Youtube. Across their platforms they post current advertising campaign videos and pictures launching new products, as well as designer collaboration sneak peeks, and behind the scenes videos. They also post “how to’s” for creating outfits with their current products on Instagram and Facebook. (Moth).

CRM Activities H&M engages through RSS Feeds, emails, and newsletters. H&M’s E-mail service has revised, personalized, and customized content that depends on the client’s shopping needs, expectations, likes, and previous purchases. When customers sign up for trend notifications, updated emails, and special offers from the newsletter, they receive 20% off of their purchase (H&M.com).

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BUSINESS ISSUES & OBJECTIVES

H&M creates a monthly catalog, which is sent directly to customers. The catalogue acts as a visual reminder for the customer to browse the Online shop to purchase items from the catalogue or visit a brick and mortar location - just like every other retailer’s catalogue We have created an initiative which allows the customer to interact with the catalogue and obtain product information they otherwise might not have received elsewhere.

Our main objectives for creating digital content through augmented reality for the H&M catalogue are to: -Maximize the efficiency of print collateral through an engaging user/reader experience -Educate the consumer on H&M’s ethical and sustainable practices -Maximize the viewing impact of products through e and m commerce platforms 20

Recently, there has been a resurgence of the print catalogue for retailers. Catalogues are a tangible promotional tool that increase the brand’s relationship with the customer and drives sales. “Customers who have a multi-channel relationship with the brand spend four times as much as those who do not” (Yohn). Also, it is now easier for retailers to send out catalogues to customers whom they know will be influenced the most. Online purchasing has helped retailers create a database of their own customer’s information; by viewing purchasing habits, retailers can almost ensure their catalogs are getting into the right hands In addition, now more than ever, consumers care about company transparency. “1 in 3 consumers take into account sustainability when shopping” (“Corporate Transparency: Why Honesty Is The Best Policy”). Consumers believe that honesty is the best policy, and do not want to shop at stores that are trying to hide information about their business practices. H&M is an impressively transparent company compared to their competition. H&M provides information on where, how and by whom their products are being manufactured directly on their website.

Augmented reality based media has barely entered the fashion industry. Through curated content, which is unlocked by scanning a specific trigger, shoppers have access to more product information, which helps them make better buying decisions (Sommerville).

Due the return of the catalog, more companies are once again creating print collateral to reach customers. In today’s market place, H&M’s competitors such as Forever 21, Urban Outfitters and Express distribute catalogs. Integrating augmented reality technology within H&M’s catalog will allow them to stand out in the customer’s mind as being a forward thinking and innovative company.

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MOOD OF DELIVERABLES

For this project we collaborated with a team from the FASM 311 Class :New Media Methods for Retail and Digital Spaces, to produce our deliverables. We provided them with a creative brief, outlining guidelines for our marketing campaign. Overall we wanted to maintain H&M’s aesthetic, keeping the layout and design minimal but graphic. That aesthetic will also carry over throughout our photo shoots and videos, with the styling and backdrop.

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CREATIVE GUIDELINES Color

The color used throughout the catalogue and print material will follow H&M’s aesthetic of white backdrops , and neutral colors except for the garments.

Font

H&M uses a simple Sans Serif font throughout their catalogue. A similar font would be Avenir Next.

With lighting we want to keep it consistent to what H&M uses in their Ad campaigns, so soft white light, will be used.

Lighting

List of Deliverables: Print Ad

We want to create a print ad that is similar to the aesthetic of an H&M ad campaign.

be standing on a white back drop. As the film plays, sourcing information about the garment will pop up, as a feature of the Layar Augmented Reality technology that this initiative integrates within H&M’s mobile App.

Motion Graphic

Basic fashion film featuring a model wearing a conscious collection garment, she will

Rendering of Augmented Reality in Action

Still image of a person holding a phone scanning the catalogue page. By creating a

mask we will be able to show the augmented reality content appearing as a GIF on

the phone screen.

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MARKET ANALYSIS

Size of Market

The North American Apparel industry is currently worth $403.9 billion and is expected to grow to $510.7 billion by 2018. In the North American market, the United States contributes to 91% of all revenue.

Also, 51% of the total revenue made in the North American market is from the sale of womenswear.

(MarketLine). 7%-10% of total revenue is brought in through e-commerce markets. By 2030, 25% of total sales are expected to come from Online markets (“H&M launches Online shopping in the U.S�).

Retailers Outside of Fashion

There are a few retailers employing this initiative outside of fashion, allowing us to analyze them in terms of a best practice and see how we can improve upon them in terms of our own initiative for H&M. Some of the retailers who are employing augmented reality technology are: Ikea, Sayduck,IBM, Panasonic, HP, and Office Depot.

