Journal of Education, Humanities and Social Sciences
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Analysis of Brand Marketing Strategy under the Background of
Digital Media--Case Study of H&M Company
Yijia Gao
*
Department of college of journalism & communication, Jilin University, Changchu, 130000, China
*Corresponding author: gaoyj9922@jlu.edu.cn
Abstract.
With the continuous development of the Internet and digital media, digital media has
emerged as a new form of media, combining digital technology with traditional media to provide a
richer and more diverse way of information dissemination. This paper takes the global famous brand
H&M Company as an example, it comes up with the advantages and disadvantages of its brand
marketing strategy in the era of digital media by using business tools 4P (Product, Price, Promotion,
Place), SWOT (Strength, Weakness, Opportunity, Treat), and other business theories, and finally
summarizes the main pain points of its sales performance compared with the past, this report also
proposes feasible plans to provide ideas and references for the future marketing strategy of the
brand. As technology advances and consumer behaviors change, the lessons from this case study
remain relevant, emphasizing the necessity of adaptability, creativity, and customer-centricity in the
arena of digital brand marketing.
Keywords:
brand marketing strategy, digital media, 4P theory, SWOT.
1.
Introduction
With the continuous development of Internet technology and digital technology, digital media has
emerged as a new form of media, combining digital technology with traditional media to provide a
richer and more diverse way of information dissemination. It is digital, interactive and personalized.
The emergence of digital media not only changes the way people get information, but also has a great
impact on People's Daily life. Under the background of digital media, the battlefield of enterprise
brand marketing diversion is transformed from traditional marketing to digital marketing. So digital
media should be understand. In fact, it exists all the time around us, through websites, social media,
mobile apps and other media marketing activities, such as SEO, SMM and so on. Therefore, each
brand needs to make marketing strategies to keep pace with the times to comply with the general
trend of the development of The Times. These characteristics of digital media make the connection
between customers and brands more close, not only that, but also the competition between brands of
the same type is increasingly fierce. Different brands will have different marketing strategies. At
present, most brands have realized the importance of digital media for brand marketing, and have also
made some breakthrough progress, such as enabling customers to grow grass products by themselves
through the publicity of online red bloggers on social platforms. However, the development of digital
media is getting faster and faster, some brands are still using the old marketing methods, the results
are not good, and the operating costs of offline stores are overloaded. Therefore, brands need to make
use of the characteristics of digital media to plan more perfect marketing strategies and increase the
stickiness between customers in order to stand out in the same type of brands.
Taking H&M Company as an example, this paper first introduces the current operating situation
of H&M Company, then specifically analyzes the advantages and disadvantages of its brand
marketing strategy in the era of digital media by using 4P, SWOT and other theories, and finally
summarizes the main pain points of its sales performance compared with the past, and proposes
feasible plans to provide ideas and references for the future marketing strategy of the brand.
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2.
H&M Company Overview and Development Status
2.1.
Introduction of H&M Company
H&M is headquartered in Stockholm, Sweden, and has its roots in Hennes, a women's clothing
store opened by Persson in 1947. In 1968, he acquired the outdoor brand Mauritz Widforss and the
business was renamed H&M. The company continued to expand in Europe, starting online sales in
1998 and entering China in 2007. As of 2022, H&M has 4,465 stores worldwide and net sales of SEK
223.55 billion [1]. Net profit plunged 68 percent to 3.567 billion kronor. H&M has a clothing and
cosmetics business aimed at younger customers. The company divides its clothing into three
categories: basics, seasonal trends and fashion trends, which it calls the "fashion triangle." H&M
production is outsourced, divided into two lines: an "efficient supply chain" in Asia, with a share of
60%, supplying regular and children's wear, and a "rapid response supply chain" in Europe, with a
share of 40%, producing low-volume fashion. The company works with third parties to transport,
tracking the whole process through the supplier management platform. It takes 3 weeks from design
to market. H&M is good at cross-border marketing, the company invites famous stars, famous models
to endorse, and well-known luxury designers to strengthen the "fashion" attribute of the brand [2].
2.2.
