h&M
interactive window displays
Table of Contents
i. executive summary
ii. company summary
iii. strategic intiative
Identifying KSF's opportunities & threats
Overview Current positioning Current distribution Current communication & Promotional activities
Key objectives Rationale Key players Technology & Implementation Execution plan Visualizations
iv. market analysis
x. target consumer
Size of the market Future competition Porter's 5 forces analysis
Demographic segmentation Lifestyle, phychographic & Behavorial segmentations Customer profile
xii. financial plan
xii. conclusion
xI. COMMUNICATION & PROMOTIONAL PLAN Integrated communication plan Pre-launch, launch and post Launch promotional activities
executive summary
We at H&M have developed a strategic initiative to enhance our consumers’ in-store experience through interactive glass window displays. Implementing this best practice in our flagship stores will encourage more consumer engagement, increase volume in units & revenue and simplify the visual merchandising process. This initiative is comprised of three key components: the glass cut to scale from Corning, the projectors purchased from Screen Solutions International and the technology that fuels our innovation from Reflektion. We plan to integrate this idea into our Oxford Circus location in London, the sixth most desired shopping destination in the world at over 1.5 miles long. We face high levels of competition from the surrounding 547 retail operations comprised of luxury international brands and 67 flagship stores. This implementaion will give us the competitive advantage we need to differentiate ourselves.
h& M's company history
history of H&M 1947 H&M begins in Sweden, selling women’s clothing.
1980-1999
Global expansion: Germany, the Netherlands, Belgium, Austria, Luxembourg, Finland and France.
1964
The first store outside Sweden opens in Norway. H&M.com
2010
The first Conscious Collection is launched, made with more sustainable materials such as organic cotton and recycled polyester.
2004
H&M’s first collaboration with Karl Lagerfeld & then Roberto Cavalli in 2007.
2013-2014 2006
Major expansion of H&M’s online sales begins in Europe. The first franchise stores open, in the Middle East.
Expands online to the US. H&M first to start “Garment Collecting”, offering collection in stores globally for re-use or recycling.
h& M's vision
H &M's Vision “Our vision is that all our operations are run in a way that is economically, socially and environmentally sustainable.�
Our Commitments include: 1. Provide fashion for conscious customers 2. Choose & reward responsible partners 3. Be ethical 4. Be climate smart 5. Reduce, reuse, recycle 6. Use natural resources responsibly 7. Strengthen communities
ownership structure
Name Stefan Persson with Family
# of Shares
% of Shares
% of voting shares
623,849,332
37.69
69.71
Lottie Tham with Family
88,080,400
5.32
2.59
Aleca PensionForSakring
64,645,000
3.91
1.90
Swedbank RoburFonder
40,634,361
2.46
1.19
29,299,686
1.77
0.86
Clearstream Banking
28,710,866
1.73
0.84
J.P. M Chase
26,281,782
1.59
0.77
AMF-Forsaking Och Fonder
H&M Financial Report 2013
OWNERSHIP STRUCTURE H&M, the second largest global clothing retailer, is still majorly owned by the founder Erling Persson’s family. Erling’s son Steffan is the the chairman and main shareholder, while his grandson Karl-Johan is the current CEO and president. Steffan Persson and his son Karl-Johan own a dominating 69.71% of the global brand, encompassing over 623 million shares which amount to 37.69% of the company’s overall shares. Steffan and Karl-Johan’s sister, Lottie Tham and her husband Pieter own the second highest share at 2.59% which controls 88,080,400 shares.
Lottie and her husband however hold no position within the company and serve only as members of the company’s Election Committee. The Persson family has adamantly remained major shareholders to not only continue the growth of the family legacy, but to also keep the brand’s core values at the forefront. The Persson’s strong passion and efforts to remain a sustainably based company is integral to the family, a unique differentiation for the brand among the fast fashion industry. Share prices for H&M are currently at $8.00 a share, meaning Steffan and his family own a total of $6.7 billion in total shares.