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Ikea launched their augmented reality catalog in 2013 to enable customers to see how each piece of furniture would look inside of their interior space. This allowed customers to visualize how Ikea’s products would look in the surrounding of their room as well as analyze the measurements. (“Partners ArchiveAurasma”) Sayduck’s approach is similar to Ikea’s, in that they both deal with interior spaces and their elements.

Since 58% of consumers want to know the product’s information in-store before they purchase, and 19% will use their mobile device to do so. IBM took advantage of this information by using technology to provide consumers with personalized information when browsing the shelves so that they never miss a single thing and consumers are always ready to purchase immediately. (“Partners Archive- Aurasma”) Panasonic approaches this technology through their Lumix G3 camera campaign, the way it works is consumers with an iPhone can download the app, then use their mobile phone to scan the product and then other options related to Lumix Lifestyle will pop up on their phone. This technology allows consumers to view all of the related features the product has as well as similar products they offer on their website. HP also uses this technology to bring to life the print catalogue for Argos. With this, they have access to additional product information, special offers, contests, and online quizzes.(“Partners Archive- Aurasma”) A retailer taking a different approach to this initiative is Office Depot, with their Back to School AntiBullying campaign, using this technology to offer exclusive video content featuring the band One Direction. The way it works is fans can download and open the Office Depot AR app and by scanning the campaign they can unlock hidden content from limited edition back-to-school products as well as watching exclusive videos and information featuring the band. This initiative gives customers an incentive to shop at Office Depot while supporting a good cause. (“Office Depot - Aurasma”) After looking at these companies with their implementation of augmented reality as a best practice, it allows us to see the need for using the technology within our initiative for H&M to produce more curated content, that will engage the consumer, connect them with the brand, and overall allow them access to product information.

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TARGET MARKET Demographics With our initiative we have chosen to target the millennial market in the US, which is 24% of the population (“Reports”). H&M’s current consumer consists of men and women 16-35 years of age, we want to target our initiative towards the younger millennial segment, age 18-25. Their incomes range from an allowance from their parents to $60,000 a year. Their education levels range from currently being in high school to having a Bachelor’s degree or higher, as this is the most educated generation (“Demographic Status…”).

Psychographics The younger segment of the the millennial market we are focused on targeting is the “Trend Setter”. This segment of millennials participate across multiple social media platforms, and stay connected through the Internet. They are most likely to purchase apparel and electronics - “70% (of them) have purchased an electronic in the past month” (Oracle, 10). This makes them the the best consumers to target for our initiative because they have mobile devices they are most likely shopping on and “appreciate an interactive experience”, providing a need for our initiative of creating an interactive H&M catalogue, to connect this millennial segment of the “Trend Setter”, with the brand to ensure brand loyalty in the future. (Oracle, 10)

Behavioral Segmentation H&M’s target consumer cares about ethics and sustainability, but price is also an important factor, which is why they choose to shop at H&M, because they offer sustainable, affordable fashion that is current with the trends, which is another key factor for this target consumer, making it something we want our initiative to highlight. (“The Millennial Generation Research Review”)

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PORTER’S 5 FORCES HIGH -Technology is easily implemented -Increased CRM activities from companies

MEDIUM/LOW -Many AR providers

-Suppliers competing with same target audience -Suppliers can work with more than one company

LOW

-Limited amount of retailers making catalogs with interactive technology -Augmented reality not used in the same capacity as we are using it

MEDIUM

-Easy for customers to shop via brick and mortar stores as opposed to being inuenced by catalog

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LOW

-Others are implementing technology in different ways -Heightened / more engaging reading experience

Since our initiative integrates augmented reality within H&M’s catalogue we examined: the bargaining power of augmented reality suppliers, the bargaining power of customers utilizing augmented reality, the threat of new companies using augmented reality technology, the threats of substitution within the technology, and the overall competitive rivalry in the market. The ability for augmented reality companies to control the price is medium/low because there are ample companies creating this technology, however they are most likely working with many brands at the same time. Threats from other customers trying to integrate augmented reality within their CSR activities is low because other fashion companies are using the technology in different varieties, such as interactive window displays. The threat of substitution for augmented reality CRM activities is considered to be medium because it is easy for customers of the brand to be influenced by other aspects of the company, such as their website or brick and mortar store. The overall competitive rivalry for companies implementing augmented reality within their catalogues is low because the majority of companies are not creating catalogues and if a company is using augmented reality they are not using it in the same capacity as we are.

