MK5011 Retail Marketing Report: H&M In-Store Experience Analysis

This report provides an in-depth analysis of H&M's retail marketing strategies, with a specific focus on its in-store customer experience. The study begins with an executive summary highlighting the importance of customer engagement in the fast-paced fashion retail market. The report then explores the background and context of H&M, followed by a review of relevant literature on retail experiences and consumer behavior. The core of the analysis examines H&M's in-store strategies, including its store concepts, use of technology, and efforts to enhance the shopping environment. The report concludes with a summary of key findings and offers recommendations for H&M to further improve its in-store customer experience, such as leveraging technologies like AR and smart shopping carts to gain a competitive edge in the fashion retail industry. The report aims to provide valuable insights into how H&M can maintain and improve its in-store experience to foster customer loyalty and drive sales.

2/27/2020
Running Head: MARKETING 0
Retail Marketing

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Executive Summary
In this fast-moving and briskly changing fashion retail market, it is very vital for the sellers to
discover new ways for engage with the customers. This report mainly emphasis on the
concept of retail stores and also states H&M in-store retail experience showing it as a key
differentiator for the brand in the fashion retail industry. At last, necessary suggestions are
also carried forwards to the management team of H&M in order to raise their in-store
customer experience.

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Contents
Introduction to the Report......................................................................................................3
The Background and Context.................................................................................................3
Review of Literature................................................................................................................4
In-store experience of H&M...................................................................................................6
Summary and Recommendations...........................................................................................8
References.................................................................................................................................9

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Introduction to the Report
In today’s every changing world of technology innovation and consumer buying behaviours,
it has become more significant for the retailers to gain understanding about the consumer
experience and discover ways to exceed their expectations. Exceptional consumer experience
also requires transparency and internal benchmarking so as to help retailers to gain necessary
insights about the customer feedback and use certain metrics against operational data and
ultimately identify the service gaps (Bhattacharya and David, 2018).
Retail customer experience is also an exciting arena that is advancing very quickly and
presenting various challenges to the manager to be competitive while adopting a customer-
centric position. In this report, the case is selected about H&M to identify its in-store
customer experience and draw significant review of literature on the concept of retail
experience including the rising expectations of the shoppers. In last, various suggestions are
also been stated to the H&M management team that will help the brand to enhance the
shopping and retail experience in relation with the customer.
The Background and Context
Hennes & Mauritz (H&M) is an arrangement is driven and quick overall enterprise that offers
well-curated offerings at all times through its eight clearly defined brands, each having its
unique identity. Currently, H&M has nearly 5076 number of stores globally together with
around 1, 20, 200 employees. Gartner in 2018 also ranked H&K at 4th rank in relation to best
performing organisation and supply chain leader in Europe (gartner.com, 2018). The
company business model is well linked to offering quality and fashion at the finest price and
the company believes in a long term approach under a solid foundation sharing the customers
to give the best value for money and encourage them make sustainable choices. A strong

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digital presence together with the well maintained stores helps H&M to create proximity to
consumers around the globe that is unique to H&M. It can also be said that retailers exist in a
highly saturated marketplace and there are few things and ways through which they can
differentiate the brands from their competitors and from that one is the retail customer
shopping and store experience.
Review of Literature
There is an increasing saturation in the fashion retail market and retailers required to do
whatever they can to gain new customers while retaining the existing ones, however, this
requires them to form a comprehensive knowledge of the rational likes and dislikes of
consumers which ultimately transformed into the reliable shopping experience. Considering
the future, these fashion retailers can also anticipate customer expectations to develop
strategies near innovation together with their favourite brands in the same industry. In
addition, the store and purchasing experience can also be enhanced to attain competitive edge
in the particular market segment.
In the fashion retail marketplace, there is a strong vision to the businesses with new retailing
approaches and that stimulate to associate with the key consumer groups. According to Pal
and Gander (2018), there is now better clarity near the offerings, identity of the customer
segment and the value proposition. There is also a constant evolution of new retail concepts
with the time and this constituent a higher capability to experimentation going outside the
functional benefits to present emotive and self-expressive benefits. Though, a viable retail
concept also needs to scale as it can involve in assimilating to a business with greater
complexity and also in various geographies. All such efforts will automatically lead to a
positive word of mouth marketing enabling from loyal customers group and ultimately,
benefit the brands to receive new customers through store recommendations.

