Distribution Channels at Clothing Retailer Hennes & Mauritz

Distribution Channels at Clothing Retailer Hennes & Mauritz

A key section in selling success is the strength of a smart sets diffusion impart. Kerry Capells (2002) Business Week article looks at Sweden-based Hennes & Mauritzs (H&M) sourcing and inventory direction strategies and their reliance on distribution channel partners. H&M has developed a extraordinary distribution channel dodge to compete with better entrenched retailers including Gap, Old Navy, Zara and FCUK.

H&M ware Strategy

Understanding H&Ms distribution strategy requires a clear intellectual of their oerlap philosophy and strategy. Like Gap and other habiliment retailers, H&M foodstuffs to a particular segment of the bearing consumer market. H&Ms philosophy is Fashion and quality at the crush price (H&M, 2004). H&M keeps up with its competitors by providing a variety of styles from updated classics and demeanor basics to cutting-edge fashion trends (H&M, 2004).

Kotler defines the product as a combination of goods and services (Kotler et al, 2001). H&M seeks a product edge by providing affordable fashion lines similar to its competitors, but with a fast turnaround from practice to production to sales floor (Capell, 2002). Capell focused on this merged distribution channel in his article.

Distribution Channel Outline

Marketers a good deal put forward to the fourth P, place, as placement, logistics or distribution. Marketers must create a place or a way for logistics and physical actors line to get a product to market and into the hands of scrape consumers (McColl-Kennedy and Kiel, 2003). A distribution channel refers to the type of intermediary or linkage amidst manufacturing businesss and consumers. A one-channel distribution network involves only the retailer between producer and consumer. Direct distribution occurs when the producer directly supplies the product to the buyer. The choice of distribution channel depends on a variety of factors, including the type of product. While not either clothing retailers use direct distribution models, H&M and its competitors in the low- and mid-range clothing market use this model to hold up low costs and a fast time to market (Capell, 2002).

Unlike many industries, time-to-market is critical to retail clothiers, as trends and fashions can deepen quickly. To minimize time-to-market, H&M employs a team of in-house numberers in 21 production offices worldwide that work to forecast trends and move up inspiration for clothing designs in everything from street trends, to films, to flea markets (H&M, 2004). From its headquarters in Stockholm, the come with directs a rapid-response manufacturing process to capitalize on design trends immediately (H&M, 2004). H&M moves designs through production and into its retail sales channel with a three week to sextette month lead time. With low-wage, high-volume production in China and Turkey, the company can maintain low input costs and often outfit its stores with the latest trends within a month of the initial design (Capell, 2002). H&M constantly redefines its distribution strategies in response to changing retail market conditions and production conditions in its worldwide manufacturing centers (Capell, 2002). This adaptation ensures that the company can to improve the expertness of its production flow.

This model has direct application in H&Ms retail stores where it sells its products to consumers. H&Ms corporate buyers in Sweden actively manipulate its inventory, researching itemized sales reports by country, store, and, most importantly, type of merchandise routine (Capell, 2002). The buyers use this information to reallocate production or shipments, simplification potential overstock problems. The itemized reports also allow buyers to maintain a high level of turnover, keeping apparel on the sales floor up to date.

Enhancing the companys competitive advantage in this area, the integrated direct distribution channel ensures that H&M stores amaze new shipments daily, giving the company further control over responses to supply and demand solecisms (Capell, 2002).



The company estimates that each store receives between 500 and 1,000 new items daily, with total sales of over 550 cardinal items annually company-wide. For example, if a particular fashion proves exceptionally usual to men in the U.S., but not in Europe, the company can shift inventory in that product from European stores to meet demand in the U.S. The channel also enables H&M to respond to market segment changes. When its $39 knee pants line proved too upscale for inner urban center substances, H&M used its integrated channel to shift that inventory to suburban locations and rotate new inventory into the mall stores (Hjelt, 2004).

As with virtually every industry, H&Ms continued success and successfulness depends on efficient distribution channels. H&M has efficaciously incorporated its supply chain and retail distribution channels into its business strategy. As the company expands more heavily into the U.S. market, its unique streamlined distribution channel will be a critical component of its success.

Works Cited

Capell, Kerry. (2002, November 11). Hip H&M: The Swedish retailer is reinventing the         business of affordable fashion. Business Week. 106-109.

Hjelt, Paola. (2004). Will $39 Pants = Profits? H&M was too stylish for many mall shoppers.         Fortune.com. Retrieved August 23, 2004 from the World Wide entanglement at:         hypertext transfer protocol://www.fortune.com/fortune/subs/article/0,15114,395434,00.html

H&M. (2004). About H&M. HM.com. Retrieved August 23, 2004 from the World Wide Web         at: http://www.hm.com/us/hm/facts_history/srt.jsp

Kotler, P., Armstrong, G., Brown, L. and Adam, S. (1998). Marketing. Sydney: Prentice Hall.

McColl-Kennedy, J.R. and Kiel, G. (2003). Services Marketing. Hoboken, NJ: Wiley and Sons.

If you trust to get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .