Tag Archives: retail

H&M Adds Home and Beauty Products and Stores   

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:

  1. Discuss the four primary marketing strategies: Market penetration, market development, product development, and diversification.
  2. Poll students: Who has shopped at H&M? What have they purchased?
  3. Which strategy is H&M employing for the new stores? For the new product lines?
  4. Divide students into teams. Have each team select one of the four primary strategies for H&M and develop a marketing mix for it.
  5. View H&M website: https://www2.hm.com/en_us/index.html
  6. View H&M home products website: https://www2.hm.com/en_gb/home.html
  7. 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.

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Online-Only Brands Move to Open Brick-and-mortar Stores

Physical retail weakened during the pandemic, and in some cases, it hasn’t come back. However, there are former online-only companies now reexamining their position on brick-and-mortar stores. Why the shift in strategy and distribution?

For example, in 2010 Warby Parker’s main strategy was to cut out the middleman and sell directly to consumers at a cheaper price than consumers could get in stores. Now they have a different story to tell – or sell.

By the end of 2012, Warby Parker had opened 200 stores in 36 states. These retail locations now account for 60% of the company’s total sales. That’s a big shift. It’s also very good news for commercial real estate companies. Vacancy rates at shopping centers declined to 5.6% in the first quarter of 2023.

Warby Parker isn’t the only digital native company that has embraced the shift. Companies such as Everlane (apparel), Casper (beds), Away (luggage), and Allbirds (athletic shoes) have also moved to include storefronts and retailers.

What’s pushing the move? One factor is the increasing cost of online advertising and acquiring new customers, making stores a viable option to finding new customers and adding revenue.

Which do you prefer – online or brick-and-mortar?

 Group Activities and Discussion Questions:

  1. Poll students: What has taken place in online and in-store shopping?
  2. Why do companies avoid opening physical stores?
  3. Why are some online companies now embracing physical stores?
  4. Divide students into teams. Have team find an example of online company that moved to physical stores. How did the company accomplish this?
  5. Now, have each team select a company that currently sells only online. Have the teams develop a marketing strategy for bringing that company into the physical store to sell its wares.

Source: King, K. (13 May 2023). Online-only startups adopt a bold new strategy: Opening actual shops. Wall Street Journal.

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Culture Wars Impact Retailers

The world can be a tricky place for marketers and brands these days. Cultural differences can cause a big backlash when too many consumers take offense at certain topics that are endorsed by brands. It is a difficult balance that sometimes tips over to the negative.

Recently companies including Walt Disney, Anheuser-Busch, and Target have faced opposition to their support of the gay and trans communities. For example, June is Gay Pride Month and while many consumers and companies (such as Target, Walmart, Kohl’s, and JC Penney) fully support the issue, others may take an opposite view.

Target’s controversy relates to clothing, décor, and other Pride items which it was selling in support of gay and trans-gender rights. While the company has embraced the topic and products for a number of years, this year it went sideways. In some stores customers knocked down displays, threatened store employees, and posted on social media in opposition to the products.  

In response to the controversy, Target moved its Pride products away from the front of the store and pulled several products from sale, all in response to fears about employee safety. The response to Target’s move was disappointment from many consumers and organizations that supported gay rights.

How should we deal with sensitive issues?

 Group Activities and Discussion Questions:

  1. This is a tricky topic for discussion, but one that bears examination by students.
  2. Discuss how companies can handle divisive topics.
  3. How should marketers balance messages to communities.
  4. Poll students: What are topics that are divisive and controversial? What examples have students seen?
  5. Show video about the issue at Target: https://youtu.be/AvfuoXga77Q
  6. Show Target’s website for Pride items: https://www.target.com/c/pride/-/N-5589f
  7. How should marketers address controversial topics?

Source: Nassauer, S. (25 May 2023). Target lands in culture-war crosshairs over pride month. Wall Street Journal; Reid, H. (31 May 2023). Target Pride backlash exposes ‘rainbow capitalism’ problem, designer says. Reuters New service.

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