current revenue
current revenue SALES INCLUDING SEK 150 BILLION
converts to 128.6 billion PROFIT AFTER TAX SEK 17.2 BILLION
(SEKm)
full year 2013
full year 2012
Q4 2013
q4 2012
Net Sales
128,562
120,799
36,495
32,502
Gross Profit
76,033
71,871
22,189
20,017
Gross Margin %
59.1
59.5
60.8
61.6
Operating Profit
22,168
21,754
7,260
6,533
Operating Margin %
17.2
18.0
19.9
20.1
Net Financial Items
358
531
77
103
Profit after financial items
22,526
22,285
7,337
6,636
Tax
-5,374
-5,374
-1,729
-1,349
Profit for the Period
17,152
16,867
5,608
5,287
Earnings per share, SEK
10.36
10.19
3.39
3.19 H&M Financial Report 2013
future growth plans
future growth plans
H&M aims to continue growth, add value for its customers and employees, and contribute to the growth and prosperity of the markets they have infiltrated. In regards to the countries we work with in enabling genuine improvements in living conditions we strive to use our resources in creating global awareness and support for our three developmental challenges of clean water, education and strengthening women. In addition to our sustainable efforts we are working to reduce the amount of greenhouse gas emissions in a single item’s life cycle and searching for renewable resources. In terms of expansion, H&M continues to grow through new stores and online sales. The company is expanding in existing markets and into new countries, through all its brands and through new concepts. Incorporating our technology within our flagship window displays around the world is an opportunity not only to cut down on the inconveniences of traditional merchandising but enhancing our consumer engagement. This innovation could potentially allow the company to become more transparent by displaying videos of our efforts in other countries on our windows.
We are working with industry professionals and technology specialists to stream our fashion shows live at any store location at any given moment. In the future we are also looking towards incorporating a camera that allows the traffic outside to see real time footage of other flagship locations and interact with brand advocates from across the world. Our online global rollout continues. Our latest and most exciting news was the launch of our H&M’s online store now available to the US market. H&M offers online shopping in nine countries, a great achievement but still needs growth. With over 3,000 stores in 53 markets our online presence needs to be just as impactful as our brick and mortar presence.
53 Markets
MARKETS 2013
NEW MARKETS 2014
NEW MARKETS 2015 H&M Financial Report 2013
swot analysis
strengths 1. 2. 3. 4. 5. 6. 7. 8. 9.
Strong presence with over 3,000 stores in 53 markets Multi brand portfolio Strong financial performance- sales increasing every year Wide range/assortment of products: men, women, children Affordable pricing for trendy pieces Steady global expansion from year to year Sustainable focus Collaborations with designer like Karl Lagerfeld, Roberto Cavalli, Alexander Wang Omnichannel efforts combines print advertising with mobile and email marketing
weaknesses 1. Quality issues with fast fashion 2. Little attention paid to online presence- offering only 9 markets online shopping 3. Due to company’s size, implementing change is slow -moving 4. Difficulties in being sustainable yet affordable while main tain brand position 5. Product recalls
opportunities 1. Increase E-commerce presence 2. Increase consumer education/brand heritage globally 3. Organic Growth Initiatives 4. Reduce waste from traditional visual merchandising dis plays
threats 1. 2. 3. 4. 5. 6.
Fast fashion competition stealing technological advance ments for their betterment Manufacturing costs rising, especially in raw materials Economic downturn within 53 markets Fluctuations in government policies, taxes and politics Product substitution Changes in Fashion Trends
Overview of SWOT Analysis H & M is a global clothing retailer based in Sweden. The company’s strong financial performance, wide geographic presence, multi brand portfolio, affordable pricing and sustainability initiatives have strengthened its position in the market. In addition, positive outlook for e-retail market, redusing overall waste from traditional window displays & organic growth initiatives ensure a positive future for the company. However, product recalls, quality issues and economic downturn in so many markets are our highest concerns. Furthermore, we face challenges from changes in fashion trends and meeting demands, increase in counterfeit products and intense competition.
referenceusa.com
perceptual map
perceptual map H&M is located in the top right quadrant which is heavily infiltrated with our competitors Zara, Topshop and River Island. Implementing this innovative initiative will give us the competitive advantage we need to keep our consumers engaged and invite new consumers to shop. We strive to give our shoppers an e-commerce experience in-store, differentiating us from other popular fast-fashion brands.
sales distribution
sales distribution Our company retails its collection through various sales channels including retail stores, online and catalogue sales. “H&M’s collection is manufactured by over 900 independent suppliers with 1,900 factories at the company’s local production offices located in Asia and Europe.” The produced goods are transported to various distribution centers from the production units through different means of transport which are finally distributed to the stores and regional replenishment centers. From our headquarters in Stockholm, our company “directs a rapid-response manufacturing process to capitalize on design trends immediately. H&M moves designs through production and into its retail sales channel with a three week to six-month lead-time. H&M constantly redefines distribution strategies in response to changing retail market conditions and production conditions in its worldwide manufacturing centers.” This ensures that we can improve the efficiency of our production flow.
This model has direct impact in H&M’s retail stores where it sells its products to consumers. H&M’s corporate buyers in Sweden actively manage its inventory, researching itemized sales reports by country, store, and, most importantly, type of merchandise daily. Our buyers then use this information to reallocate production or shipments, reducing potential overstock problems. The company estimates that “each store, all 3,300, receives between 500 and 1,000 new items daily, with total sales of over 550 million items annually company-wide.” To provide an example of how we alter our assortment, if a particular fashion proves exceptionally popular to men in the U.S., but not in Europe, the company can shift inventory in that product from European stores to meet demand in the U.S. The channel also enables H&M to respond to market segment changes.
H&M Annual Report 2013
Between 500 -1,000 new items daily total sales 550 million (+) items annually
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advertising
Advertising Costs
H&M currently operates with a 3.5% net spend on advertising from a total revenue of £13 billion. The global brand did not take a major role in advertising initiatives until the of the launch of the company’s online website in 1998. The brand advertising began rather modest, with mostly unknown models and photographers. In the wake of collaborations, we began the initiative of high spend advertising, which is now an integral part in H&M’s marketing process. H&M has since grown increasingly more sophisticated and high end with both their advertising images, as well as the models and photographers which they hire. Since 2004, when Karl Lagerfeld designed a one-off capsule collection for the company, H&M has taken a leaf from the high fashion playbook, churning out glossy campaigns fronted by top models like Daria Werbowy and shot by image makers like Inez van Lamsweerde and Vinoodh Matadin. We then went on to host full scale runway shows during fashion weeks in grandiose locaions while featuring musical performances by Kanye West and more celebrities than fashion editors. But it’s certainly not the first time the high street retailer has adopted high-end communications tactics
While H&M struggled in the past, we certainly took large risks spending high volumes to secure seductively glamorous advertising to ultimately attract the high end and designer customer. H&M went on to create campaigns full of supermodels, innovators and upper crust clients. Such clients include; Steven Meisel, Martin Margiela, Christy Turlington, Isabel Marant, Versace, Jerry Hall and Jimmy Choo. Beyonce Knowles, arguably one of the biggest pop culture icons in the world recently signed on again with H&M in 2014, after inking a £32million deal with Pepsi in 2012. Celebrities inducing supermodels Miranda Kerr, who signed on in 2014 and Gisele Bunchden have been prominent faces among the brand’s illustrious advertising. Gisele Bunchden who has done a total of 12 campaigns, recently sang Blondie’s “Heart of Glass” for the summer 2014 campaigns. H&M also released the song to iTunes for purchase, along with the campaign “music video”, transforming our marketing into immediate profit. According to Forbes, Miranda Kerr makes 2.7 million dollars a day for a campaign shoot, and Gisele Bunchden, the highest paid supermodel ever, makes 4.5 million dollars a shoot.
H&M has made a groundbreaking move with their 2014 Superbowl advertisement featuring David Beckham. The 30-second spot aired during the second quarter of Super Bowl XLVIII and audience viewers with Samsung smart TV’s were able to buy featured H&M products directly from their televisions. It was the first example of a new form of commerce called t-commerce, and it’s been a long time coming.
"Nearly 500Billion gbp" H&M Annual Report 2013
H&M Promoting Sustainability Initiatives We have been running our first campaign to promote recycled clothing since February of 2013. We are striving to raise awareness of our sustainable efforts and encourage more shoppers to donate unwanted items of clothing. We reward our customers who donate their apparel with a £5 discount voucher for every bag of clothes, in any condition.Our print campaign is the first step in advertising our efforts, with further plans including a social media push. “We want to inspire people to make a difference and engage with our customers to do things that are more sustainable. We are seeing increasing interest from customers in finding out what they can do to be more sustainable and help us achieve our goal of making fashion sustainable and sustainability fashionable.”—Persson
TV Campaign Our TV campaigns are minimal, highlighting our clothing with catchy music and very little text. Most ads feature popular celebrities and top collaborations with fashion designers like Alexander Wang, Karl Lagerfeld and Roberto Cavalli. Our current strategy is based on the future of digital consumption. We have created a multitasking strategy also known as “stackable meshing”, a coined term meaning: shifting (non-simultaneous use of multiple screens), stacking (using a second screen while watching TV for unrelated media use), and meshing (using a second screen to complement and engage with television content). If a consumer is watching TV and is inspired by a Alexander Wang garment he or she will most likely look up the desired product on the second device, whether it is a tablet, mobile device or computer. It is pertinent that we peak the interest of our consumer and hone in on impulse purchases.
