Professional Documents
Culture Documents
AM Assign. 2
AM Assign. 2
C
● Introduction
● Brand Board
O
● Target Market
● Competitor Analysis
N 02 PRODUCT ASSORTMENT
T
● Product Types & Price Points
● Pricing Strategies
E
N 03 SALES
● Annual Revenue
S 04 POLICIES
● Vendor Selection Criteria
● CSR policies
Source : H&M
01
THE BRAND
I
N
T
R
O
D
U Source : istock Source : fashionunited
I ● Its focus is fast-fashion clothing for men, women, teenagers, and children.
O ● As of November 2019, H&M operates in 74 countries with over 5,000 stores under the various
N
company brands, with 126,000 full-time equivalent positions.
APPAREL MERCHANDISING 01 - THE BRAND
B
BRAND VALUES:
R ● Functionality and sustainability.
A ● Consumer focused
N
D SWOT ANALYSIS:
● S - Affordable pricing, Strategic store locations, New
design in market every two weeks
B ● W - Affordable pricing affects quality, Dependence on
O third party suppliers
T DEMOGRAPHIC
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● Lifestyle : Working class, impulse buyers, graduated school
● Geographic location: Urban cities
E ● Segmented by class- from middle class to high society by
T rendering low-cost price products to extravagant products.
M PSYCHOGRAPHIC
R
● The ones looking for outfits ready to sell just off the runway.
K BEHAVIOURAL ANALYSIS
E
Source : H&M
A typical H&M customer visits the store 17 times a year as they see
T fashion products as disposable with a maximum 3-4 weeks sell-by period.
APPAREL MERCHANDISING 01 - THE BRAND
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O
M
P
● Ownership of its supply-chain ● Uniqlo's distribution strategy ● GAP uses less water in the
allows more rapid product has centered on the timing of manufacturing of jeans. Its
E turnover; it can design a its products' introductions brand Athleta uses
T product and have it sold in into stores, with new products approximately 80% of the
I
stores a month later. created as a function not of sustainable material.
● While its competitors offer quantity, but of demand. ● It uses just-in-time for
T 2,000 to 4,000 articles of ● Focused on providing manufacturing, a third of all
O clothing, Zara's offers over affordable basics with stock being manufactured in a
R
10,000 pieces produced per innovative fabric technology, quarter as opposed to nine
year. not many fast-fashion pieces months, it also uses streamlined
S or runway knockoffs. inventory system.
Other competitors : ASOS, Macy’s, Urban Outfitters, Forever 21, Benetton Group, Mango
02
PRODUCT
ASSORTMENT
APPAREL MERCHANDISING 02 - PRODUCT ASSORTMENT
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R
O
Product Types
D
U
C
T
T wear
Bodysuits- Rs 799- Rs 7,999
Y Beauty
P
Coats/Trench coats/Waistcoats-
Rs 2,699- Rs 13,499
T wear
Knitwear- Rs 1,299- Rs 9,999
P
R
O
D
U Clothing- Rs 299- Rs 2,999
Y
P
E
S
APPAREL MERCHANDISING 02 - PRODUCT ASSORTMENT
P
R
O
D Clothing- Rs 299- Rs 3,999
P
E
S
APPAREL MERCHANDISING 02 - PRODUCT ASSORTMENT
P
R
O Trousers and Leggings- Rs 699- Rs 2,699
T
Jumpsuits & Rompers- Rs 1,299- Rs 2,299
E
S
APPAREL MERCHANDISING 02 - PRODUCT ASSORTMENT
T ● Discount pricing: The company also offers various discounts and schemes on their core and
R fresh stocks.
A
T ● Charm pricing: H&M generally has its products priced at prices ending in 9, 99 or 95.
E
G ● Prices lower than competitors: The company has proved relentless in its zeal of cutting costs
IE
at every possible corner and so their average selling prices are much lower than their
competitors.
S
● Reducing intermediaries: The company buys directly from the supplier in bulk amount.
03
SALES
APPAREL MERCHANDISING 03 - SALES
● After a small loss in the beginning of the year due to the pandemic, the company returned to profit in
the second quarter of 2021.
R
● The improvement in earnings was driven by increased full-price sales and by cost reductions
● The H&M group’s online sales accounted for 32 percent of total sales.
E ● The H&M group’s net sales and profit after financial items amounted to SEK 198,967 m (187,031) and
E
N
U
E
Source : hmgroup.com
APPAREL MERCHANDISING 03 - SALES
W
The roll-out of H&M online continued during the year to
Chile, Indonesia, the Philippines, Malaysia and Singapore.
T ● H&M will launch in six new markets in 2022
V
E
NUMBERS
N
● Business with over 602 commercial product suppliers who manufacture products for H&M’s
D
brands in over 1519 tier one factories in Europe, Asia and Africa.
O
● Eight years is the global average length of their relationship with a supplier since 2006*, but
R some have been doing business with them for over 25 years.
● Operate 16 local production offices, employing over 2,000 colleagues who work daily with our
S suppliers.
E
● We operate 16 local production offices, employing over 2,000 colleagues who work daily with
our suppliers.
L
E TRANSPARENCY
C Supplier list shares the details of their tier one suppliers and their manufacturing and processing
T factories accounting for 100% of the products they sell across our brands.
I
O
N
APPAREL MERCHANDISING 04 - POLICIES
V
E
They work with suppliers to move beyond compliance and towards continuously improving
N
environmental and social performance.
D
O
R
S
E
L
E
C
T
I They focus on building long-term partnerships with suppliers who share their vision for a more
O sustainable industry.
