H&M Business Model - Something That Caters to Everyone

Fashion itself is a statement, and you put forth one when you promote a brand by wearing it. Adaptation of fashion sense has become crucial these days. Be it presenting yourself as a corporate bug, someone who is into rap culture, or simply going out on a date, the clothes you choose define you. 

In a way, you are perceived by what you wear. Worry not, brands like Hennes & Mauritz, also known as H&M are here to save the day. Although the company was established way back in the day, it has been keeping up with the fashion and trends changing with generations. 

The company has achieved a status around the globe in the fashion industry. It is not just clothes that the Swedish-origin company serves but also the related accessories. Be it the millennials who have an immense difference in taste, or the newly welcomed Gen Zs, H&M has got something for everyone. 

H&M - About

• When Was H&M Founded and by Whom?
• Headquarter and Operations
• Target Audience
• Key Products

Business Model of H&M
USP of H&M
How Does H&M Make Money?

• Sales
• Collaborations
• Other Initiatives

H&M SWOT Analysis

• Strengths
• Weaknesses
• Opportunities
• Threats

H&M - About

When Was H&M Founded and by Whom?

The journey of this fashion brand began back in 1947, when Erling Persson opened his first store in Västerås, Sweden. This was a store called Hennes meaning ‘Hers’ in Swedsih and only sold women’s clothing. Later in 1964, Persson opened its first store outside Sweden and was situated in Norway. 

Four years down the line, Erling acquired the hunting apparel retailer Mauritz Widforss. This was in Stockholm, with which the company’s name was changed to what it is today, with the sale of men's and children's clothing. 

Headquarter and Operations

The current headquarters is located in Stockholm itself, while also covering 75 marketplaces around the globe. The company at present has 4,801 physical stores with a grand online presence too.  

Target Audience

With the interest in fast fashion, the target audience that H&M serves are the customers who usually belong to the young generation. Meaning, the brand aims at millennials as well as caters to the needs of Generation Z. This includes both men and women with a main focus on women. 

Key Products

Don't get confused with the product category that is covered by H&M. Just because it is a fashion brand doesn't mean it has got only shirts or pants, your wardrobe can be filled with variations in style. 

From shirts & blouses, you can get trousers, dresses, jackets as well coats. With that, the brand has a range of jeans, shoes, sweatshirts, and hoodies. Most importantly, H&M even sells beachwear as well as swimwear. H&M is also famous for its fashion accessories such as purses, necklaces, and even scarves. 

Business Model of H&M

Different brands have different business strategies but usually stick to one or two. H&M has several models that cover a variety of segments. 

Here is a brief understanding of how H&M's business model works. 

From customers looking for fashionable clothing at an affordable price, to the ones who are Eco-conscious customers, H&M covers everyone’s needs. The brand has a range of clothing for those who are fashion enthusiasts, with exclusive designs and unique collections. 

Meanwhile, the brand also ensures that fashion is accessible to everyone and offers the latest trends at an affordable price. 

The multinational fashion brand does not only think of its customers but also of the retailers. H&M collaborates with various stores and businesses. It even supports global retailers helping them to open franchised stores. This has gained H&M a strong status in the fashion industry and built a strong bond with their go-to partners. 

As a brand, H&M represents a brand that values environmental ethics, luxury in these days of rising costs, and fashion that fits within everyone's budget and taste. 

USP of H&M

Hennes & Mauritz being a fashion brand has covered what is important for its audience as well as has garnered a huge market. The Unique Selling Point of H&M is simple and truly defines its idea of branding. 

H&M aims at fashion for all. Meaning affordable fashion and also a trendy collaboration of chic, stylish clothes, with a twist of classic look. 

The brand has got everything for everyone when it comes to fashion. For men, women as well as teenagers, you can choose from a vibrant collection. It even promotes its clothing and accessories for groups of people with purchasing power from high to medium. 

Talking more about its USP, H&M offers a great combination of high-class brands, and classic fashion all at an affordable price. 