H&M Evolution in Digital Marketing
H&M as one of top-branded fast fashion clothing store, H&M is exploring actively and adapting
the digital market continuously. In 2017, amidst the burgeoning popularity of digital retail, H&M's
CEO Karl-Johan Persson, conceded that the company had not modified its supply chain in line with
the evolving digital landscape, and hence H&M unable to respond as rapidly as the change in
customer preferences. This predicament resulted in high inventory levels and huge markdowns to
clear excess stock, ultimately leading to a decline in H&M's revenue during that period. In the next
few years, H&M heavily invested in digital infrastructure and took omni-channel strategy to integrate
the digital and physical worlds. Those series of actions make H&M
’
s online sales already accounted
for 25-30% of its total sales volume.
2.3.
Positioning
H&M
’
s brand positioning centers around accessibility, affordability, and fashion-forwardness.
The company is known for offering trendy and stylish clothing that is affordable and accessible to a
wide range of consumers. H&M prides itself on staying up-to-date with the latest fashion trends and
quickly delivering them to the market. Additionally, they emphasize inclusivity and offer diverse
clothing lines for various age groups and styles, positioning themselves as a brand that provides
"fashion for all." In recent years, H&M has also made efforts to position itself as a sustainable and
responsible fashion brand, although there has been some debate regarding the extent of their
sustainability initiatives and moral controversy. Overall, H&M aims to provide fashionable clothing
that is both budget-friendly and inclusive, appealing to a broad customer base.
3.
SWOT Analysis of H&M Brand
3.1.
Strengths
3.1.1 Variety of Products
H&M has a wide variety of products, including various categories such as clothing, accessories,
and home decor. This expansive array of offerings positions H&M favorably to address a broad
spectrum of customer segments, including men, women, and children, spanning various age groups
and fashion tastes. By presenting a comprehensive assortment of products, H&M guarantees that
consumers have the convenience of accessing a one-stop shopping destination, where they can readily
find all their desired items, thereby enhancing the available choices for consumers while shopping
online [3].
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3.1.2 Competitive Pricing
H&M is committed to being the most sustainable fashion retailer by utilising the flexibility and
cost-effectiveness of the fast fashion model to deliver high quality products at lower prices. Compared
to other competitors (eg. ZARA), H&M has advantages in its prices, H&M's apparel for adults spans
from $2.99 to $299 and are sometimes discounted by nearly 50%, while Zara’s pricing ranges from
$5.90 to $599. This puts the average price point for apparel at H&M at $32.28 vs. $54.13 at Zara,
which gives H&M an outstanding price advantage in similar products, especially in the context of
digital retailer, where it is more convenient for consumers to compare prices between products and
H&M still has a big advantage on it [4].
3.1.3 Strong Online Channels
In the era of digitalization, firms that adeptly embrace and harness the internet gain a substantial
competitive edge. H&M boasts a robust online footprint, encompassing a sizable following on various
digital platforms. In addition to its official website, the company leverages third-party online
platforms to broaden its reach among digital consumers, channeling this presence to stimulate e-
commerce sales. Consumers can make online shopping through H&M official platform, and also use
different third-party platforms in different countries and regions, such as Taobao and Amazon.
3.1.4 Efficient Supply Chain
H&M maintains a vast network of suppliers and production facilities across the world. This
extensive network allows them to source materials and manufacture products in different regions,
leveraging the strengths of each location in terms of cost, quality, and speed. H&M presents its
detailed supply chain information on the official website, it has a robust supply chain management
system, H&M owns over 605 commercial product suppliers who manufacture products for them in
over 1183 tier 1 factories in Europe, Asia and Africa. While China and Bangladesh are the largest
production markets for clothing, and the European Union is the largest production market for its
beauty assortment. Wide supply chains make H&M to meet different customer groups’ demands
promptly, and effectively manage inventory levels to avoid overstock or shortages [5].
3.2.
Weaknesses
3.2.1. Uncompatible business models
H&M, as a typical fast fashion brand, has the distinctive characteristics of trendy design, fast
launch of new models and so on. It is undeniable that H M was indeed a great success in the past, but
in recent years, with the continuous development of digital media, e-commerce business model has
been continuously impacted, revenue and profit have fluctuated, and some stores have been closed.
In fact, H&M also started to involve e-commerce very early on, but only as a supplement, it has
proved difficult for enterprises to integrate and grow with another model after relying on one model
successfully [2].
