2. Introduction
Hugo Boss are a market leader in the luxury fashion industry. They focus on developing
premium fashion for their consumers. The company generated revenues of €2.8 billion in the
year 2015, cementing their place as a leader in this industry. The brand consists of 4 different
sub brands – BOSS Black, BOSS Green, BOSS Orange and HUGO, each catering for a
different target market. In Ireland, only BOSS Black and BOSS Green can be found in the
flagship stores whereas the other two are solely distributed through wholesale1
.
The Irish retail clothing industry was worth €3.7 billion in 2016, showing growth of 1.6%
compared to 20152
. This shows the potential that Hugo Boss have to exploit. In Ireland alone
last year, Hugo Boss generated €1.4 million in revenues, meaning they have 0.04% share of
the whole Irish retail clothing industry.
Hugo Boss is in the luxurious end of the retail industry competing with brands such as Ralph
Lauren, Calvin Klein and Armani. It’s a fragmented industry with numerous brands competing
for market share, consequently it’s difficult to pinpoint any single main competitor.
Having analysed the industry, as well as Hugo Boss’ current situation, it became apparent there
was both a need from the company’s point of view but also a demand from the customer’s to
exploit two recent phenomena – click and collect and m-commerce.
From this, the company’s objectives were formed.
1. To grow overall sales by 10% over the next year.
2. To introduce click and collect in Ireland over the next quarter and see at least 10,000
uses in the following year.
3. Grow m-commerce sales in Ireland by 15% of overall sales over the next year.
Finally, a strategy to achieve these objectives was developed. Having noticed this gap in Hugo
Boss’ strategy, and following an in depth analysis of market trends, the author felt he could use
1
About
Us.
http://group.hugoboss.com/en/group/about-‐hugo-‐boss/group-‐profile/
2
Clothing
Retailing
Ireland.
October
2016.
http://0-‐
academic.mintel.com.ditlib.dit.ie/homepages/sector_overview/7/
3. this to develop a strategy that strengthened Hugo Boss’ presence, as well as giving them a
competitive advantage in the market place.
4. 1. Situation Analysis
SWOT
Key issues arisen
• Lack of focus on mobile
• E-Commerce site doesn’t deliver to Ireland
• No customer interaction across digital channels
5. Unique Selling Point
In what is an extremely competitive industry, it’s hard to have a USP that differentiates
you with the exception of the logo on the clothing. It’s therefore vital that companies do
something that distinguishes them from their competitors. Hugo Boss’ unique selling point is
the experience that they provide to their customers. They pride themselves on maintaining
world class standards no matter what store you go in to, anywhere in the world.
Rationale:
1. Staff training with an online course to ensure optimal product knowledge.
2. Model Store each month to ensure all stores are aesthetically pleasing.
3. Random visits from area manager to ensure high standards at any given time.
4. CRM database – birthday gifts, event invites and vouchers.
6. Customer Analysis
In order to better understand our target market, three personas have been developed. Each one
represents a different market segment and will give an insight into the sub brands they like and
the most efficient way to target them.
Persona 1
Persona 2
8. Competitor Analysis
As mentioned previously, in what is an extremely fragmented industry, it is difficult to pinpoint
any main competitor. Two global brands in which Hugo Boss have come up against in recent
years are Ralph Lauren and Armani.
Ralph Lauren are the self-proclaimed brand that redefined American style for the last 40 years.
They believe they are the innovators of lifestyle and encourage their customers to partake in
this lifestyle.3
Similarly, to Hugo Boss, they offer different product ranges for different
customer tastes. Offering styles from loungewear to casualwear to formalwear, undoubtedly
they are a huge competitor to Hugo Boss.
Armani, an Italian brand, originally became known due to their elegant suits. Having grown as
a brand, they have since spread into the more casual side of things, using their expertise to
provide high quality sportswear as well as day to day clothing. They must not be ignored as a
competitor to Hugo Boss.
3
About
Ralph
Lauren.
http://global.ralphlauren.com/en-‐
us/about/Pages/default.aspx?ab=footer_about
9. Hugo Boss Ralph
Lauren
Armani
Website
Ranking
(Worldwide in
clothing
industry)
#347 #72 #391
Total Visits
(last 6 months)
2.2 million 5.8 million 1.9 million
Avg. visit
duration (mins)
02.47 05.54 02.21
Pages per visit 4.3 7.32 4.6
Facebook likes 7.7 million 8.5 million 7.8 million
Twitter
Followers
621k 1.8 million 2.9 million
Instagram
Followers
1.6 million 4.5 million 6.1 million
It can be clearly seen4
how Hugo Boss are performing online in relation to two of their main
competitors. Overall, they rank higher than Armani but are significantly behind Ralph Lauren.
4
Figures taken from Similar Web as at 10th
December 2016.
10. 2. Objectives
Business Objectives
• To grow overall sales by 10% over the next year.
This objective goes without saying – every brand wishes to increase sales. 10% is thought to
be a realistic figure as it is felt that this strategy will in turn help sales grow significantly.
Marketing Objectives – Market Penetration
• To introduce click and collect in Ireland over the next quarter and see at least 10,000 uses
in the year following.
By following this market trend, it will aid in Hugo Boss’s desire to increase sales. It will allow
customers to shop from the comfort of their own home but still get them in to the store.
• Release a mobile app and grow m-commerce sales in Ireland by 15% of overall sales over
the next year.
In order to achieve the preceding objectives, Hugo Boss must keep up to date with
technological advancements as well as customer preferences. M-Commerce is something that
is huge at the minute and will be the epicenter of this strategy.
Grow
Sales
Grow
M-‐
comm
sales
Click
&
Collect
11. SMART Framework
Specific
Who?
