RETAIL MARKETING

Retail marketing is the process of bringing a product directly to customers in

a retail store. It involves the planning, promotion, and presentation of a product. ...
The four gold standards of retail marketing are product, price, place, and promotion.

Retail marketing refers to the range of activities undertaken in the retail store by the
retailers as well as the brand to promote the products to the customers in order to
generate awareness, interest, and sales.

In simple words, everything from the interior and exterior of the retail store, to in-
store advertisements, product placements, offers and promotions, and the behaviour of
store representatives comes under retail marketing.

The 6 Ps of Retailing

TRADITIONAL MARKETING MIX (4PS)

PRODUCT PRICE PROMOTION PLACE

RETAIL
MARKETING
MIX

PERSONNEL PRESENTATION
Retailers perform several marketing functions such as sales promotion, advertising
and point of purchase display. They induce customers to buy products of reputed
companies.

Retail Marketing Strategies

Different retail marketing strategies can be planned and employed for different types
of retail outlets. The elements which should be considered while crafting a retail
marketing strategy are:

Target Market: The market segment which the retail outlet caters to.

Retail Format: It’s the retail mix of the retailer and the type of the store (ownership-
based, franchise-based, discount-store, etc.)

Sustainable Competitive Advantage: An advantage over the competitors.

The main objective of the retail marketing strategy is to differentiate the retail store
from the competition by setting up and promoting a sustainable competitive
advantage which leads to increased sales.

The contours of the retail marketing strategy include:

Retail Branding

Setting up a good brand name, logo, and positioning of the retail store is among the

topmost priorities of a retail marketer. Customers are more motivated to buy a product
from a branded retail store than an unbranded one.

Price Drops

A great way to attract customers is to provide the same quality (and quantity) of
goods at a lesser price than the competition.

Limited Period Discounts & Offers

Limited period discounts and offers increase the sales temporarily and can help in
word of mouth marketing and getting more customers (and returning customers).

Strategic Placements
Strategically placing items to where the customers are most likely to buy them is a
great strategy to increase the sales. A perfect example is the placement of small
inexpensive products (also called parasites) at the billing counter.

Strategic Store Design

The store design is the first touch point for the customers. The store designed for the
people it serves to perform better than the one which isn’t. A colorful and kids-
friendly products placement suits a toyshop while classy look and colors suit a store
selling men’s suits.

Visual Merchandising

The better it looks in the store, the more chances are that the customer will buy it.
Smart visual merchandising strategies help increase sales substantially.

Loyalty Programs

Loyalty programs are designed for better company-customer relationships. These

programs involve exclusive discounts and offers for regular customers.

Strategic In-Store Advertisements

People often prefer the advertised brand over the non-advertised brand in the store.
Strategic placements of such advertisements can substantially increase the sale of a
specific brand or a product.

Training Employees to Be Smarter

Retail store employees play a very important role in the decision-making process of
customers. They can make or break a product decision of the customer with the help
of their relationship and selling skills.

Retail Marketing Importance

The traditional dependency of retailers on manufacturers has been reversed. Today’s

retailers have their own brand, their own loyal customers, and even have the power to
sell, to upsell, to cross-sell, or to down sell any product using smart retail marketing
strategies.

Smart retail marketing strategies help the retailers enhance the customer’s journey in a
retail store and make him perceive that his money is spent on the right products.

 A good retail shopping experience motivates the customers to buy a product

even when they have no intention to do so.
 Shopping from a branded retail store generates a feeling of satisfaction and
confidence among the customers.
  Strategic placements and strategic store design improves the customer’s
experience and help the retailers sell the products which provide them with the
most profits.
 Purchasing during limited period offers make the customers feel they have
achieved a great feat by saving money.

SALES STRATEGY

A sales strategy is a plan by a business or individual on how to go about selling

products and services and increasing profits.  
A sales strategy is defined as a documented plan for positioning and selling your
product or service to qualified buyers in a way that differentiates your solution from
your competitors. Sales strategies are meant to provide clear objectives and guidance
to your sales organization.  Sales strategies are typically developed by a company's
administration, along with its sales, marketing and advertising managers.
A sales strategy – unlike one for marketing or product – narrows your focus on one
very important aspect of your startup success: making the sale. While
marketing strategy focuses on increasing your visibility, a well-defined sales
strategy helps you make real quantifiable profits.