Radio
H&M, in the past, has used radio announcements in promoting new collections like Alexander Wang or store openings with celebrity guests such as Lady Gaga. We also have collaborated with apps like Spotify, ITunes, 8track, Facebook Music and Radio.com to create playlists for fashion shows and events. We have collaborated with these apps because of the large amount of loyal listeners they drive within their platforms along with their target demographic, similar to ours.
At H&M we have a fashion catalogue, intended to keep our consumers up-to-date with the trends of the season within our collections. We’ve have positive media coverage in luxury magazines such as W magazine, Glamour and Vogue. This fall we’ve have announced a magazine editorial for Fall 2014 featuring Karlina Caune, Amanda Wellsh by Giampaolo Sgura. The company has also included the editorial the Alexander Wang’s latest collection that will be sold at local H&M stores. This initiative not only promotes H&M brands but also is entirely controlled by the company with no outside influences.
Events
Events in the UK include collaborations with magazines like Glamour. On November 5, 2014, H&M’s Regent Street location in London, hosted a memorable event offering shopping, live music, drinks and canapés as well as goodie bags for all who attended. In order to attend our VIP party customers had to text to enter to win exclusive tickets to Alexander Wang and H&M shopping event. The last event at Oxford Circus was November 6th with Alexander Wang featured in store. Coming up for Christmas H&M and GQ are hosting three exclusive pre-Christmas shopping events in London, Manchester and Glasgow. Evenings will feature DJs, complimentary drinks on arrival, a grooming station for a spruce up and a 20% discount on all menswear making this an ideal opportunity to stock up on fashionable attire for the festive season.
overview H&M has a high involvement on social platforms in posting promotional videos, press, events and photos of products for inspiration. We have proven to be effective in these platforms through consumer engagement in surveys, sweepstakes, hashtag events and the like. Our Facebook page proves to be the number one preference with the highest number of followers, posts and likes. Instagram has fewer posts but more consumer involvement with nearly the same amount of likes as the Facebook page. This opens an opportunity to post more on Instagram with fashion forward images that pose inspiration to consumers. The other outlets of social media that H&M is currently present on are Google Plus and YouTube but lack the strong following and active posts. This is an opportunity to continue to post regularly and reach more target consumers.
crm activities
CRM Activities: H&M engages in email marketing, newsletters, blogging, the option to purchase from our online catalog through their website and the H&M application available to iPhone and Android users. H&M’s emails have revised, personalized content depending on the shopper’s needs or previous purchases to combat shopping cart abandonment. We entice our customers to sign up for emails and notifications from the newsletter by offering 20% off their purchase. Our blog, found on hm.com, is intended to provide our consumer insights into culture, fashion and beauty trends and offers them suggestions through our “Editor’s picks.” Our application offers the same features as our website in a smaller format adapted for your specific phone.
H&M.com
Blogging
emails
20% with newsletter
objectives
Key Objectives 1. 2. 3. 4. 5.
Increase consumer engagement Drive volume of units and revenue Raise consumer product awareness Enhance shopper’s in store experience Bring the attention of our e-commerce audience to brick and mortar
Overview of Key Objectives The key objectives behind the implementation of the Corning & Screen Solutions technology into the windows of the Oxford Circus flagship in London vary, but they all gear towards driving volume, sales and increasing traffic. With the implementation of this technology into the storefront windows, we can instantly make the store the most innovative and visually mobile window display currently in place at Oxford Circus. The integration of this technology will place H&M’s store display at the forefront of retail visual merchandising display. With the latest in projection technology being used, we can create customized displays, mood boards and even promotions, without limits.
rationale
Rationale In the past we have been known for our “tech-savvy” store designs, a perception and expectation we strive to uphold within all our stores but primarily our flagship locations. To provide an example, our 4-story New York flagship store integrated digital payment options in the fitting rooms and “interactive mannequins” that play videos, flash photos and special deal alerts within the screens on their bodies. We even incorporated a virtual runway encouraging our shoppers to have their catwalk performances projected on the store’s external LED screens in Times Square. Although our consumer engagement strategies might not directly affect profit, we rely heavily on positive press coverage, word of mouth and the overall experience to project long-term benefits.
visitlondon.com H&M.com
Rationale The fashion industry is highly competitive. Companies constantly try to find ways to grab the attention of their consumers while also building an established relationship. Many companies have already implemented different forms of interactive technology in their brick and mortar locations in order to increase the in-store experience. The integration of this glass technology will eliminate the need for mannequins, bulky floor sets and will ultimately reduce the amount of waste from unwanted displays. We felt it was crucial to implement this technology within the Oxford store due to its 9 large street-facing windows and high volumes of foot traffic. In addition, we face high levels of competition from the surrounding 547 retail operations comprised of luxury international brands and 67 flagship stores.