H&M Marketing Strategy - How H&M became the second largest Global Clothing Retailer

H&M is a Swedish clothing retail company known for its fast fashion clothes. Lets deep dive to understand its marketing strategies that made its second largest clothing Retailer.

StartupTalkyAbinaya Arangarajan

How Does H&M Make Money?

It's a huge franchise and it belongs to the fashion industry, there are certainly several ways to earn. And yes, H&M is one of the most buzzing brands. But talking more precisely, about H&M’s ways to earn money, we've made a perfect review for you.

Sales

Of course, sales are the foremost important niche to generate money for H&M. Clothing, accessories, and its home decor collection are the most important products that generate sales for H&M. These things are sold from both its online as well as physical store, so yes, the stores count too.

The sales made in its stores, online and physical both, make up most of its revenue. Then comes the franchise part. 

H&M isn't called multinational for nothing. The fashion brand partners with franchisees worldwide and has opened stores in several nations. With this idea, H&M has covered a huge market and has been earning money through its sale of franchises. 

The brand collects fees from its franchises and in return, helps them with restocking the clothing products and other goods to sell. 

Speaking of sales, H&M also sells its products to other retailers. This is how the brand expands its wings and reaches newer markets without even opening a store. 

Collaborations

H&M is known for collaborating with famous designers and celebrities. These are the special edition collections that create hype amongst its customer base and drag people to the stores. This is another strategy that increases the sales of H&M. 

Other Initiatives

H&M is not the only brand that generates income. It even has other brands that cater to different tastes and markets. These brands include COS, Monki, and Weekday. 

Similarly, the brand at its present state is exploring new and innovative ways to make money. It is trying to have a sustainable approach as much as possible. H&M at present is trying to present itself as a brand that has adapted to sustainable fabrics and caters to audiences that have the same taste. 

H&M SWOT Analysis

Strengths

H&M has adapted fast fashion to its core. Meaning that it can turn the latest trends into affordable clothing in no time. It has also got a huge global presence, with its stores available in big cities and small towns. Similarly, the brand has a range of collections in the fashion industry. Be it clothes, accessories, or home decor, it has something for each of its customers. 

The most recent one is its sustainable practice, with which it is trying to be more environmentally friendly. This has worked best while attracting customers. 

Weaknesses

The first and most harsh would be the trend that could affect the brand if not taken care of. If at all, H&M misses out on what's the trend that is attracting customers, this could heavily affect its sales. 

Next would be the environmental lookout. Although the brand is doing its best to promote sustainable clothing, it is still facing a lot of criticism when it comes to the production method. Also, the dependency on its supply chain would affect its customer base. From production to delivery, everything has to be in process without any obstacles. 

Opportunities

Although the brand has covered a huge market, it still has a chance to grow by entering the untapped market in several places, regions, and countries. It can collaborate with more designers. It can target new fashion designers and talent to create unique collections. 

Threats

With the option of trendy fashion at high to medium rates, H&M still has huge competition. A few brands are selling clothes at much lower rates which could put the long-standing mission of H&M at risk. The economy could also affect the brand as people usually skip their spending on fashion accessories during an economic downturn. With all of that, tariffs put forth by countries and social media backlash are also the ones that could be a big problem for the growth of the brand. 

Conclusion 

H&M is a brand that is not just known for its fashion statement but also for its responsible behavior towards the environment. It has got a good hold of its stores worldwide, be it the physical stores or the online ones. 

Moreover, the brand is always on the lookout for opportunities, and the moment it catches a proper trend where it could fit in, it starts similarly promoting itself. Everyone from almost every class can get a hold of what they need at H&M. 

Be it sustainable clothing, or fashion that goes beyond expectations, H&M has got you covered with all. 

FAQs

How many H&M stores are located worldwide?

H&M Group, a worldwide fashion and design powerhouse, boasts a presence in over 70 markets with 4,000+ stores and online retail spanning 60 markets.

What does the H and M stand for?

H and M stands for Hennes & Mauritz.

What is H&M known for?

The H&M Group presents a diverse portfolio of eight distinct brands, each embodying its unique identity. Their core business concept revolves around providing fashion and quality at the optimal price point.