APSOTW: H&MThis is an answer to a fictitious RFP for the Account Planning School of the Web and has nothing to do with anything H&M is really doing.

The RFP, Summarized:By selling 1 million basketball shoes to an influential target audience we will change the perception of H&M for the many, which is important for the core business.

The following slides will analyze the current state of H&M, as well as the sneaker business, identify an opportunity and present a way to make use of it.

http://www.realliferunway.com/real-life-runway/2012/1/16/pumped-up-kicks.html

Where is H&M Now?H&M is the world’s second biggest fashion retailer, known for its basics and as of 2004 designer collections for the many. It has changed the way people shop for clothes by selling the aesthetics of high fashion at an accessible price.

While H&M is still growing, and its core brand might possibly be the single biggest fashion retailer, Inditex and Uniqlo growing faster with their respective retail portfolio.

Why is H&M Here?

Unlike Old Navy, Gap or Banana Republic, H&M doesn’t signify class.

Unlike Urban Outfitters or Abercrombie & Fitch, H&M isn’t aligning with a particular lifestyle, or e.g. rebellion.

H&M is not selling a prefabricated meaning.

“Clothes reach stores with practically unspoiled semiotic potential, and consumers are invited to be expressive rather than imitative with the goods [...].” - Rob Horning (n+1 Magazine)

http://www.highsnobiety.com/2012/10/25/highsnobiety-photo-editorial-maison-martin-margiela-with-hm-collection-lookbook/

H&M is Covering the Spectrum.H&M caters to the fashion-involved as much as less-daring freshmen pondering a bright chino for his first date with the girl sitting in the second row in class.

Precisely because H&M isn’t selling a ‘meaning’ to a subculture or a lifestyle, catering to a niche isn’t commercially viable. It has to attract the many as much as the so-called-influencers. Regarding the assumption that we’re going to reach the many via influencers, they would’ve to be found. In addition, recent research by Yahoo shows that ‘influential’ members on twitter usually aren’t more effective in spreading a message than regular users. In addition, there is increasing evidence that trends spreads through large-scale random copying, rather then specific influencers.

(cf. Duncan Watts, Everyone’s an Influencer and Earls/Bentley in I’ll Have What She’s Having, cf. McCracken’s model in Flock & Flow: 2004)

H&M is About Experimentation

H&M allows people to experiment with fashion without risk – they'll never go too far and look stupid, nor will they spend too much doing it. It’s about mixing and matching basics with a sometimes fancier choice.

Starbucks is taking the rough-edges off alternative, neighborhood coffee culture to attract people who’d otherwise not consider this ‘high risk’ option.H&M is doing the same with design and high fashion.

“H&M offers fashion and quality at the best price.” - Its offering of basics and always-current designer collections allow people to experiment with their appearance.

Now What Has This to do With Basketball Shoes?

What’s in a Basketball Shoe?

Basketball shoes aren’t simply basketball shoes. They are collectibles, objects of desire in many dedicated blogs, centre of a subculture and most recently heated focus of a debate about race.“Nike touches a nerve in the debate over race and

marketing with $315 shoes -- and black leaders may finally be saying 'enough.' A wrap-up of the week's debate.”

Domination

Nike is dominating the US$2 billion basketball shoe market with a combined share of 95% for Jordan and Nike.

In a market where Adidas and Under Armor have been trying to win tenths of share points with much higher budget, one million pairs of for-purpose basketball shoes seems unrealistic.

Challenging Nike in ‘real’, purpose-built basketball shoes is like getting into a game in Rucker Park with your casual jeans.People would remember us, but only for how stupid we looked.For-purpose basketball shoes are too far from what people associate with H&M to be a viable fit in the short term.

Sneaker Culture is Brand CultureContrary to a t-shirt at H&M, Nike’s, Adidas’ Originals and Converse’s Chucks are built on history.

Sneakers point to music, skate or hip hop culture, even if two thirds of them are not used on a court or a stage anymore.

http://www.nytimes.com/2003/09/28/style/sneaker-stories-following-the-trail-of-a-cultural-shift.html?pagewanted=all&src=pm

However, shoe categories have been blurring. Casual, slightly-branded high-top sneakers are making their ways into schools, clubs and offices, removing them further from their heritage.

And while everybody from YSL and Prada and Zara are trying to sell them, H&M is primed to capture this market.

Shoes are Changing

Where Can H&M go in The Future?Instead of trying to sell real basketball shoes in a market that works opposed to H&M, or to address sneaker heads who won’t be attracted because H&M lacks street credibility, the long-term goal for H&M has to be different: H&M can become for shoes what it has become for t-shirts. The source of basics and more daring special editions.

Fast, as in ‘More’, Sneakers?A Barrier for H&M.What happened to t-shirts and fashion a while ago is now starting to hit shoes: Less branding and much more product choice, a trend embodied e.g. by ALDO, which sees itself as the H&M or for shoes.

Regarding H&M, one assumption is that women should have less of a barrier to buy shoes at there, also because of some preceding designer collections (Choo). However, most guys, even if they own fashionable sneakers, are usually only wearing one pair or two until they are falling apart*. For them, it is about ‘one pair of shoes combined with a combination of what’s in the wardrobe’. Every additional pair of sneaker bought is seen as a bit less important and because most guys have one or two, in comparison to many t-shirts, that one pair is still a bit special. Men still see shoes as a pretty stable foundation for how they’ll look. This might be why they don’t by them much at places that only sell them only on the side, like H&M or Zara.

http://www.businessoffashion.com/2012/10/ceo-talk-aldo-bensadoun-founder-and-executive-chairman-aldo-group.html* lack of sales data, derived from observation and chats

Where Can H&M go Now?

