Once a high-flyer in the area of fast fashion, H&M has come under increasing pressure from China’s Shein and other retailers. Swedish company H&M sales growth has stalled in recent years, forcing the company to examine its strategy and product mix. The company’s revenue in 2022 is relatively unchanged from revenue six years ago. Not good news.
To counter this revenue decline, the global retailer is now expanding beyond its core fashion business and into new areas of home and beauty products. Although H&M has had to close some of its fashion stores, it is now adding new, stand-alone stores focused on beauty and home products.
There are now 32 H&M Home-branded stores that sell products from sofas to linens to kitchen products. The company has also added homeware sections to 399 of its regular stores as well as on the its website.
The company has also opened two flagship H&M Beauty-branded stores in Norway, selling products such as nail polish, body wash, makeup, and razors. Some of the products are also sold in regular H&M stores and online.
And, in yet another move, H&M has also added other brands to its stores and now offers more than 70 other brands. In addition, H&M has grown its own private-label brands, which have sold at double the rate of the overall company. Why the changes? According to H&M, “we see that customers spend more time with us if we offer a broader range of products.” Shall we check it out?
Group Activities and Discussion Questions:
- Discuss the four primary marketing strategies: Market penetration, market development, product development, and diversification.
- Poll students: Who has shopped at H&M? What have they purchased?
- Which strategy is H&M employing for the new stores? For the new product lines?
- Divide students into teams. Have each team select one of the four primary strategies for H&M and develop a marketing mix for it.
- View H&M website: https://www2.hm.com/en_us/index.html
- View H&M home products website: https://www2.hm.com/en_gb/home.html
- And H&M beauty products website: https://www2.hm.com/en_us/beauty.html
Source: Moss, T. (15 July 2023). H&M now wants to sell you makeup, sofas, and crocs. Wall Street Journal.