Revamping the Fast-Fashion Game
In the cutthroat world of fast fashion, H&M’s CEO Daniel Erver knows that competing solely on price is no longer a viable strategy. To regain market share from rivals like Zara, the Swedish retailer must focus on creating trendy, high-quality clothing that offers customers real value for their money.
Raising the Bar
Erver, who has been at the helm for a year, has already made significant investments in marketing to boost the H&M brand’s appeal. He’s also accelerated product development to keep up with the rapidly changing fashion landscape. However, he acknowledges that there’s still much work to be done. “We need to step up and raise the bar,” Erver emphasized in a recent interview.
The Rise of Online Retailers
The emergence of online-only retailers like Shein has disrupted the traditional fast-fashion model. With their ultra-low prices, they’ve forced established players like H&M and Zara to rethink their strategies. To stay ahead, H&M is betting big on social media influencers and collaborations with pop stars like Charli XCX to reach fashion-conscious young women.
Winning Over the Young Generation
Erver believes that winning over the young generation of fashion enthusiasts is crucial for H&M’s future success. “The fashion-interested female customer, especially the young generation, will shape the industry for years to come,” he said. By investing in social media and refurbishing stores in key cities, H&M aims to attract more customers and create a memorable shopping experience.
Premium Expansion
H&M’s premium brand, Arket, is set to open its first stores in Austria, Norway, Greece, and Ireland this year. These stores will feature cafés, designed to encourage customers to linger and enjoy the shopping experience. While Erver is not satisfied with the company’s overall performance, he’s encouraged by the higher operating profit margin in the fourth quarter, which he attributes to a stronger product mix.
Streamlining the Supply Chain
H&M’s chief financial officer revealed that the company is working to shorten its supply chain and speed up its design process. This could potentially cut the time between product idea and arrival in-store by as much as 50%. With these changes, H&M is poised to become more agile and responsive to changing fashion trends.
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