H & M a Multichannel Report

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At a glance:

This report looks at the key value propositions of the website http://www.hm.com and how it fares against its competitors in its online multichannel strategy. The report recommends the following changes to keep the costs down and serve its customers better.

Provide online retailing to countries where the option is unavailable, especially US. Ask for gender of the customer during profile creation so that they have targeted advertisements about specific products in the home page. Currently most of the advertisements in website are for feminine products. Use centralised database management system to reduce costs and to obtain a holistic view about customer behaviour in each regions. Integrate a search function in the website so that the customers can easily find the unique products they are looking for. Use the cookies stored in a visitor’s computer effectively so that they can be targeted with specific advertisements which they might find useful.

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1. Introduction:
Hennes & Mauritz was established in 1968 with the acquisition of Mauritz Widfross, the hunting and men’s clothing chain of stores, by Hennes. Currently the group’s product portfolio includes men’s, women’s, children’s and teen’s clothing, cosmetics and home accessories. The company has more than 2700 stores in 48 markets and a strong employee base of approximately 94000 (MarketLine Case Study, 2012). H&M Group also includes independent brands i.e. COS, Cheap Monday, Monki and Weekday. For the sake of simplicity, this report will look only at the brand H&M. The target customers of H&M are mostly price sensitive and belong to the age bracket 15-35 years. The key competitors with whom H&M shares these customers are Primark, Zara, Next and Benetton. In 2011, the online retail sector in UK has grown by 16% and reached a value of £ 28.7 Bn. A report from MarketLine predicts that by 2016 this value would increase to £ 71.14 Bn. Taking into account the high competition, low switching costs for consumers and potential growth rate in this sector, this report analyses the website www.hm.com, evaluating its effectiveness in multichannel retail strategy and comparing it with its competitors. To understand customers who visit the website, we first analyse its traffic data. 2. The Website Traffic Analysis

The website attracts, on an average, 800,000 unique visitors every month (Alexa.com, 2012). When compared to its closest competitor (ZARA), H&M has a massive advantage in this area (see appendix). However it is to be noted that approximately 17% of these unique visitors are bounces i.e. they visit only the first page. On an average a visitor browses 7.9 pages of this website (Compete.com, 2012). Since not all countries, such as US, Saudi Arabia etc., have the option of online shopping, the percentage of customers who buy the products online is very low. The global marketing sales figures show that only 3% of the total sales are from the website. These figures show the potential of the website and why it is necessary to expand the online retailing options to the countries where it is unavailable.

Source: www.alexa.com (2012)

The figure above gives an impression of the customers accessing H&M website. It can be seen that as Germany is H&M’s largest market it has the most number of visitors. Unlike Germany, United States, which has second largest percentage of visitors, does not have online retailing. Though H&M was supposed to launch internet retailing in US by winter 2012, due to few technical difficulties it has postponed the launch to summer 2013 (Financial Times, 2012). Based on these facts, this report suggests that it is imperative that H&M does not delay the launch any further. The figure analyses how well H&M’s website address the needs of its visitors. As the company is targeting a segment with an age bracket of 15-35, this report is able to confirm that the website has rightly identified...
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