3.2.2. Product incidents continue
In the North American and European markets, the new marketing coordinate of "Diversity and
Inclusion" has become more and more noticeable in recent years, and "Diversity and Inclusion" seems
to have become the new "marketing code". But in 2018, HM launched a children's shirt with the
slogan "Coolest Monkey in the Jungle" and enlisted a young black boy to be the model. The practice
angered the public overseas and was criticized as racist, leading to a severe backlash on social media
and a nearly 20% drop in sales during the quarter.
In addition, H&M also received criticism for its deceptive environmental marketing tactics, which
became known as "Greenwashing." HM uses such marketing strategies to create the impression that
their products are environmentally friendly, which may contain misleading or even exaggerated
claims. It is so frustrating when companies use greenwashing to try to make themselves look good.
Brands need real solutions to the environmental problems facing the world, not just marketing
gimmicks.
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3.2.3. Insufficient brand operation capability
With the continuous development of digital media, brands need to carry out more comprehensive
marketing on digital media, which is not a small challenge to the operation ability of brands.
Table 1
Comparison table of the number of fans of H&M and ZARA on various social platforms
BRAND NAME
TikTok
RED BOOKLET
tmall
H&M
35000RMB
27000RMB
14.505 million RMB
ZARA
1.245 million RMB
91000RMB
23.890 million RMB
Table1 Data source: Enterprise public data collation
According to the above table 1, it is not difficult to see that H&M has huge problems in the
operation of social media. Compared with ZARA, the number and activity of fans on its social
platform are not optimistic. Not only that, the latest update date of H&M WeChat official public
number is September 8, 2023, 298 days have passed since the last update. Moreover, through
horizontal comparison with the public accounts of similar brands, the quality of the tweets of the
official WeChat public accounts has obvious shortcomings. Today, with the continuous development
of digital media, social media is the largest source of information accepted by the public, and brands
should maintain their consistent tonality to attract and narrow the distance between consumers.
3.3.
Opportunities
3.3.1 E-commerce growth
The rapid expansion of the online retail sector and consumers increasingly favor the convenience
and accessibility of online shopping for their fashion needs presents a substantial opportunity for
H&M to leverage this trend by bolstering its e-commerce capabilities. By refining its website and
mobile apps, and providing a seamless digital shopping experience, H&M can extend its reach beyond
the confines of its network of brick-and-mortar shops to a wider customer base. Implementing
effective online marketing strategies, tailored product recommendations and user-friendly interfaces
can further increase customer engagement and stimulate the sales [3]. Moreover, it is necessary for
H&M ensure that the order processing is simple and deliveries are made on time, thus increasing
customer satisfaction in the digital space.
3.3.2 Expanses in emerging markets
Digital retailer is a good opportunity for H&M to expanse in emerging markets, H&M can focus
on countries with growing scales of online shopping and increasing disposable income [3].
Consumers in those countries can always better adapt to H&M's fast-fashion model and are seeking
for a more affordable, discounted and trendy options. H&M can tailor its product offerings and
marketing strategies to effectively cater to these emerging markets, by analyzing the consumer
preferences in target markets. This will not only enable H&M diversify its revenue streams but also
reduce the dependence on existing markets.
3.3.3 Sustainability initiatives
E-commerce is also part of H&M's sustainability strategies, it can help the company through
special hard times, such as during the pandemics large number of offline shops have closed, H&M
temporarily closed many of its physical stores and rapidly expanded its e-commerce capabilities and
online presence. Their efforts to improve the online shopping experience and integrate it with their
physical stores have helped them reach a wider audience. It helps H&M to pull through the frustration
stage and survive sustainably.
3.4.
Threats
3.4.1 Out of fashion
With the continuous development of The Times, the scenery of "fast fashion" brands such as H&M
is not like the past, people are no longer pursuing the so-called "trend" and "fashion", more, people
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are willing to pursue their own real love, comfortable goods. The trend of fashion may change all the
time, but only the truly good quality products will gain the lasting love of consumers.
3.4.2 The new retail
The exploration of new retail models takes time to prove whether they are effective. Although
H&M has been in contact with e-commerce channels in the early years, it has not made much progress
in this regard, and the exploration of this model needs time to confirm its success [6].
3.4.3 Increased costs for offline stores
With the continuous development of electronic commerce, more and more consumers choose to
buy directly online or view goods in offline physical stores and buy online. Sales at offline stores
gradually decline, for the six-month period, the report published by H&M for January-June 2023,
selling and administrative expenses increased by 6 percent in SEK compared with the same period
last year [7]. At present, the company is also accelerating the development of work programs to
control costs and efficiency.