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TECHNOLOGY

For our initiative we chose to use an image recognition technology powered by the tech company Layar. The way it works is our initiative partners with Layar to hire a content developer to implement the augmented reality SDK,(Software Development Kit), into H&M’s mobile app. Augmented Reality “superimposes a computer generated image on a user’s view of the real world, thus providing a composite view” (“Augmented Reality...”) This would allow the customer to scan specified print content in the catalogue, where the app will pick up on triggers created on the page and unlock the augmented reality content, that will then play automatically on the screen of their mobile device (“Solutions”). Implementing the augmented reality capability into H&M’s mobile app will be crucial for creating an engaging catalogue experience for the millennial consumer.

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OPERATIONAL CONSIDERATIONS Beginning with the Spring season and taking place quarterly our Operational Plan for implementing our initiative within H&M’s mobile application starts with market research, which will be analyzed from March to May. This will include the AR(augmented reality) providers, functionality of the technology, and a shot list as well as moodboards regarding the content development. Our content development will focus on the content required to develop the catalogue - from the hiring of models, to stylists - as well as the content required in order for the technology to work - including the set up of triggers on designated print material. As the process is time consuming the planning will start two seasons away from the initial launch, in May, for the catalogue that will be distributed in November. In addition, testing of the AR material with the catalogue, functionality on mobile devices, as well as analyzing barriers of storage requirements will be demonstrated in August and September. The promotion of this technology including the re-launching of H&M’s mobile application and the distribution of the catalogue will be done during the implementation and post implementation phase of October through December. To determine the success of our initiative we will collect data during the post implementation phase as well to see how many sales were generated as a result from the use of the technology.

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OPERATIONAL EXECUTION MAP

Operational Map March

April

May

June

July

August

September

October

November

December

January

February

March

MARKET RESEARCH Functionality/Fesability of technology AR providers Content Development (Shot List, Story boards)

CONTENT DEVELOPMENT Style Looks Hire Models Pick Location(s) Test Shoot Shoot catalog material (print material) Shoot AR material (fashion film) Retouch/Edit Material Print Catalogs Develop SDK (Softwear development kit) Set Triggers

TEST TECHNOLOGY Implement SDK (Softwear development kit) Test AR material with catalog Test technology among employees

Test technology on Mobile Devices Test distance details on Mobile Devices Test balance between both perspectives and quality for viewers Test buffering/load time Determine barriers with storage requirements

IMPLEMENTATION Promotion of new technology Relaunch of APP Distribute Catalog

POST IMPLEMENTATION Data Collection

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PROMOTIONAL PLAN The promotional elements of implementing our technology will consists of Digital Marketing and Social Media posts, mainly focusing on Facebook, Instagram, and Twitter. We will also share catalogue highlights and trends through blog posts, as well as digital curated content through direct marketing initiatives of newsletters and emails. As part of our pre-launch we will release videos and exclusive content across all social media platforms, as well as email newsletters, and magazine print ads, informing customers about the upcoming catalogue, also it is when we will introduce the customers to the implementation of Layar’s augmented reality technology within H&M’s holiday catalogue. For the launch we will continue the use of social media posts, blogging, email newsletters, as well as the use of billboards promoting the distribution of the Holdiay catalogue, along with the re-launching of H&M’s mobile app, integrated with Layar’s augmented reality technology.

Post-launch the cycle will repeat itself with the distribution of the next catalogue.

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PROMOTIONAL MAP

Promotional Map Pre-Launch September

October

Launch November

December

Post Launch Janurary

Feburary

March

April

May

June

July

August

September

SOCIAL MEDIA Facebook Instgram Twitter Blogging ADVERTISEMENTS Billboard TV Ads Magazine Print Ads DIRECT MARKETIN Catalog Email newsletters

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VISUALIZATION

These were the deliverables produced for us as the visualization of our marketing campaign to promote our initiative of Impementing Layar’s augmented reality SDK into H&M’s mobile app. These delvierables were generated off of the basis of our creative brief and produced

by Chelsea Carter and Keleka Mobley, students we collaborated with in the FASM 311 class: New Media Methods for Retail and Digital Spaces. Our first deliverable is a mock up of a print advertisement to be displayed at a bus stop, promoting our new catalogue for the season. The second deliverable is a mock catalogue page that you can scan from the Aurasma app on your mobile device and it will unlock a short fashion film, showing H&M garments and their sourcing information. Our third deliverable is a video showing the functionality of the technology inside of H&M’s mobile application.

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1. DELIVERABLE

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2. DELIVERABLE

Scan page in Aurasma App to unlock video content.

