Marketing Strategy and SWOT Analysis of H&M

Nowadays, with 4,743 stores in over 50 countries, H&M Group has spread to every corner of the globe – with 4,334 strictly H&M. Although it started in Sweden, 543 of its stores are in the USA. The company has a presence throughout the world, including in Cyprus, Macau, Tasmania, and Iceland. What makes H&M stand out so much is its ability to deliver a wide variety of clothes and accessories at a relatively low price. But are the low prices the only key ingredient towards the massive success of the brand? To find out, let’s have a close look at the marketing strategy and SWOT analysis of H&M.

First of all, let’s analyze what does H&M stand for?

Mission Statement

H&M’s mission statement is “to drive long-lasting positive change and improve living conditions by investing in people, communities, and innovative ideas.”

This statement explains the way that the brand presents its fashion and designs to the world through the transformation of the shopping experience and the improvement of lives.

All H&M stores focus on customers’ happiness and pleasure; that’s why the company is structured to maintain maximum flexibility and convenience for consumers when choosing a product.

Vision Statement

H&M vision statement is “to lead the change towards circular and renewable fashion while being a fair and equal company.”

The following statement indicates the firm’s dedication to prioritizing the trendiness of fashion while keeping it affordable. There are two keywords in the vision statement, which are leading the change and being fair and equal.

The first keyword indicates how the brand keeps a close eye on current trends and, in the meantime, promoting the development of new ones. The organization continually upgrades its variety of brands with what’s in demand.

Now it is time to dive into the branding strategies that H&M utilizes.

To fully understand how the company does its branding, let’s have a look at this Instagram post. 

Now that social media usage has become so widespread, H&M sells and displays its collection on Instagram too. In this Instagram post, we observe three different pieces of garment that are fashion trends: a basic white tee, blazer, and a purse iPhone case.

Their function is something that is commonly used every day. In the caption, H&M tries to connect people through music by commenting a song that involves “Watermelon,” just like the T-shirt it sells. The brand has no desire for luxury, pretense, or status symbols. Its goal is to connect and make people feel that they belong.

The three classic clothing pieces that are always in trend, the caption, and the price leaves us with only one conclusion. H&M belongs to Everyman Brand Archetype.

So, what do we know about the Everyman Brand Archetype?

Desire: Connecting with others and befriending. 

Aim: Trying to fit in, feeling that they belong.

Strategy: Getting on with or appeal to ordinary people, establishing solid core values and blending in.

Here are the messaging levels of the Everyman. 

Level One: Being lonely and alienating, experiencing an orphan-like feeling.
Level Two: Seeking affiliation, driven by the feeling of loneliness.
Level Three: Learning to connect and fit in, making friends, and accepting support.
Level Four: Becoming the humanitarian, realizing, and practicing for the dignity afforded to everyone despite their differences.

The Everyman Archetype is a promising identity for your brand if:

• The product/service is commonly used every day
• The product/service differentiates positively from a high-priced luxury brand. 
• The product/service makes people feel like they belong.
• The product/service has a moderate to low pricing. 

Brand Archetypes. Why we need them in practice?

Our communication strategy may have multiple messaging approaches. But there is some logic that unifies all these and it is called communication based on the archetypal branding. A company may have many messages, but they do not have something in common. For example “Do everything easily”, “Go ahead and be powerful” or Dig deeper and be experienced”.

These 3 quotes have different goals and bring different subconscious effects. One is about Being a Hero, another is about gaining more experience.

These are 2 different directions of messaging and the logics of Brand archetypes bring more uniqueness and clearness here. Just read the book “8 steps to a complete archetypal branding” and you will have more experience in communication based on archetypes.

Brand Archetypes. Why we need them in practice?

Being a leader in the industry also requires proper branding and messaging tactics. Here I want to mention the importance of the branding based on the archetypes. Nike says “Just do it”. What do they want to tell us? They just emphasize the inner heroes inside of us. Here it is, famous brands like Nike and their rivals Adidas have adopted branding tactics based on archetypes.

And it’s up to you to dive in and learn better the following directions. We have written a book “8 steps to a complete archetypal branding” that shows you clear ways to reach your target and conquer their hearts immediately.  Just try archetypal branding on any of the brands you are working on.

Now let’s do the SWOT analysis of H&M.

Strengths

High Customer Satisfaction – One of the strongest factors of H&M is its customer relationship management. H&M provides its customers with great design and quality products at extremely affordable prices. This leads to high levels of customer loyalty and satisfaction.

Global Presence – As already mentioned, H&M has stores in over 60 countries across the globe and continues to expand in the African and Asian markets in recent years. This widespread global presence will ensure stable growth with lower levels of risks.

Vast Spectrum of Products – What makes H&M so unique also includes its wide range of product offerings like accessories, apparel, shoes, cosmetics, home decor, etc.

Low Prices and Strong Value Proposition – H&M offers relatively affordable prices while maintaining a strong brand value for its pricing. This way, the company promises excellent quality and affordable prices providing its customers with the best shopping experience.

Fast Fashion – Another success factor for H&M is the short amount of time for product development. The time for new batches of products to reach the stores is limited to 12 weeks. This ensures the continuous visits of consumers, thus continually rising sales.

