A(P)STOW CHALLENGE:H&M RFP

Presentation by Matt Leader

Who are we talking to?

Typical H&M customer is a fashion-forward but cost-conscious 20-something professional or student.

What do they care about?

• The good: H&M seen as young (88%), trendy (81%) and inexpensive (94%)

• The bad: H&M products are seen as low-quality (68%) and the in-store experience as “chaotic” or “unpleasant” (27%).

Where else are they spending money?

In addition to H&M, our shopper frequents ZARA, Topshop and Forever 21 for fast-fashion items, The Gap & J. Crew (and where available, UNIQLO) for basics, and aspires to shop at upscale boutiques or lower-end design houses.

Basic Problem:

How different is H&M from the competition?

“Not Much” – 82%

drama

spontaneity

energy

fun

uniqueness

fascination

RFP touchstones

NeedsTo Be More Interesting.

Heart of the RFP:

What Won’t HelpAlready highly associated.

Already highly associated.

More “designer trendiness”

More “youthfulness”

Already highly associated.

Goals:

Break the Fast Fashion

Follower Model. Associate H&M With “Style Leadership”.

Method:1. Focus. Clearly delineate between

H&M Basics line and H&M Fashion line – through branding and in stores.

2. For the fashion line, reverse the top-down designer-to-customer paradigm.

3. Position H&M as uniquely authentic.

Step 1: Focus

• Split fashion items from basics.

• H&M Basics: “Everyday Standards.”

• Create separate identity, dedicated areas in-store.

• Easy to make and design. Small improvement in quality and price can draw customers from competition.

Step 2: H&M Fashion - Upend the fast-fashion model

Current Fast Fashion Model:

Copy or co-brand designers’ latest looks; hope trend-setters adopt them.

New H&M Fashion Model:

Crowdsource trend-setters and let them identify/set styles.

H&M can find and empower these trendsetters by having the public submit design or collection ideas that are voted on in-store and on the web.

H&M’s fashion line is thus pre-determined to be cool by a majority of customers; the brand is seen as a leader rather than a follower; it gains authenticity by being grassroots rather than top-down; and the range of designs and collections will be unique and interesting.

The first design challenge will be a pair of basketball shoes.

3 ways to bring Style Leadership to life

(while selling a million pairs of shoes)

Designs for shoes will be accepted in-store and on the web. Once chosen, the winning shoe will feature on H&M’s new Pinterest-like site, where customers are given the whole range of H&M goods online and invited to put together that season’s collection around the shoes.

A. Make it Pinteresting

H&M can partner with international basketball leagues and have different teams wear the various winning H&M shoes on the court and in ads worldwide. Rather than the NBA, which requires huge branding investment and offers only US-style urban cool, this approach adds international flair on the (relative) cheap.

B. Take it to the Global Court

Would the Pope wear a pair of H&M hi-tops if $3m were donated to a children’s charity?

You never know.

C. Change the Context

Step 3: Positioning

The key message is that H&M doesn’t tell you what to wear. It empowers you to find and create what you want to wear.

H&M helps you be you.

“Design Your Life.”

“Step up.Stand out.”

“FashionYourself at H&M.”

5 Questions for H&M

1. 94% of target customers do not associate basketball with “cool”. That’s a big hill to climb. Are you open to a strategy that believes that basketball shoes are the wrong fit for the brand?

2. What one fashion item in this year’s line most embodies H&M?

3. How important is product quality to you? How important do you think it is to your customers?

4. How much has each designer collaboration increased your net profit, on an aggregate and per-piece basis?

5. How do you see H&M’s market position in five years?