H&M have had some serious column inches recently, thanks to the launch of their new premium line, & Other Stories, the relaunch of their Oxford Circus London flagship, breaking news that Beyoncé will front their Summer campaign and the announcement that they will develop their sports line and open sports standalone stores.
The retailer also dressed Helen Hunt for the Oscars and made a dramatic return to the fashion month schedule (after an 8 year absence) at Paris Fashion Week in February. Add to the news reel their plans to open 350 new stores this year, including new markets. Financial news from the retailer in March reported a 10% decline in first quarter profit, thanks to substantial long-term investments and the economic climate. Sales, however, were reported to be up 2% despite much talked-about poor weather in Europe and North America delaying the start of the spring season.
But despite the headlines, how can a buyer, merchandiser or designer really understand what’s happening with product and sales?
At EDITD, we run the world’s biggest apparel data warehouse, which retailers use to track the market, trade more competitively and align product assortment. We’ve dug into the data to reveal what H&M does best, and where’s there’s room for improvement.
Product offering
H&M currently have 2,786 products for sale online, which is fewer than some of their competitors: Boohoo have 5,039, Forever 21 have 5,994 and ASOS have a whopping 45,383. However, since the start of March, ASOS have only seen sell-through on 1.29% of that offering, with Forever 21 taking the crown for 6.11% of their product range selling through. H&M again sit bottom with 0.68% of their online offering in March selling out.
Price architecture
As the chart to the right shows, H&M have a wider price spread than Forever 21 and Boohoo, ranging from £0.50 to £198.53. Despite having a broader pricing range, H&M also have a lower median price than Forever 21 and Boohoo. More interesting still is that although H&M have a median price most similar to that of Forever 21’s, an option count reveals the product weighting differs greatly at H&M. Forever 21 have a fairly even weighting on the low to middle end of their pricing architecture. H&M however, focus tightly on the median price itself and could perhaps benefit from padding out the price bracket above and below.
ASOS, whose stock a ‘suit-all’ range, are a different entity altogether, with a far higher upper range and median price point.
Discounting & Restocking
H&M have commented that markdowns have affected their sales, but the data shows they have less of their range on discount than any of the retailers included in this report. 15.4% of H&M’s product range currently sits at a discounted price, in comparison to 16.5% at Forever 21, 34.5% at ASOS and 43.7% at Boohoo. Their restock levels support this, with 26.1% of current stock having been restocked (11.7% at Forever 21, 10% at ASOS across all products and 18.6% at Boohoo). So, H&M are reducing less stock and reordering more from their successful buys. Perhaps upping their buying confidence and feeding in more new drops would increase their sell-through rate, seeing as product movement seems to be fairly successful.
Looking deeper into product specifics shows that H&M have a much trusted core range, with items that we first detected in our database in mid-2011 still retailing. That range features t-shirts, vests, basic jumpers and sleeved jersey dresses, with seasonal colour updates. H&M aren’t afraid of discounting on this core range, and restocking into the discounted price, awaiting new colourways to return the garment to the original, full price. These items are obviously economical for the retailer to manufacturer and therefore it isn’t too much of a risk for them to clear lines at reduction.
Forever 21 also have a reliable core range of skinny jeans, leggings, tanks and tees which are consistently restocked but they also shift high-trend items at lightening speed; most recently garments featuring ombré and tribal prints.
Boohoo are happy to back a trend right to the end, restocking on long-standing trend garments even at discount. Take their Yasmin ribbed skater dress for example, which first arrived online on 24th December 2011 at £18. It’s been run in 12 colourways, with many restocks after a price drop to £15.
For ASOS, their most restocked items are actually cosmetics, specifically Nars make-up. This is great for the online retailer as such products aren’t going to have fit and returns concerns, don’t require modelling and are less prone to price slashing.
Peer pressure
H&M can look to data around Forever 21 to build expectations and tactics around growth during their period of global expansion. Forever 21’s visual merchandising online is rapid and consistent too; with blog updates every 1-2 days (compared to H&M’s every 2-4 days). Forever 21’s details like free shipping on orders over £50 are tactics that H&M may need to consider to remain engaged with their core customer as they add to their ranges.