The short term business challenge for the series, then, is to get guys to try sneakers at H&M while building the H&M brand towards credibility as a shoe retailer. In most of the 1,000,000 cases this means nudging an initial purchase.

How do we Get Guysto do That and What is The Barrier?There is no reason to change H&M’s successful strategy of basics and collections, as this is still what H&M is about: experimentation, combination and trying out things.

Nevertheless, for H&M to become credible, and to get guys to try out sneakers, H&M needs to overcome the mindset of sneakers as lifestyle markers.

A point of view like “It is not what you wear, but how you wear it” would be fine for H&M. However, in a culture where wearing trucker caps and glass-frames without glasses is perfectly normal, this doesn’t excite anybody. And what does the ‘how you wear it’ part mean anyways?

“It’s not how you’re wearing them, it’s where they take you.”

Turning the phrase ‘good shoes take you good places’ on the head, this is what all the experimentation is for: getting to new places, real and metaphorical ones, new feelings, new experiences. Like a first date as the trigger for trying out a different style.

This is not about a brand or a band or a subculture, but the fact that nothing gives you ‘swag’ like a fresh pair of sneakers under your feet.

Make One Basic Product Firstand Extend It.H&M should launch one flagship sneaker in many colored variants, as prototypical as the H&M hoodie and t-shirts in many colors. As this is about introducing a colorful range of one type of sneaker, there should be a batch of a limited edition that marks the launch of this new shoe (e.g. the H&M One) and the ‘historic’ move of H&M into footwear.

HistoryTag has been developed for Hiut Jeans and gives every product a unique ID that can then be ‘furnished’ online with a personal history of places and experiences. In the absence of a Nike ID-like configurator, it would be a way for H&M to bring the story of ‘getting to new places’ alive online, to a way bigger audience than Hiut and attract a more fashion conscious audience first. The packaging can also point to destinations, both literally (“There’s more route to work than one.”) and more abstract (“She likes green, doesn’t she?”).

While This Doesn’t Sound Very Creative: Launch Loudly.To sell 1.000.000 sneakers, H&M needs to reach many people, and not only a small group of fashion lovers. H&M has experience in doing this successfully and can frame the launch with press as the biggest thing that hit the shoe market since Nike met Jordan.

To build anticipation for the limited edition they will be pitched to specialist blogs like www.highsnobiety.com and magazines. Then, the basic product and its combinatory possibilities (e.g. color by weekday, sneaker pairs by national flag colors) will be presented in media channels with a bigger reach. At a launch event held at some hard-to reach and only walkable place, the first batch of limited editions is then sold to a selected audience.

As an ‘activation’ element, people could get e.g. an additional pair of sneakers if they agree on going to whatever place a little microsite/interactive banner, POP kiosk suggests, obviously before knowing what it will be. They should be somehow eyeopening, only to reach by foot, places nobody checks in on FourSquare. Documenting it with a predefined checkin/post/photo unlocks the discount at POP and gives H&M content to back up it’s claim.

To tell its point of view on shoes, H&M should consider a film, given studies by the IPA demonstrate TV’s continuing reach and effectiveness and H&M’s own success stories.

Collaborate and tell a longer story.After the launch, the idea could be extended over the year with special edition-themed products and collaborations.

Moving away from the usual topics of music, sports and subculture into ‘metaphorical’ places, there could be, for the US and UK, a Kickstarter and Skillshare themed edition and tie-in, where the purchase of a pair supports Kickstarter initiatives or works as Skillshare credit.

This could connect H&M with a progressive audience and give those platforms a bigger audience. Other collaborations, like with UNICEF could also get an edition.

The Importance of H&M’s ShopsThe most important place to make people realize H&M is taking sneakers seriously are the 2472 shops that see thousands of customers each day. Therefore, the sneakers have to be featured prominently, like H&M’s designer collections usually are.

The working hypothesis as derived from e.g. Nike’s stores is that flagship shoes need a separate presentation area or wall, symbolizing the idea, instead of being put on display with certain looks on a display dummy. Therefore, there is the question of how to design and present shoes not as a side part, but a central part of the offering, should this be the case in the long-term.

Business StrategyBy offering a range of basic sneakers in many colors and special edition H&M can become for shoes, what they have become for clothes and accessories: The source for basics and sometimes a more fancier choice.

The Key Challenge Get guys to try sneakers at H&M, while making H&M credible as a shoe retailer.

Target audience and mindset

Guys in their late teens and twenties. They want to experiment and do their own thing, but at the same time, they don’t want to look stupid. They aren’t particularly into fashion, but they feel the pinch to look and behave ‘properly’ and be a bit more interested in those formerly unmanly topics.

The barriers “I only need one pair of sneakers, but that has to be a bit special and ‘fit’ me.”

The role of communications - What should they take out of it?

To make them think “Ah, why not. I could do with another pair. That’d probably look quite good on me”

The Comms Strategy By demonstrating that a fresh pair of sneakers can take you to awesome places every day.

How it will workInteractively, by nudging people to go to interesting places themselves. Collectively, by building anticipation about a limited edition and ‘the biggest thing that hit footwear since Nike met Jordan’.

To Sum it up

5 Questions

What is the sales history and long-term plan for footwear at H&M?

How does H&M define ‘basketball shoes’?

How will the design process for the shoes look like?

How large must special editions be to justify a price of 50$ and what is the justification of the price point?

How much retail space will H&M reserve for the launch of the series and subsequently for shoes in general and why?

Thank you!

Thomas Wagner

http://www.sophisticated.at/blogs/thomas

@thomas_wagner

Fresh in Singapore: http://sg.linkedin.com/in/wagnerthomas