N
APPAREL MERCHANDISING 04 - POLICIES
V
E DASHBOARD
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D
O
R
S
E
L
E
C
T
I
O
N
APPAREL MERCHANDISING 04 - POLICIES
V
E MANUFACTURING FACTORIES
N All of them are covered by their Sustainable Impact Partnership Programme.
D
O Each of these factories report to them using the industry standard Higg Index Facility Environmental
R Module, and are now rolling out the most recent industry standard called Social and Labor
Convergence Program (SLCP).
S PROCESSING FACTORIES AND FABRIC AND YARN MILLS (Second tier suppliers)
E Suppliers can outsource specific tasks to so called processing factories. This is considered
L subcontracting and must be announced to H&M. All processing factories are approved by their team.
E
C They approach the processing factory in the same way as any other factory making products for and
T include them in our SIPP.
I
O
N
APPAREL MERCHANDISING 04 - POLICIES
V
E SIPP (Sustainable Impact Partnership Program)
N work closely with their business partners around the world to make sure they produce affordable,
D quality products that meet their high environmental and social standards.
O
Use SIPP to assess levels of compliance with the Sustainability Commitment and to measure their
R suppliers’ performance over time. The main components of SIPP are: minimum requirements
verification, self-assessment, validation and capacity building.
S
SELF-ASSESSMENT
E
L Involves suppliers reporting annual performance data and management system indicators, which
helps them understand their readiness and resilience. The management system indicators generate a
E score which is used in their supplier evaluation scorecard, where sustainability carries the same weight
C as other parameters.
T
I
Use the Sustainable Apparel Coalition’s (SAC) Higg Facility Modules as the basis of our performance
and management system assessment component of SIPP.
O
N
APPAREL MERCHANDISING 04 - POLICIES
C
S ● H&M group aims at creating a circular and climate positive fashion industry, while being fair
R and equal.
● The group aims to create a positive correlation between profitable growth and a greater
P positive impact on customers, colleagues, business partners, their employees and other
LI
C Respecting and advancing human rights Inclusion and diversity
IE
S Fair jobs in their own operations Fair jobs in the production supply chain
APPAREL MERCHANDISING 04 - POLICIES
C
S
RESPECTING AND ADVANCING HUMAN RIGHTS
R
● H&M group bases their approach on the UN Guiding Principles on Business and Human Rights and
P
communicate their commitment via their Human Rights Policy.
● They work with the Ethical Trading Initiative and Shift to progress their approach to human rights. They
O also partner with local human rights focused organisations — Better Work, the International Organization
L for Migration, the Mekong Club and the Myanmar Centre for Responsible Business.
I ● H&M launched the Role Models campaign to spotlight the voices of children making the world a better
C
place, showing age is no barrier to changing the world. The campaign engaged approximately 34,000
children, as well as raising SEK 2 million for UNICEF through sales of t-shirts featuring inspirational quotes
IE from the Role Models.
S
APPAREL MERCHANDISING 04 - POLICIES
C
S
R INCLUSION AND DIVERSITY
● To make their supply chain fair and inclusive, H&M group focuses on Internal Diversity and Equality,
P Promoting Diversity and Equality, Inclusion and Transparency. Their approach is formed by their Human
L
● The group has newly formed Inclusion & Diversity councils and peer committees to progress its new diversity
targets. Their United States (US) market is developing colleague resource groups (CRGs), reflecting a
I specific dimension of diversity who help shape the I&D strategy locally.
C ● By 2025, the group aims for their workplaces to be more inclusive and diverse, to leverage their diversity for
IE better business, and to use their business to advance inclusion in their communities.
S
APPAREL MERCHANDISING 04 - POLICIES
C
S
R FAIR JOBS IN THEIR OWN OPERATIONS
● H&M group focuses on health, safety and wellbeing, professional and personal development, constructive
P employee relations and engagement and providing fair compensation and benefits.
O ● The group engaged with more than 2,000 of their colleagues to understand their view towards the
L accelerated flexible and digital working trends post Covid, to develop their new ‘H&M Group at Work’
I
model.
● They are developing their Global Employment Standards, strengthening their Global Grievance Policy and
C aiming to establish a learning experience platform (LXP) to provide easy access to personalised learning
IE experiences.
S
APPAREL MERCHANDISING 04 - POLICIES
C
S
R FAIR JOBS IN THE PRODUCTION CHAIN SUPPLY
● The brand has been supporting their suppliers throughout Covid and in 2021, engaged in ‘Call to Action’
P activities to support worker access to emergency funds, wage subsidies, severance pay and identification
L
● The group is a member of the Industry Summit, a 15-brand collaboration that shares common approaches
to topics such as supplier audits, joint remediation and gender equality.
I ● The group aims at training their teams and NMC members on gender-based violence and prevention of
C sexual harassment alongside reviewing their policies and guidelines to ensure the most effective procedures
S
APPAREL MERCHANDISING 04 - POLICIES
● https://bstrategyhub.com/hm-swot-analysis/
● https://www.investopedia.com/articles/markets/120215/hm-vs-zar
a-vs-uniqlo-comparing-business-models.asp
● https://en.wikipedia.org/wiki/H%26M
REFERENCES
● https://hmgroup.com/
● https://hmgroup.com/sustainability/standards-and-policies/sustai
nable-impact-partnership-program/
● https://hmgroup.com/wp-content/uploads/2022/03/HM-Group-S
ustainability-Disclosure-2021.pdf
● https://www.marketing91.com/marketing-mix-hm/