IMPORTANCE
A carefully-crafted sales strategy is critical to the survival and growth of your
company. Many business owners hyper focus on product development and forging
their marketing plan, leaving little room for the development and refinement of a sales
strategy plan. This is a costly mistake.
To understand why, let’s first establish the difference between a marketing strategy
and a sales strategy. The former is designed to increase your visibility, while the latter
concentrates on actually making the sale. A sales strategy is concerned about
generating real, quantifiable profits. No matter how good your product or marketing
plan is, it will be for nothing if your sales process can’t produce results. To get to the
level where you can consistently generate desired results, you need a well-defined
sales strategy that also covers your marketing plan.
In essence, the importance of your sales strategy goes way beyond the bottom line. It
helps you modify who your customers are and how you approach them as well as
fine-tune your sales tactics, and find the right people for your team.

There are two primary types of sales strategies: 

Inbound and outbound.

In outbound sales — the legacy system of most sales teams — companies base their
sales strategy on seller actions. They rely on manually-entered data to monitor the
sales pipeline and coach their salespeople, and they run sales and
marketing independently, creating a disjointed experience for buyers.

In inbound sales — the modern methodology for sales teams — companies base
their sales process on buyer actions. They automatically capture seller and buyer data
to monitor the pipeline and coach salespeople, and they align sales and marketing,
creating a seamless experience for buyers.

CURRENT RETAIL MARKETING AND SALES STRATEGIES

FOLLOWED BY H&M

Marketing strategy helps companies achieve business goals & objectives. These are
the current strategies followed by H&M:-

H&M Product Strategy:

The product strategy and mix in H&M marketing strategy can be explained as
follows:
H&M is a clothing retail company. It offers fast fashion clothing for men, women and
children. H&M offers following clothing brands in various countries across the globe:
 H&M: The range includes everything from designer collaborations to
everyday basics and yoga wear.
 Other Stories: Women wear: shoes, bags, accessories, beauty, ready to wear
 Cheap Monday: Denim, fashion collections and accessories for men and
women. The brand is connected with music and pop culture.
 COS: Classics and wardrobe essentials for men, women and children. The
brand had designs inspired by art and technology from across the world.
 Weekday: It makes clothing for young and style aware young adults.

H&M Price/Pricing Strategy:

Below is the pricing strategy in H&M marketing strategy:
H&M offers high quality clothes at a premium price. The major competitors of H&M
are GAP and Zara. As compared to both of these brands, H&M products are prices
relatively lower as a part of it marketing mix pricing strategy. These is due to lower
cost of manufacturing and transportation costs by H&M. As compared to Zara H&M
offers more variety of products. On an average H&M products are prices at $25
whereas that of Zara are $45. High quality and considerably lower prices attract the
youth and hence leads to increase in sales for the company.

H&M Place & Distribution Strategy:

Following is the distribution strategy of H&M:
H&M sells its products through its exclusive stores located in major cities across the
globe (4135 stores). In some countries due to regulatory norms, H&M offers its
products through franchising partners. It also offers its products through online stores
from where the customer can choose from the list of available products and purchase
them through online payment. The products are delivered at your stated address.
Cheap Monday is sold through selected retailers worldwide and through standalone
stores including its flagship store in London.
The products are manufactured in countries where cheap labour is available in order
to reduce costs. The clothes are designed by H&M and its other brands according to
segment they are targeting. H&M has developed an excellent supply chain over the
years. The delivery time is instant and the transportation costs are kept at a minimum.

H&M Promotion & Advertising Strategy:

The promotional and advertising strategy in the H&M marketing strategy is as
follows:
Since H&M group has a wide range of product portfolio catering to different
segments, it uses multi-channel promotional strategy in its marketing mix.
 TV advertisements: H&M comes with creative ads which focus on its latest
innovative designs. Each brand handles its own marketing decisions. The ads
are telecasted at regular intervals and on channels mainly watched by youth, to
increase its awareness.
 YouTube: H&M has its own YouTube channel where it comes up with unique
ad campaigns to engage with the customers.
 Digital Marketing: It indulges in excessive search engine marketing and
social media marketing to convert the potential buyers into consumers.
 Promo codes and discounts: Promo codes and discounts are offered during
the end of season sale. The discounts are offered on both online and retail
stores.
 PR: Parineeti Chopra opened the first H&M outlet in India. Such stunts
generate quick publicity for the company.
 Sponsorships: H&M signed deal with The Weeknd, sponsors Caitlyn Jenner,
sponsors Musee Des Arts Decoratifs, Creative collaborations with high end
designers and style icons, Collaborations with pop stars and sport stars
  CSR: Water, Planet, Education, Equality

People:
The employees at H&M are trained well at every level. The work culture is very
modern and employees are on a rotation basis at every department and are motivated
to innovate and come up with the best clothing wear. H&M also tie up with many
clothing designers throughout the world to make latest trends in fashion. Employees
come from diverse backgrounds having special skills. Personal and Professional
development of employees is highly promoted.