visitlondon.com H&M.com
key players
Suppliers & Vendors: 1. Xbox SmartGlass turns your mobile phone or tablet into a second screen that intelligently interacts with your Xbox to elevate your entertainment experience. Xbox SmartGlass allows for your devices and TV to talk to each other to enhance your favorite TV shows, movies, music, sports and games. 2. Pro Display is a UK manufacturer at the forefront of display technology, focused on developing new and exciting ways to advertise and entertain. They offer “Intouch” a unique and innovative touch solution enhancing presentations whilst increasing audience interaction. 3. GT Advanced Technologies, creators of Sapphire Glass, have provided the interactive glass displays on Apple’s products: tablets, iphones, etc.
Retailers Employing this practice: There are no retailers currently employing our practice, allowing H&M to have that competitive advantage. However we have researched similar companies that can be a threat whether directly or indirectly. 1. Tap to shop Spanning 15 windows on Brompton Avenue, Polo Ralph Lauren’s displays use NFC and QR codes to allow for interactivity. Consumers can tap or scan lenticular prints and stickers with their phones, which brings up a landing page. This site includes an interactive map directing consumers to the Fashion Lab in Harrods, the new section of the store where Polo Ralph Lauren for women is located. The landing page also includes a link to Ralph Lauren’s mobile Web site, where consumers can view the collection, even if the store is closed. 2. LEGO Many retailers are creating interactive experiences that give customers extra incentive to come inside, like the LEGO Store display in Chicago. The giant display uses a Kinect to turn anyone standing outside into a video game character they control with their body movements.
industry trends
1. Omnichannel retailing will be the norm Retailers will continue to realize that they need to connect with users on multiple channels and touch points simultaneously or even interchangeably. In 2014, more retailers will give customers the ability to interact and complete transactions on their own terms. In other words, if a customer wants to view an item online, purchase it using their phone, and return it by dropping by the store, they can do so in a smooth and seamless way. UK fashion retailer Oasis is doing a very good job in omnichannel retailing. The merchant gives customers the flexibility to browse inside the store, then purchase online and vice versa. Shoppers can have their products shipped, or they can choose to pick it up. Additionally, the staff members at Oasis each have their own iPad which they use not just to process payments, but to assist shoppers when checking sizes, styles and availability. If a particular item isn’t available in the store, the staff can use their iPads to help shoppers place orders online.
retail trends
2. The mobile wallet will continue to rise Cash and credit cards won’t be things of the past any time soon, but mobile will definitely get a huge chunk of the payments pie in the coming year. According to Forrester Research, mobile payments will amount to $90 billion in the coming years. And we anticipate that in 2014, retailers will be taking big strides towards that number by adopting solutions such as PayPal, Google Wallet, Square Wallet, Dwolla, and more.
retail trends
3. Shoppers will get more personalized in-store experiences One-size-fits all marketing just won’t cut it anymore, which is why retailers will start implementing solutions to personalize each customer’s experience.While ecommerce sites have been doing it for years through tailored landing pages, offers, and recommendations, a lot of brick and mortar stores will also get in on the fun next year. Thanks to Bluetooth Low Energy (BLE), a technology that lets Bluetooth 4.0 devices such as PayPal Beacon, Estimote, and iBeacon communicate with smartphones, retailers will be able to send tailored notifications to each shopper’s device, depending on where they are in the store. Major League Baseball effectively demonstrated this technology when it tested Apple’s iBeacon at the Citi Field stadium in New York.
retail trends
4. Advancements in technology implementation We anticipate that major retailers will implement immersive experiences with the use of large, interactive displays that are meant to fully engross customers to the point where they kind of forget that they’re inside a store. To the customer, the experience is interactive, engaging, and powerful. Examples of retailers already doing this include the Nike Fuel Station in London which has huge LCD displays that mirror shoppers as they move through the store. Similarly, Gucci has recently set up five columns of super high resolution displays that enable shoppers to browse various products using hand gestures.
retail trends
5. The number of mobile businesses will increase Thanks to mobile POS systems and other cloud applications, people can now do business from anywhere. This has paved the way for on-the-go stores such as food trucks and pop-up stores. In 2014, as mobile technology continues to advance, we expect mobile businesses to evolve with it. For instance, aside from food trucks, expect to see more fashion trucks, flower trucks, and even hair salon trucks. Pop-up stores, usually reserved for apparel retailers, will diversify as well. Amazon for instance, recently set-up its own pop up store in a San Francisco mall, while Google has its own Chromebook pop-up stores in various airports.