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According to Jiang et al (2018), brands cannot improve and embrace customer experience for
a longer time in absence of evaluating and understanding it. In addition, there is an increasing
deamand and vocal and different groups of consumers and together with technological
advancement, brands can also use different customizations tools (like sensors fitted in store)
help them to offer desired assistance and experience to the shoppers. Kesari and Atulkar
(2016) also stated that there is certain difference in the purchasing patterns and retail
customization intends to serve each shoppers relying on their behaviour and requirements and
hence make the customer feels more relaxed. Though, it is not always the reality as various
fashion retailers and stores fail at customization and show incapability to being the key driver
of their business success.
It is also true that experience also drives customer value and this called to be a cumulative
effect of all their contacts and consequently determine the value. The customers' experiences
in big retail stops are more than simple transactions and this is the reasons that big brands are
playing with huge data to understand and gain knowledge of whole consumer journey from
the moment they initiate to shop, express feedback, or communicate at the counter for
assistance (Piotrowicz and Cuthbertson, 2014). In addition, the significance of data is
exceptional and various retail firms recognise consumer analytics as a way to revolutionize
the process a retailer operates. At the times where affirmative consumer experience is
important to many businesses, the op retailers and brands are the ones who use the data to
reformulate processes and present well customer experience.
Today, customer also search for diverse experience depend on both the preferences of
individual and their shopping form (Terblanche, 2018). More specifically, when a customer
goes to supermarket to purchase grocery product, he/she find the experience quick and easy
and on the other hand, of he/she goes to purchase accessories or clothes in the retail store,
there is need of store executive to attend the and appreciate their needs with offering of expert

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suggestions. Hence, considering the product or services what brand is offering, it can be
result in dissimilar experiences and this force retailers to surely provide them with the needful
experience in relation with the rational desire and requirements. Furthermore, it also requires
firm to customize such experiences on the base what they play in the retail environment.
In-store experience of H&M
As stated above, H&M has nearly 5076 number of stores globally contributed to the overall
success of the company. Fast fashion is the secret to H&M success as the retailer attain its
objectives with having a greater stock and range turnover and by continuously resupplying
the pipeline of the products with the modern fashion developments. The company has
capitalised in various new in-store ideas like trialing certain external brands, a florist shop-in-
shop and also a new café concept known as its Pleat (hm.com, 2019). Hence, with using new
store concepts, technologies and activities, H&M expects to build a flatter experience,
making it simpler for employees and consumers to steer in the stores. In addition, the
company constantly pointed out exciting tests in chosen stores so as to implement digital
aspects to end “the gap between offline and online”. In other words, the brand is integrating
their physical stores and digital channels to offers the customer effective and reliable
shopping experience (unique proximity to consumers).
H&M consider in-store experience as the priority and during 2018, the brand test new
product experience with updated interior concepts enabling a higher personal and welcoming
environment where a curated assortment aids in forming a more airy feel. Other test includes
the expansion of Collect & Click and the introduction of the In-Store mode, where consumers
in choosen marketplace can now use the H&M application as digital in-store buying tool to
search what’s offered in their favourite store and nearby ones.

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The H&M stores have a zero tolerance on “garment litter” unlike the other stores who suffer
from this aspect. The company motivate its stores' employees to orderly while stirring about
the store and design displays that are simpler to maintain and manage (Roberts, 2017). This
helps the store, there will be reduction in the prospect of products being scattered about the
floor. H&M also embrace the effortless display way in relation with ‘hanger test’ whereby
products are hung in rails with sufficient rooms for consumers to assess, replace and retrieve
a product. It helps customers by making it simpler to confiscate a product without it failing
all above the floor. It is exciting for the brand to look consumer elsewhere, who on looking a
clothing tower just a distance. The in-store experience of H&M is also inspiring and friction-
free like the brand brings out the proficiency to its brick-and-mortar stores via RFID
technology as when they are in the store, consumers can discover ideas and recommendations
for merchandise chosen for them by algorithms.
In addition, the brand is also putting efforts on greater integration amid the offline and online
buying experience like with finding a store feature, shoppers can identify the product they
discovered online. As well, through Buy and Scan, consumers can scan an in-store label so as
to ensure that where the product is presented at other place or online. Since 2018, H&M also
on track using big-data processing algorithm to inspect store receipts, loyalty card info and
returns (Chaudhuri, 2018). This enabled H&M to have better handle on demand and supply
with allowing the retailers to localise assortment for each of its stores. Taking example of
H&M store in Ostermalm, AI and big data can effective be seen at the store, an upper-class
neighbourhood in Sweden. Hence, it can be seen that H&M has really taken hard steps to
improve and enhance the consumer experience in the stores and this will surely accelerate its
success as well as help the brand to attain long term loyalty from the diverse context of
customers.