Process:
High importance is given to customer relationship management. Employees are
trained to retain highly profitable customers by giving them better service and offers.
In case of any complaints the staff at H&M puts in every effort to resolve them at the
earliest. There is a customer care number through which the customer queries are
resolved. Staff at H&M outlets help the customers in selecting the best merchandise
for them. Thus the service and delivery time is very quick thus gaining satisfied
customers.

Physical Evidence:
H&M stores are appropriately lit with great ambience and humble staff. The apparel is
arranged to have a decent look which appeals to the customers. The merchandise is of
excellent quality and latest trends. H&M is diversifying its portfolio and entering into
more international markets. To create a Buzz in the market, it engages in PR
activities. For example, celebrities were invited during its launch which created a
Buzz in the market. User stories and recommendations are always welcomed by the
brand which also helps in customer engagement with the brand.

H&M STP Analysis

Segmentation Strategy:

These are approaches to subdivision of a market or population into segments with

defined similar characteristics. Demographics and psychographic segmentation are
used for H&M to reach all their customers. H&M is spread throughout the world. This
means that the company targets many religions, culture and lifestyle. Therefore, their
marketing has to be done differently in different areas.

 Segments by class: H&M strategy is offering high fashion at low prices,

typically targeting working class, lower middle class and students.
  Segments by class/home: The most popular segment is women aging
between 15 and 30 years, either still living at home, in student dorms, or
in their first house in urban regions
 Segments by age: The most popular segment is women aging between
15 and 30 years commonly known as generation Y, ambitious with high
buying power.
 Segments by family life: Typical college to graduate females life at
home single, on their own in dorms or in their first home, either single
or as a young couple without children.

Influences: Cultural, social, personal and psychological influences result in a lifestyle

and personality. This group is looking for affordable fashion and typically shop at
more than one store. They are fashionable consumers who’s shopping as a social
activity providing pleasure in their daily lives. They buy clothes each season, want to
follow trends and are very up-to-date.

According to Maslow’s hierarchy of needs, they would fit perfectly in the social part:
belongingness/love

Targeting Strategy:

The selection of potential customers to whom a business wishes to sell products or

services. The target customers of H&M belong to the group of fashionable and trendy
consumers who see shopping as a social activity provide pleasure in their daily life,
who wants to follow the trends without investing a lot of money. The target market
for H&M is for younger people. Even though H&M offers clothing and accessories
for all ages, their target market is women. Women usually shop more for them, but
also buy all their children’s clothing and often their husbands as well. With their low
prices H&M targets woman in the lower middle class and working class, this is a
concentrated targeting strategy. Because their focus is to sell a fashionable product for
a low price they target married to single woman, mothers and daughters. Many single
young women who always want to stay on top of the fashion trends are constantly
upgrading their closets with H&Ms new affordable items. The consumers are not
highly brand loyal; rather they shop at multiple retailers in search for the perfect
fashion pieces. They shop anywhere from four to six stores on average. Customer
attractiveness is high, customer loyalty is low.

Positioning Strategy:

Is a marketing strategy that aims to make a brand occupy a distinct position, relative
to competing brands, in the mind of the customers? H&M is a retailer that is looking
to provide consumers with fashionable, high-quality clothing at the best price
possible. They offer “fast-fashion” clothing, in other words from runway to racks in
record time, and sell European influenced clothing in the American market.
Additionally, H&M carries clothing in a variety of categories including women’s
casual, men’s business, children’s wear, footwear and accessories. The company is
the second largest clothing retailer in the world, the largest in Europe and actively
engages in E-retailing. H&M is also economically, socially, and environmentally
sustainable

Social Media Marketing by H&M

Facebook:

H&M has attracted more than 14m fans to its Facebook page and posts several
updates a day except on weekends. Most of the updates focus solely on promoting its
products, but in among the blog standard “buy these trousers” posts there are some
really neat promotional ideas. For example, the retailer clearly does a lot of blogger
outreach and often links to third-party blog posts and articles on its H&M Life site.
Similarly, H&M has run several competitions recently that require fans to submit their
own photos for a chance to win, which is a great way to encourage engagement that is
relevant to the brand and more meaningful than just asking for a ‘like’ or re tweet.

 Twitter:

H&M has created separate Twitter feeds for each of the local markets in which it
operates, but each one uses the same background and header image so the branding is
obviously closely controlled. The feeds appear to be equally poor at responding to
other users, with each tending to churn out marketing messages rather than answering
queries or @mentions. Looking at the main corporate account for example, it tweets a
number of product images, links to blogs and competition promos each day, but
generally responds to fewer than 10 @mentions. One noteworthy Twitter campaign
by H&M recently was a Q&A with brand ambassador David Beckham.
H&M Campaign to promote sustainability initiatives

H&M is running its first campaign to promote its clothes recycling scheme as the
retailer looks to raise awareness of its sustainability efforts and encourage more
shoppers to donate unwanted items of clothing

The ads, which run in The Evening Standard and Metro, focus on H&M’s
“Conscious” range of sustainable clothes, as well as highlighting its collection service
which offers customers a £5 discount voucher for every bag of clothes they take into
stores.