retail trends
6. Customers need for speed will grow According to Retail Info Systems News, associates will have a ton of customer information at their fingertips, “including if the consumer opts in, their shopping behavior, what shops around the world they purchase from, what they have in their basket online,� and more, enabling them to provide personalized offers and recommendations instantly. Speed can also apply to order fulfillment. As Retail Customer Experience put it, "By 2016, 50 percent of national retailers, will invest in distributed order management, enterprise inventory visibility, and workforce management to enable same day fulfillment."
retail trends
technology
Technology & Implementation For more than 160 years Corning has been an American manufacturer of specialty glass, ceramics, optical physics, along with LCD glass for industrial and scientific applications. Corning is one of the world’s leading innovators in materials science and has developed “Gorilla Glass”, a durable and scratch resistant material that our windows will be made of. Screen Solutions International is the company responsible for implementing the lining projection screens to protect Corning’s glass and provides H&M with projection machines. The projector would be located beneath the glass out of sight and functions off Bluetooth. Screen Solutions also offer screen protectants and anti glare cling on. These will beneficial so the consumer could see the images any time of day. The company that is responsible for fueling the technology is Reflektion. This tool is vital in creating a digital visual merchandising display, portraying brand identity and displaying promotional materials.
In regards to store operations, the management and visual merchandising teams will be provided with a tablet with capabilities to receive designs from our corporate offices. Possibilities with designs and future advancements are endless. Incorporating a camera with live feeds of street traffic so our consumers have the opportunity to interact with one another across the world is projected to increase consumer engagement and indirect sales in the future. Another possibility of advancing this technology is to turn our windows into a virtual catwalk with real time streaming of our fashion shows, allowing all those near by or nowhere near a television to still be a part of the action. We look forward to the unlimited amount of opportunities that will be presented.
corning, screen solutions international, reflektion
renderings
execution plan
overview of execution plan Market Research will be primarily done in the first two months of the year, January and February. In these two months we will perform extensive market research in order to develop our justifications for this innovation. Within the months of March and July we are focusing solely on researching the most cost effective companies that have the time and resources available to reach our goals. The period of testing follows in the months of August and October where the efficiency and the impact of Screen Solutions and Reflektion will be evaluated. Our evaluation will be executed through focus groups and feedback from the employees using this new technology. Implementation is the final and most excited step where all three companies will incorporate their services to create our window display.
12 Month Execution Plan Execution Plan Jan Market Research Glass Companies Projection Companies Technology Provider Research &Content Development Glass Companies Projection Companies Technology Provider Testing Screen Solutions Reflektion Implementation Corning Glass Screen Solutions International Reflektion
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
market size
fast fashion Fast fashion is a term used by fashion retailers to acknowledge that designs move from catwalk to store in the fastest time to capture current trends in the market.The market within our Oxford Circus location in London is rather large with over 1.5 miles of shopping. In the specific area of Oxford, London we face high levels of competition from the surrounding 547 retail operations comprised of luxury international brands and 67 flagship stores. With a population of 63 million, the total size of the fast fashion United Kingdom market of clothing is € 59 billion. Thus, British consumers spent about € 900 on fashion, this is slightly above the average of € 700 per year. The U.K. fashion market is a leading industry well known for key players like Burberry, Marks & Spencer, Next, Topshop, Asos, Mulberry, Supergroup and French Connection. The overall expenditures of the clothing and textile sector of Oxford is € 562 billion.
visitlondon.com
future competition
Future Competition Many other retailers could benefit from the glass technology initiative; it is whether they want to incorporate it in their store. Companies that sell any products are constantly thinking of new ways to engage with the customer. The retail industry is dense and companies are finding new ways to implement interactive technology in hopes of creative a unique brand image. While deciding how beneficial the glass technology is to H&M’s business, we looked to indirect and direct competitors and how they were using technology to successfully interactive with their consumers. An indirect competitor, Lego is using a large format interactive technology. Lego collaborated with Intel to showcase what they are calling an Experiential Retail Revolution. Intel created for Lego a virtual experience that doubles as a game where kids are virtually transformed into Lego figurines that mimic their every move. The technology is located outside of the store as a window display resulting in an increase of traffic. Although Lego is not a direct competitor they are a company involves technology the effectively engaging the customers. Macy’s is direct competitor that has teamed up with Kinect from Xbox One to create an interactive holiday experience. Macy’s is known for extravagant window displays especially for the holidays. As customers walked by the window of Macy’s the wintery snow falling display, the imaged moved based on the customer movement. This initiative was effective and made the customers stop and interact with the brand. Based on their creativity in technology so far, could result in a strong competition in the future. Another concept of competition in technology is creating an augmented reality; bring many other competitors to consider. Companies like Sephora, Diesel and Dior have been using this technology to their advantage. Sephora is teaming up with Volta. A technology developed by Volta puts the Sephora customer in a snowstorm with a polar bear. Totally immersing them in a virtual reality. Diesel is using the similar idea and teaming up with Glimm Screens and 24-7 Media Technology. The customer stands in front of the technology and is the star of his/her rock band concert. Dior is using augmented technology and working with Amadea Technologies puts the customer in a world of flashing paparazzi lights making the customer feel like a celebrity. Competition is a reminder that there is always growth for improvement. Researching how the competitors implement the different technologies give H&M insight on how to implement customer engagement with in our company.