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Summary and Recommendations
Considering all, H&M has made necessary paces to bring great customer experience with
offering wide selections of products in the store and also with integrating disruptive
technologies. In the global fashion retail industry, H&M is a leading retailer whose products
are inspired by styles and the stores offer a mix of clothing, books, records and housewares.
For H&M, developing a high in-store experience for the customer is becoming a focal point
and the brand gravitate this approach long time back. From future perspectives, H&M needs
to nurture a greater in-store experience with motivating and giving necessary training to
employees. It will help H&M to showcase a sense of community together with discovering
ways for further enhancement in the in-store experience.
H&M can also adopt latest disruptive tools such as AR and smart mirrors allowing customer
to test various outfits without having to change their clothes. Online e-commerce giant
Amazon also filed a patent for an AR mirror that allows customers to test clothes in exotic
locations, proving greater convenience of their own home. With this technology, H&M can
capitalize on convenience and comfort, which was known to be major priorities for modern
buyers and shoppers. This will also help H&M to make their store experience as the key
brand differentiator in the global fashion retailers industry. Smart shopping carts in the stores
can be another feature where the brand can tap upon as it follows the customers around the
store and therefore, their hands can be free, making it easier for them to look after their
children and other personal tasks. Such innovative technologies will help H&M to gain
competitive edge in the industry. Furthermore, H&M also needs to pay close emphasis on
retail customer experience as it will continue to change and gets more personalised and
advanced in the next few years.

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References
Bhattacharya, A. and David, D.A. (2018) An empirical assessment of the operational
performance through internal benchmarking: a case of a global logistics firm. Production
Planning & Control, 29(7), pp.614-631.
Chaudhuri, S. (2018) H&M Pivots to Big Data to Spot Next Big Fast-Fashion Trend
[ONLINE] Available from: https://www.wsj.com/articles/h-m-pivots-to-big-data-to-spot-
next-big-fast-fashion-trends-1525694400 [Accessed 01/03/2020].
gartner.com. (2018) Newsroom [ONLINE] Available from:
https://www.gartner.com/en/newsroom/press-releases/2018-05-17-gartner-announces-
rankings-of-the-2018-supply-chain-top-25 [Accessed 01/03/2020].
hm.com. (2019) H&M WRAPS UP A YEAR OF STORE TESTS AND DIGITAL
DEVELOPMENTS [ONLINE] Available from: https://about.hm.com/news/general-news-
2019/h-m-wraps-up-a-year-of-store-tests-and-digital-developments-.html [Accessed
01/03/2020].
Jiang, K., Luk, S.T.K. and Cardinali, S. (2018) The role of pre-consumption experience in
perceived value of retailer brands: Consumers' experience from emerging markets. Journal of
Business Research, 86(1), pp.374-385.
Kesari, B. and Atulkar, S. (2016) Satisfaction of mall shoppers: A study on perceived
utilitarian and hedonic shopping values. Journal of Retailing and Consumer services, 31(1),
pp.22-31.
Pal, R. and Gander, J. (2018) Modelling environmental value: An examination of sustainable
business models within the fashion industry. Journal of Cleaner Production, 184(1), pp.251-
263.

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Piotrowicz, W. and Cuthbertson, R. (2014) Introduction to the special issue information
technology in retail: Toward omnichannel retailing. International Journal of Electronic
Commerce, 18(4), pp.5-16.
Roberts, P. (2017) 5 reasons why retailers should look to H&M for customer experience tips
[ONLINE] Available from: https://medium.com/@paul_7418/4-reasons-why-retailers-
should-look-to-h-m-for-customer-experience-tips-63a06bd48bc7 [Accessed 01/03/2020].
Terblanche, N.S. (2018) Revisiting the supermarket in-store customer shopping
experience. Journal of Retailing and Consumer Services, 40(1), pp.48-59.