3.4.4 Lagging offline consumption experience
Taking Chinese consumers as an example, the new speed of offline physical stores is lagging
behind that of the new speed of the official website of H&M. And now more and more consumers
are willing to buy on the official website and flagship store, which is more convenient and more
advanced. Therefore, this is also one of the reasons for the decline in profits of offline stores.
3.5.
SWOT Strategy Summary
3.5.1 SO—Dominance reinforcement
H&M makes full use of the advantages of various products and competitive prices, and actively
expand into emerging markets to expand their market share.
With the growth of e-commerce, H&M makes full use of the existing sales channels and increase
the sales proportion of e-commerce channels.
The continuous development of online sales has put forward high requirements on the speed of
supply and delivery of goods, and H&M's efficient supply chain can help it cope with this challenge.
3.5.2 OW—Disadvantage improvement
Brands should actively seek strategies for online and offline omni-channel development, and
overcome the problems of poor management faced by offline stores by improving in-store digital
experience.
H&M solves the problem of slow growth of “pure play” e-commerce by improving physical
presence
3.5.3 ST—Differentiated competition
H&M makes use of its own design advantages and brand advantages to innovate and launch new
products that are more fashionable and more in line with market demand.
H&M actively expands more comprehensive e-commerce channels, and develop a "new retail"
model different from other brands.
3.5.4 TW—Tactical evasion
H&M ensures product quality and carefully choose product marketing strategies.
H&M improves the external business model to avoid the failure of both online and offline channels.
H&M adjusts the internal management mode to improve the operating efficiency of the company.
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4.
Suggestions for the Future Development of H&M
4.1.
Improvements in H&M Products
To bolster its position in the highly competitive fashion industry, H&M should adopt a
multifaceted approach including products sustainability, quality control, and design innovation.
Firstly, H&M should expand and promote its sustainable and eco-friendly product offerings,
responding to the increasing consumer demand for environmentally conscious fashion. This entails
investing in innovative sustainable materials and prominently showcasing these products both in
physical stores and online. Secondly, H&M must address quality-related concerns by implementing
rigorous quality control measures across its supply chain, aiming to reduce product return rates and
consequently enhance overall customer satisfaction. Lastly, to differentiate itself from similar
products and mitigate copyright infringement accusations, H&M should prioritize design and style
innovation. Collaborating with emerging designers to create distinctive, fashion-forward series of
products catering to diverse tastes should be a key strategy. This approach should prioritize originality
and quality to foster brand loyalty and secure a stronger market position for H&M [8].
4.2.
Pricing Strategies
Bundle Pricing: Create value bundles by grouping related products together at a lower total price
than if purchased separately. For example, offer discounts when customers buy matching outfits or
seasonal clothing sets.
Value-Based Pricing: Align pricing with the perceived value of the products. Highlight the quality,
sustainability, and uniqueness of H&M's offerings to justify slightly higher prices for certain items
while keeping staple items competitively priced.
Dynamic Pricing: Implement dynamic pricing strategies that adjust prices in real-time based on
factors such as demand, inventory levels, and customer behavior. This approach optimizes
profitability and minimizes excess inventory.
Segmented Pricing: Tailor prices to specific customer segments or demographics. Offer student
discounts, loyalty program benefits, or special pricing for certain age groups to attract and retain
different customer groups.
Premium Pricing: For exclusive or designer collaborations, H&M can implement premium pricing
to capitalize on the perceived value and exclusivity of these collections.
Seasonal Pricing: Adjust pricing based on seasonal trends and demand. Offer competitive pricing
on seasonal items during peak seasons and clearance sales during off-seasons.
Competitor-Based Pricing: Monitor and benchmark prices against key competitors in the fast
fashion industry. Adjust prices to remain competitive while offering unique value [8,9].
4.3.
Improve Brand Channel Development
According to H&M's report for the period January-June 2023, Net sales in the six-month period
increased by 9 percent to SEK 112,488 m (103,670) [7]. In local currencies the increase was 1 percent.
Sales in the physical stores increased in the six-month period despite there being around 300 fewer
stores than in the previous year. Around 30 percent of sales are online. It can be seen that online sales
channels play an increasingly important role in H&M's sales process.