techland.com
porter's 5 forces
Competitive Rivalry- Low • Fast fashion is highly competitive as a whole. It is a saturated market and there is competition for the market share, there are many companies that provide the same clothing similar to design at competitive price points. • Competition is low, so the attractiveness to new technology increases foot traffic. • No other retailer in fast fashion industry is implementing the exact technology concept to window and floor sets.
Bargaining Power of Suppliers- Medium High • There are only a few suppliers that are capable of producing the glass technology. • The power is in the hands of the suppliers. • Could be a disadvantage because suppliers could work with any company that took interest.
porter's 5 forces: Glass Technology Implemented in H&M's Window displays
Threat of Substitute of Products: Low • Other major retailers have not yet implemented the interactive visual merchandising displays, hence why the threat of substitution is low.
Threat of New EntrantsMedium Low • Few glass technology distributors that don’t have the proper resources to make the initiative possible. • Technology requires a large amount of capital & skilled personal are needed to install new glass technology. • Dominant retailers in industry starting to expand business into new markets that is costly and increases their market share. • H&M’s multi sensory and virtual experience lowers the threat to the market share.
Bargaining Power of Buyers- Medium Low • If the demand increases there are only a few suppliers. • No other retailers have employed this practice to our extent.
Overview of Porter's 5 Forces Our overall results were Medium/Low due to the low amounts of suppliers, relatively high amount of bargaining power that these suppliers have and the medium/low bargaining power of our consumers. If the demand increases, this will force other suppliers to look into manufacturing this product but as it stands now H&M is in a good place to employ this practice. This will ultimately give us a competitive advantage.
demographics
demographic segmentation Trendy minimalist: Our customers aren’t afraid to stick with the basics, however, they know how to add an element of flair with eclectic pieces from our designer colloborations. Age & Gender: Oxford’s population is relatively young due to the large number of university students in the city 35% of the population was aged between 15 and 29 years (compared to a UK average of 20%), and the city has the youngest median age - 29.9 years - of any place in England & Wales. Ethnicity: The largest non-white ethnic groups represented in Oxford are Pakistani, Indian, Black African, ‘other Asian’ and Chinese ethnic groups. Education: Oxford is, in general, a well-educated city - in 2011 an estimated 43% of the population was qualified to degree level or above compared to an England average of 27%. At the 2013 Census, 24% of the city’s adult population was a full-time student (30,000 people) Housing: The percentage of households who own their home is relatively low in Oxford 47% compared to 63% in England. The percentage of households who rent their home in the private sector is high - 28% in Oxford compared with 17% in England. At the 2013 Census there were estimated to be 55,400 households containing 133,200 residents - an average household size of 2.4 people. shopping habits: Our consumer has the luxury of impulse purchases due the rapid life cycle of fast fashion. They enjoy versatility for a great price, giving them the option to change out their wardrobe often. With H&M's designer collaborations the options are endless. media consumption habits: They are heavily influenced by social media, blogs and their peers in terms of keeping up with trends. Our consumers tend to follow fashion week, celebrities and designers on Instagram, Twitter and fashion websites like Womens Wear Daily and Vogue. visitlondon.com
customer profile Name: Yin Liu Age: 23 years old Lives in: SoHo, London Occupation: aesthetician at the Away Spa in the Four Seasons Hotel in Hyde Park Passions include: Traveling, equestrian activities, attending local networking events, keeping up on the lastest updates in fashion & technology and blogging. Hobbies: Frequents farmer’s markets, sample sales, the local art galleries & museums as well as many concerts and music festivals. Shopping Habits: Enjoys fast fashion because of its ability to produce versatile looks quickly. She gears toward accessible brands with an average price point which allows her to change her closet as often as she changes her hairstyle.