After doing GAP analysis (Please refer to page number-) we found there is many
gaps lying between BRAND and CONSUMER. So, now we are making strategies
to fulfill all the GAPS. That will help the brand to increase its sales.

 CUSTOMERS EXPECTATIONS FOR MORE VARIATIONS AND

DESIGNS
H&M provides many options and designs but now a day’s people became trendier and
started expecting more options and designs in their collections. As they want to
change their wardrobe with the change in trend.
So, H&M should start manufacturing more options and designs in their collection.
They should also include more variations in there style. So, they can meet the demand
of customer and fulfill their needs. Ultimately this will help in increasing their profit
and companies growth.

 FOCUS ON MEN’S COLLECTION

H&M have less men’s collection as compare to women’s collection. Male customer
are not satisfied because they find limited options for themselves.

So, H&M should focus on their men’s collection and start manufacturing more
options for their male customer to make them satisfy. That will increase their male
customer.

 FREE SHIPPING
There is certain restrictions in shipping charges.
Free Standard Shipping over $25 (5-9 Business Days)
For orders below $25, the $3.99 shipping and handling cost will be applied. Your
order will be delivered within 5 to 9 business days following the order confirmation.
Additional business days may be required for delivery during peak selling periods.

SOURCE - https://www2.hm.com/en_us/customer-service/delivery.html

Because of these restrictions, customer don’t feel comfortable while shopping online.
So, H&M should provide free shipping and free delivery for all items.
 SPEED OF IT’S WEBSITE
H&M web page server has speed problem. Because of this problem customer who
prefer online shopping have to many face problems like while making payment their
money got cut down but the message pop up shows transaction failed which makes
them not to go for online platform for shopping.
So, H&M has to re-build their web page to increase it’s speed. By doing this customer
will not have to face problem and they will go for online shopping without any fear.

 SIZES OF OUTFIT

H&M has a size chart on their official website which is not clearly defined in their
stores. So, it creates problem for those customer who uses online website for choosing
any outfit and prefer stores for purchase. Because the size shown in the website is not
the in the store. So customers have to face lots of problems regarding their perfect
size, they are unable to find out their perfect size.

So, H&M can focus on the sizes provided online and the same should be there in the
store. They can put correct label of size on the garment and even the same size chart
should be available online. Which can help customer to find out their correct size
without any confusion.

 APPROPRIATE ADVERTISEMENT FOR BETTER COMMUNICATION

Consumer expectations are highly influenced by the statements made by

company’s advertisements. There expectations increases because of the over
promising advertisements done by H&M. which misleads the customer and create
a communication gap between the customer and the brand.

To avoid this communication gap H&M should focus on their advertisements.

Which will not mislead the customers also fulfill their demands.

 POLICY OF RETURNS AND EXCHANGE OF GARMENT

The return policy of H&M is of 30 days from the purchase date to the date when it has
to be return and after that will not be accepted but their competitive brand like GAP
offers 45 days of return policy to their customers. So more are getting attracted
towards the brand GAP. This will decrease the customers of H&M.

So, H&M should focus on their return policy. There are many product like swim
wear, earrings, and cosmetics cannot be exchanged. So customer avoid shopping
these items from H&M.

So, H&M should provide better policies for exchanging the product. This will
increase their customer.

 SPREADING AWARENESS AMONG CUSTOMERS THROUGH

TELEVISION COMMERCIALS

H&M focuses more on social media marketing or campaigns for the promotion of
their products. It hardly focuses on television commercials. So there is lack of
awareness among people. There are many people who don’t have any idea about the
brand.

So, H&M should equally focus on social media marketing and television commercials
as well.

 PROPER COMMUNICATION BETWEEN SALESPERSON AND

CUSTOMER

It is very important to have a well-trained salesperson in every H&M store. Because

salesperson are those who directly interact with customers. Sales person should have
each and every detail of the product that is placed in the store, which will help them to
make the customer aware and informative about the brand.
So H&M should recruit knowledgeable person, those who have to ability to handle
the problems of customers. In every 6 months there should be a training program
conducted for salesperson to enhance their skill and capabilities.

They should also be trained with the change in technology and trends. By doing this
salesperson can have the ability to lure the customer easily and also they can provide
information about any product that customer want. The effort of salesperson can
influence the customer and they will end up buying something form the store.