Weaknesses

Dependence on Third Party Suppliers – One of H&M’s weak spots are its dependence on third-party vendors for its products. H&M outsources its production to more than 800 suppliers; thereby, it has less control over the manufacturing process, despite its efforts to be always in contact with the vendors.

In this case, third-party vendors significantly affect the order commitment, which may hurt the brand image in case of poor customer experience.

Going After Trends – Based on the data mentioned above, H&M belongs to the Everyman brand archetype, meaning that the main goal is about fitting in. Instead of creating its own fashion trends, the company goes after trends that are set by the competitors. This leaves less room for differentiation.

Overstocking – Since the company manufactures a large number of products that have no guarantee for sale, there is a massive increase in unsold inventory. This is a result of weak demand forecasting.

Weak Online Presence – One of the significant drawbacks in the company is the inadequate utilization of the online sales channel. In this age of technology, it is absolutely crucial to ensure online growth, which H&M certainly lacks.

Opportunities

Celebrity Endorsements and Cooperation – What H&M can do to ensure profitability through effective application of celebrity endorsement marketing strategy to help promote products. Likewise, strategic cooperation with acclaimed designers will be efficient as well.

Lifestyle Improvements – Consumer purchasing power is increasing, and people are becoming more brand conscious; therefore, H&M can take advantage of the generated demand.

E-Commerce – As the world is moving towards a more digitalized future, brands, especially in the retail industry, involve substantially in e-commerce. To be able to serve the broad market, H&M has to use this platform to its full potential.

Threats

Currency Fluctuations – Since H&M stores operation in a vast number of countries, it is subject to currency fluctuations taking into consideration the volatile political situation in the market.

Intense Competition – The existing and emerging retail brands, mostly due to digitalization, put downward pressure on H&M’s sales. Therefore, it is vital for the brand to focus on differentiation to be able to survive in the market.

Increasing Costs in the Labor Force – With the rise of inflation, rising labor costs can seriously harm the profitability of the brand on behalf of the increasing cost of production.

Now it’s time to switch gears and discuss H&M’s segmentation strategy. 

To be able to accurately identify the target segment of H&M, let’s have a look at this H&M commercial.

The commercial features three nicely dressed young people who seem to be close friends. Based on the video, three friends are meeting up in the park while the commercial shows the whole process of the stroll they take towards the park.

The clothing that each of them is wearing is casual yet stylish. Based on their clothing choice, we can assume that being attractive is essential to them but not a priority. What they value is more about personality, and stylish clothing is more like an attribute to fit in.

Thus, the commercial focuses mostly on their gathering in front of the beautiful scenery of a lake. This expresses their interest in the outside world.

Apparently, this kind of behavior is typical to people who belong to the Conscious Progressives segment.

So, who are Conscious Progressives?

Lifestyle and Values

Conscious progressives are young adults who are open-minded and intellectual. Continuously seeking information and new impulses is something that helps them to get good use of in their lives. They are curious people who are always looking for something new and extraordinary. 

They are practical people that would not spend money on the unnecessary. Always prioritize honesty and are very down to earth.

Conscious Progressives are sometimes impulsive, but they prefer making mindful conclusions based on facts. An interesting insight for Conscious Progressives is that they do not want to be mainstream but, at the same time, not too far from mainstream. 

The importance they give to appearance differs from others. They consider a good appearance, intelligence, and personality of equal importance when defining who they are. Conscious Progressives are socially active people but give priority to deeper friendships.

They enjoy gathering with friends in bars or at home. These people are excellent entertainers and enthusiastic readers while they would always go for a football game with friends on the weekends

Attitude to Shopping and Advertising

According to the majority of Conscious Progressives, advertising should be relevant and intelligent to them. Ads only annoy a minority of them.

When shopping, they like to see beyond the packaging and always go with the slogan “Don’t judge a book by its cover.” Just like other people, they are emotional buyers, but what makes them stand out is about their prioritization for the functionality and image of the product to be in line with each other.

They tend to shop for fashion and trends, but most of the time, hide it under the “casual style.” They are also people that would never trade comfort over style.

Here are some interesting facts about Conscious Progressives.

• Conscious Progressives value education very strongly. Education and knowledge are their top privileges and according to them, success is driven by the brain rather than work

• These people are good debaters and enjoy intellectual talks about political and social issues. Before forming an opinion, they love to examine the problem from every angle possible.

• For Conscious Progressives, it is essential to be attractive to the opposite sex. They are always seeking for a partner that shares similar interests and intellect or is continually trying to improve.

• Their primary media consumption is informational. The internet is a crucial aspect for them since it is something that enhances their worldview.

16 Personalities (why do you need them in your business?)

Conscious Progressives are just 1 of 16 Personalities that you may meet during your daily business and marketing activities. Behaviors of these segments are described in detail in the book, the study of which is very important so that we can have the right ideas about their

1 / Motivations

2 / Fears

3 / Desires

4 / Preferred ways of standing out

The answers to these insights will give you an opportunity to find your ideal customer.

All these types of clients are included in the book called “16 Personalities”, which will open a new Marketing world for you. This book will give you a key to the heart of your dream client. By recognizing all 16 Personalities, you will easily find a target customer that matches your brand.

So, I hope this post gave you some insights and answered some of your questions regarding the marketing strategy, branding, and segmentation that H&M has been using to keep its position in the retail market. For more similar posts, you can check out the main page of our website.