"out with the old, in with the new"
promotional plan
our plan to promote For the promotional aspects of the implementation of this technology at our Oxford Circus location in London, we will be focusing on pre-launch, launch and post-launch activities. Pre-launch we will have a mass mail send out, consisting of email blasts, specific event newsletters and major press releases focusing on as well as coverage on top tier and targeted items in the pop-up. Highest press volume will appear in top UK magazines, such a ELLE, Tattler, British VOGUE and the DailyMail. Additional press will consist of photos and event dates and technology information across all social media outlets and the brand’s newsletters. Pre-launch posts will me every three days, the day before and of the launch will be posts every six hours. For the launch event we will invite both UK and international fashion pace setters, innovators, and celebrities. Elite event guests will include Miroslava Duma, BryanBoy, Jo Elvin (Editor-in-cheif of Glamour), VOGUE British Editor Alexandra Shulman. A total of fifteen local stylists and bloggers will also attend the launch and holiday events. These style setters will create high press excitement, resulting in traffic increases drawing more potential consumers. The high press activity and race day involvement will make the pop-up shop an integral location during the races. The heavy press and innovator presence surrounding the brand will represent the high brand quality and loyalty, submersing the technological advancements among this new audience. Post launch we will have another press run, with heavy coverage of event press, creating broader and returning awareness of the brand into this highly potent market. Press coverage will also include highlights, sales figures, as well as coverage on top tier and targeted items in the pop-up. We will push to shed light and once again address brand power and heritage, working to secure not only brand loyalty, but a secure future of growth in China, one of the most powerful markets within our economy.
11/15/14
Pre Launch
January Print Ads Glamour Look! Grazia Vogue Elle The Guardian Daily Mail Digital Ads Reueters WWD site BBC Telegraph site Daily Mail site BOF site H&M site Social Media Facebook Twitter Instagram Newsletter Google + Youku Pinterest Youtube Events Launch Black Friday Holiday Party NYE BallDrop Implement
Promotion
February
March
April
Install
May
June
July
August
September
Launch
October
November
Post Launch
December
Implement
January
financial plan
oxford,london
SHANGHAI
sweden
Roll Out Budget REVENUE AND SAVINGS
2015
2016
2017 Notes
Projected total revenue of selected locations
$36,786,055 SEK
$37,521,777 SEK
$38,272,213 SEK
Projected revenue based on average annual growth
Project increase due to initiative
$37,153,916 SEK
$37,896,995 SEK
$38,654,935 SEK
Conservative estimate = 1% increase
Total Increase
$367,861 SEK
$375,218 SEK
$382,722 SEK
There is a total increase of $1,486,158 SEK in sales volume.
Technology Development, Design & Installation $6,575,791 SEK
$7,954,918 SEK
$9,095,467 SEK
Gorilla Glass, Reflektion technology & design. Projectors, screen film, and iPads.
Staff Training
$5,415 SEK
$1,836 SEK
$4,868 SEK
Store and assistant managers will undergo a total of 30 hours of training.
Promotional Activities
$3,844,401 SEK
$2,639,854 SEK
$935,170 SEK
Editorials, VOGUE,Glamour, ELLE, DailyMail. Social media outlets, website, newsletters.
Events
$2,441,479 SEK
$973,549 SEK
$765,314 SEK
"Happy Holidays" & NYE launch events. Launch events to proceed with following roll out.
Total Expenses
$12,867,086 SEK
$11,570,157 SEK
$24,286,830 SEK
$26,326,838 SEK
EXPENSES
$10,800,819.00 Reflects revenue with increase due to implementation of new technology into 3 flagships.
EARNINGS $27,854,116 SEK
Through the implementation, we have seen $3.567,286 SEK growth in sales & brand value.
conclusion
Conclusion After a complete industry and market analysis, we have developed a plan to successfully implement an innovative visual merchandising experience. Through the use of Gorilla glass, Screen Solutions International projection system and window film and Reflektion’s technology, H&M’s unique product offering will be digitally displayed for the first time. With the use of our Oxford Circus location comprised of 9 street-facing windows, we strive to drive volume in units and traffic while increasing revenue and giving our consumers an in-store experience like no other. The fact that we are in such a heavily infiltrated market with many fast-fashion competitors, we believe that the implementaion of this technology will give H&M the competitive advantage we’ve been searching for. Our initiative also has the potential to roll out this technology to all our flagship locations and later on to each store.
appendix
visitlondon.com
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