H&M needs to expand more network channels. On September 8, 2023, H&M Jingdong official
flagship store was officially opened. At this point, H&M has settled in Tmall, Jingdong and other
leading enterprises in China's e-commerce industry. But at the same time, the sales channel of TikTok
is always closed for H&M. Given that other competitive brands such as ZARA have entered TikTok
and established its flagship store and achieved good sales performance, H&M should start to expand
this crucial online channel.
Open up online and offline sales channels. Expansion is taking place with a focus on omnichannel
sales. Customers want to be able to shop and be inspired where, when and how they choose -in the
stores, on the brands’ own websites, on digital marketplaces and on social media. The optimisation
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of the store portfolio is continuing in parallel, meeting customers’ needs in interaction with the digital
channels.
Emphasize the role of social platforms. H&M has long established WeChat public accounts and
Red Booklet accounts for itself, but it is a pity that H&M did not realize that such social platforms
are crucial to sales. Such platforms may not directly increase sales, but to a large extent, they can
significantly affect customer perception of product quality and price [10]. On such social platforms,
customers can express their suggestions or likes for products at will, and consumers will be more
sensitive to capture whether a product is worth buying. When a product is praised, it will be translated
into sales.
Accelerate the improvement of supply chain efficiency. Supply chain efficiency is a crucial part
of "new retail", in such a rapid development of digital media environment, offline stores are no longer
the terminal of sales, but a node in the entire sales path [2]. The brand can judge the feasibility of the
product according to the customer information received by the store, and then help the company better
match the price of the product and the company's inventory, so as to alleviate the company's inventory
pressure.
4.4.
Improve Brand Promotion
In the past, the advertising promotion of clothing brands mainly focused on online and offline
advertising of traditional media, such as some newspapers, magazines or TV ads, etc., but in the era
of digital media, the promotion methods of these traditional media appear to be a little old-fashioned
[11].
Cooperate with Internet celebrity bloggers for promotion. Take TikTok for example, this social
media with huge traffic is a good opportunity that every brand should not miss. Bloggers can make
fans love this product through various forms such as wearing and recommending good things, so as
to achieve the effect of product marketing and brand promotion.
Develop innovative brand marketing strategies that suit H&M. For some special festivals or
themes to carry out marketing planning, the purpose is to promote their own brand concept, so as to
obtain profits. The most important purpose of brand promotion activities is how to make their own
brand stand out in a crowd of similar brands [12]. At the same time, HM is also in urgent need of
improving its marketing quality and innovation. Taking H&M's WeChat public account as an
example, the content published by it is cluttered, the layout is not fashionable enough, and the quality
is not high, which is easy to make the audience bored. Not only that, its marketing content is also lack
of innovation, blindly limited to the stacking of new product push information, and did not firmly
grasp the connection between current events and the brand.
5.
Conclusion
The research topic of this essay is to analyze the business marketing strategy in the context of
digital media, this research takes the global famous brand H&M as an example, and through SWOT
and 4P analysis, it comes up with the advantages and disadvantages of H&M in the context in the
evolution. Moreover, this research has explored the challenges and opportunities presented by the
digital media environment, emphasizing the need for adaptability and responsiveness in an ever-
changing landscape. H&M's ability to stay relevant and innovative in the digital age underscores the
importance of continuous adaptation and a customer oriented approach. One of limitations is the
reliance on publicly available data, which may not provide a complete picture of H&M's marketing
strategies. Access to proprietary or internal data could yield more accurate and detailed insights into
the company's digital marketing practices. Future research could explore avenues for collecting first
hand data through questionnaire survey, interviews and focus groups, or gaining access to such data
through partnerships or collaborations with the industry.
In conclusion, H&M's brand marketing approach provides useful insights for marketers and
businesses seeking to survive in the ever-changing digital media world. As technology advances and
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consumer behaviors change, the lessons from this case study remain relevant, emphasizing the
necessity of adaptability, creativity, and customer-centricity in the arena of digital brand marketing.
The beneficiaries of this paper are not only the H&M brand, but also all those enterprises who are
making digital transformation in retail and enabling e-commerce in the digital age, or those who are
preparing to start a business. The ranges of business strategies made by H&M, and the strengths,
weaknesses it has already revealed or may generate in the future have reference values.
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