In Austria, Swedish fashion retailer H&M is looking back on its most successful year in recent history. In 2014 the company’s annual surplus was €18 million, an increase of 44% compared to 2013. In the next quarter H&M Austria expects another slight growth in revenues. The good result is surprising to many experts because the fashion environment is becoming more and more competitive. In particular, the low prize segment makes it difficult for established companies such as H&M to maintain their market positions. Furthermore, online shops are attracting a growing number of customers.
Lars Riegel, a retail expert at Arthur D. Little, points out that the cooperation between H&M and leading star designers is a good way to create a unique brand and differentiate from competitors. He believes that presence at big fashion shows, such as in Paris, is mandatory for H&M. He also advises that H&M expand its online business. Worldwide internationalization is another key factor for a successful future.
The retail market is suffering due to the strong competition with online shopping. Many people order items online from home instead of going downtown. This development is forcing retailers to change their strategies. Retailers open their shops where customers spend their time for example, airports and train stations. The idea is that people spend their ‘waiting time’ exploring the shops. Global Management Consultancy, Arthur D. Little’s latest research found that many hub airports already make more than 50 % of their revenues with this kind of business. The trends have been set in Asia and the US and Europe’s train stations and airports have recently discovered the new markets. Nevertheless, the Arthur D. Little expects predict that the cooperation between shopping and public infrastructure is going to have a successful future.
Tom Becker, Veit Butterlin and Carsten Kahner of Arthur D. Little outline how companies can integrate quality management into the value chain. Product and service quality have never been more important in today’s world of globalisation, expanding consumer rights, and customer expectations. Quality management is evolving into a three stage process: Assurance, Empowerment and Consumer Delight. These respectively cover minimising defects, encouraging a company-wide holistic approach to quality management, and using quality management as a facilitator between Marketing & Sales, Manufacturing and R&D. Companies must embrace these new concepts now that quality is no longer a policeman but a business partner.
An article about the policy agenda that was set at the Central Economic Work Conference. Antoine Doyon, Associate Director of Arthur D. Little is quoted saying, “While China pays more attention to increasing domestic demand, private and foreign companies will benefit.” He says that service sectors such as fast-moving consumer goods, logistics, IT outsourcing and industry sectors with high technology content and added value will bring opportunities for foreign investors, while capital-intensive and labour-intensive sectors will not fare as well. He says that to benefit from a consumption-driven service-based economy, foreign companies will need to re-examine their unique selling propositions and pay extra attention to product and service features that Chinese customers will like.
An article about Arthur D. Little’s viewpoint on ‘U-Channel Retail’. Tomorrow’s customers want to complete purchases when and where they want – and rapidly evolving mobile and online sales platforms enable this. Francois-Joseph Van Audenhove, Partner, Arthur D. Little Benelux, says “The U-Channel challenge is both a short and long-term race. This revolution will profoundly remodel the retailing landscape in the long-run but also requires taking appropriate measures today. Retailers must begin to scope the field, understand the challenges at hand and set directions for future developments.”