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3. DELIVERABLE

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FINANCIAL PLAN

After analyzing the operational and promotional activities of this initiative, we created a list of expenses based on what this initiative would cost. We considered production expenses, (Appendix E), but didn’t include them in this plan as the company already produces a catalog so it is already a planned expense. The cost of this initiative is very reasonable for H&M considering the only additional expense is the cost of $12, 500 to implement Layar’s Augmented Reality SDK into H&M’s mobile app. The total cost of this initiative would be $3,264,000. (Appendix E)

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EXPENSES

Quantity Cost Frequency Total TECHNOLOGY Implementing SDK 1 12,500.00 12,500.00 Printing of catalog 1,500,000 1.00 1,500,000.00 Distribution of catalog 1500000 0.27 405,000.00 PROMOTIONAL ACTIVITIES Facebook 3,000.00 3,000.00 Twitter 3,000.00 3,000.00 Instagram 0.00 0.00 Blogging 3 1,000.00 Monthly 3,000.00 Billboards 3 2,500.00 7,500.00 Magazine Print Ads 324,000.00 324,000.00 Television Ad 1,000,000.00 1,000,000.00 Newsletter 6,000.00 6,000.00 TOTAL 3,264,000.00

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CONCLUSION

After analyzing the industry and market, as well as the combination of the return of the print catalogue and new technologies used in consumer outreach, we have created an initiative to make H&M’s catalogue a viable print material in today’s technology driven society. By implementing Layar’s augmented reality SDK into H&M’s mobile app we have the opportunity to provide the consumer with an engaging catalogue experience, allowing them to access exclusive curated content, and product information, as well as sourcing information, improving the impact of H&M’s transparency. Overall this initiative provides an oppertunity for H&M to set themselves apart from other fashion retail catalogues, giving them a leadership position when it comes implementing augmented reality technology to create an interactive catalogue experience that is engaging to the consumer.

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Appendix

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Appendix A

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Page 40

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Page 41

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Page 64

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Page 80

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Appendix B

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ExcERpt from the Intelligence Report: Multichannel Retail

Intelligence Report:

May 29, 2013

To access the full report, contact membership@L2thinktank.com

Multichannel Retail

about the Methodology the Methodology

Site

Search Search

Mobile

Multichannel Site Features

Desktop

Fulfillment: Pickup/Reserve in Store, Real-Time In-Store Product Inventory

paid: Deep Link to Locator, Geolocal Result

Store Events & Services: Promotion, Ability to Book/RSVP

organic: Deep Link to Locator, Google Places Location in Description, Specific Store Call Out, Map Loads

Mobile

online Discounting

paid: Deep Link to Locator, “Get Directions” Link

Shipping options/Incentives

Fulfillment: Promotes Pickup/Reserve in Store

Fulfillment: Pickup/Reserve in Store, Real-Time In-Store Product Inventory

offline Discounting

Digital Exclusives: Online-Only Product, Online-Only Services, Pre-Order

Email

organic: Deep Link to Locator, Specific Store Call Out, Map Loads

Loyalty programs & communications

Store Events & Services: Location, Timing, Promotes RSVP/Booking

Store Events/Services: Ability to Book/RSVP Store Locator: Detect Location, Directions, Contact Info, Integration of Wholesale/Outlet, Send Results to Email/Mobile, Community customer Service: Click-to-Call/Email Functionality, Prominence wish List/Registry: Availability, Integration with Desktop account & commerce Integration: Universal Account/Cart, PayPal, Loyalty Program Integration

wish List/Registry: Availability, Cross-Channel Functionality, Print/Send to Mobile

offers: Availability, Specifies Channel

Return policy: In-Store/Online, Cost

Store Locator: Placement on Email, Prominence, New Locations offline Discounting/Incentives: Specifies In-Store Availability, Unique Incentive Drives In-Store online Discounting: Percent Off, General Sales, Buy One Get One, Gift With Purchase, Redemption Method Digital Exclusives: Online-Only Product, Online-Only Services Shipping options/Incentives Loyalty programs and communications outlet/off-price/Diffusion Lines

User Reviews promoting Geolocal Services

the Brands

79 prestige retailers and manufacturers brands all have e-commerce and free standing stores 59%

11% Department Stores

apparel

73 percent have outlets

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10%

57 percent sell in wholesale

© L2 2013 L2thinktank.com. Circulation of the report violates copyright, trademark and intellectual property laws.

On average, have

watches & Jewelry

8%

6% Beauty

Home

4% Footwear

1% other

253 freestanding stores in the U.S.

Note: Tumi is the one brand in the “other” category. Do to rounding numbers do not add up to 100 percent.

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Appendix C

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Perceptual Map Checklist: X AXIS: MULTICHANNEL RETAILING NUMBER OF STORES WORLDWIDE 0-500 stores - 1 point 500- 2,999 stores - 2 points 3,000 + stores - 3 points NUMBER OF ONLINE MARKETS 0-5 1 point 5-10 2 points 10+ 3 points DIRECT MAILINGS (Sales Letters Postcards Catalogs) Yes- 1 point No- 0 points APPLICATION yes- 1 point no- 0 points Pick up/ Reserve in store?

Ability to book/RSVP to store events Store Locator?

Click to Call/Email customer service?

Wishlist? Integration with desktop use?

Universal account/ basket?

User reviews?

Push Notifications

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E-COMMERCE SITE yes- 1 point no- 0 points Pick up/ Reserve in store?

Store events promotion/ RSVP Offline discounts Online discounts Digital exclusives- Products or services?

Loyalty program Universal basket?

In store returns for Online merchandise?

In house blogger

Y AXIS: EFFECTIVENESS OF DIRECT MARKETING W/ TECHNOLOGY CRM ONLINE NEWSLETTER -Does the company have a newsletter -Does the company offer an incentive for signing up for the newsletter?

- Frequency of newsletters

Weekly 2 points

Monthly 1 point

EMAILS -Does the company send out emails to customers

monthly 1 point

weekly 2 points

daily 3 points RSS feeds -Does the company create RSS feeds

yes 1 point

no 0 points

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Appendix D

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EFFECTIVENESS OF MULTICHANNEL RETAILING Abercrombie & Fitch

American Apparel

Express

Forever 21

Gap

H&M

Top Shop

Urban Outfitters

Uniqlo

Zara

Number of World Wide Stores

2

1

2

1

3

3

1

1

2

2

Number of Online Markets

1

3

1

1

2

3

3

1

3

3

Direct Mailings Yes/No

0

0

0

1

1

1

1

1

0

0

Pick up/ Reserve in store?

1

0

0

0

0

0

0

0

0

1

Ability to book/RSVP to store events

0

0

0

0

0

0

0

0

0

0

Store Locator?

1

1

1

1

1

1

1

1

1

1

Click to Call/Email customer service?

1

1

0

1

1

1

1

0

0

0

Wishlist? Integration with desktop use?

1

0

1

1

0

0

1

1

0

0

Universal account/ basket?

1

1

1

1

1

1

1

1

1

1

User reviews?

0

1

1

1

0

0

1

1

1

0

Push Notifications

1

1

1

1

1

1

1

1

1

0

Pick up/ Reserve in store?

1

1

0

1

0

0

1

0

0

1

Store events promotion/ RSVP

0

0

1

1

0

0

1

0

0

Offline discounts

0

1

0

1

1

0

0

1

1

0

Digital exclusives- Products or services?

1

1

1

1

0

1

1

1

0

1

Loyalty program

1

1

1

1

1

1

1

1

0

1

Universal basket?

1

1

1

1

1

1

1

1

1

1

In store returns for online merchandise?

1

1

1

1

1

0

1

1

1

1

In house blogger?

0

0

1

1

0

1

1

1

0

0

14

15

14

17

14

15

17

15

12

13

Abercrombie & Fitch

American Apparel

Express

Forever 21

Gap

H&M

Top Shop

Urban Outfitters

Uniqlo

Zara

Does the company have a newsletter

1

1

1

1

1

1

1

1

1

1

Incentive for signing up for the newsletter?

0

1

1

0

1

1

1

0

0

0

Frequency of Newsletter

2

1

1

1

2

1

2

2

1

2

Does the company send emails?

1

1

1

1

1

1

1

1

1

1

Frequency of Emails

2

2

2

2

2

2

2

2

2

2

0

1

0

1

0

1

1

1

0

0

Does the company post counpons on their site?

0

0

1

1

1

0

1

0

1

0

TOTAL

6

7

7

7

8

7

9

7

6

6

APPLICATION

E-COMMERCE SITE

TOTAL

EFFECTIVENESS OF DIGTIAL CRM NEWSLETTER

EMAILS TO CUSTOMERS

RSS FEED Does the company create RSS feed COUPONS

57

Appendix E

58

Expenses Including Costs of Production

59

Cost of Models from Simon Rogers of New York Agency , The Agency Online

60

Cost of Photographer, Retouching, Stylists, Studio, Equipment, etc. from New York Photographer Lisa Houlgrave.

61

62

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