In order to achieve the three different objectives, it’s important to focus on the consumers who
generate the most revenue. In this case it’s only 20% of the market but as a result, it allows for
our strategy to be a lot more targeted. Customer acquisition will undoubtedly occur although it
won’t be the predominant focus.
What?
By virtue of targeting this segment, we hope to entice them to purchase via m-commerce while
utilising click and collect and simultaneously growing net sales. With the use of click and
collect, it forces them to come in to store and allows staff to try cross sell, hence further
increasing sales
Which?
The click and collect system must be first set up in Ireland. It’s something that’s already in
place in the UK and has been proved to be effective. A logistics system must be put in place to
ensure goods are in store by the required time and date. Hugo Boss must also hire a developer
to build the app.
Why?
It’s a well-known market trend at the minute that customers are shopping more online and even
more so on mobile. If Hugo Boss don’t keep up with these trends they will see themselves
falling behind. With the use of the click and collect system in tandem with a proposed mobile
app, it will increase customer retention and in turn increase sales.
Measurable
With click and collect, it’s going to see massive growth as it is a new feature for the company
in Ireland. The m-commerce sales can be easily measured. At the year-end the two sales figures
can be compared to see if the goal - 15% of overall sales - is reached. The total sales can also
be easily found. It might be a good idea to do a comparison at the end of each quarter to see
how close they are to achieving these goals. In relation to customer retention element we can
12. use the Recency, Frequency and Monetary (RFM) analysis. This tracks how recent a specific
customer purchased, how often they purchase and the amounts they purchase.
Attainable
At first glance, a 10% increase in sales seems more than attainable. With the introduction of
Click and Collect, it will allow customers to purchase product lines such as Hugo and Boss
Orange which are only available through wholesale here in Ireland. With a loyal customer base,
customers are often forced to travel to the UK to purchase the HUGO brand. With click and
collect this eradicates the need for that and allows them to purchase more frequently. This not
only increases sales but also customer retention. The mobile app keeps up with occurring trends
and will be favored upon by consumers. This will also lead to increased sales due to its
convenient nature.
Realistic
The mobile app is something that is inevitably going to happen. By building it at this early
stage it will give Hugo Boss a serious competitive advantage in the market. Click and Collect
has been utilized by various brands such as River Island and Topshop here in Ireland and has
been proven to be effective. Although these brands aren’t in competition with Hugo Boss it
still proves it is a realistic objective. 10% is definitely a realistic figure to achieve. In a year
time frame it gives the m-comm sales a chance to grow while maintaining current sales in the
bricks and mortar stores.
Timely
One year is an ideal amount of time for the click and collect to take off. It allows for efficient
promotion via social media channels, in store promotion and email marketing. The mobile app
takes 3 months to be created and with the hype around it, the response will be immediate.
13. RACE
REACH
Objective Media Type Platform Comment
Build awareness of
the click and collect
store
Paid Facebook
Use Facebook ads to target
different segments of the
target market. Consumers
can be targeted by interests,
demographics, location or
connections.
Paid Twitter
Promote tweets to a larger
audience, targeting based on
device, gender, location or
via other channels (e.g. CRM
lists).
Paid Instagram
Promote photos to users
based on demographics,
interests and location.
Owned SEO
Use content marketing,
keyword search and ensure
site is mobile optimized to
drive traffic.
Owned Email Database Use the existing database of
clients to inform them about
the app. Potentially give
them first access to show
appreciation.
14. ACT
Objective Media Type Platform Comment
Encourage users to
avail of Click and
Collect
Owned Social Media Use various social media
accounts to promote offers to
entice customers to download
app and avail of click and
collect.
Owned Website
Pop-ups on the site to inform
visitors of Click and Collect
and Mobile App
Owned
Email Database Contact existing customers,
giving them a discount code as
a means of call to action.
CONVERT
Objective Media Type Platform Comment
To drive sales Owned CRO
Use analytics and user
feedback to ensure maximum
satisfaction regarding UX.
Owned Marketing
Automation
Allows for various tasks such
as lead generation, cross-
selling, customer retention to
name a few. All of which
increases revenues.
Owned A/B Testing
Testing subject lines and time
of day for emails, colours on
a page, length of the payment
process etc. These can
enhance a customer’s UX, in
turn leading to a sale.
15. Owned
Landing page
optimisation
Effective optimization can
increase conversions faster by
moving the customer along
the conversion funnel more
efficiently.
ENGAGE
Objective Media Type Platform Comment
Advocacy Earned Social Media
Encourage customers to
share their experiences
both online and in store
16. 3. Implementation
Strategy – Mobile Optimization
“The Mobile Movement”
- The following strategy is based off the RACE from the previous section.
Having conducted a situational analysis and having derived upon Hugo Boss’ three key
objectives, a strategy has been formed to help achieve these objectives. This strategy will be a
three step process and in turn, will help Hugo Boss reach their main objective of a sales increase
of 10%.
Concept Why? Tools Metrics Effect for
Hugo Boss
Allow customers
to build a profile,
build outfits to
create their ideal
look and
purchase this
look there and
then.
Enhances customers
shopping experience
Acts as a means of
promoting Click and
Collect in Ireland.
Keep up to date with
trends around mobile
technology.
Push
notifications
Social
Media
Existing
database
SEO
Marketing
Automation
Offers
Sales
App Downloads
Duration on app
Conversions
Gender
Age
UPT
NSPT
Insight into
customer
tastes and
preferences
Inventory
control
information
More
customer
information
than ever
before
17. Augmented Reality App
In order to grow the click and collect service, we must give the customers a reason to use it.
An augmented reality app would enable customers to build an avatar based on their height,
weight, build, skin tone, hair colour and other bodily features, see how clothes look on them
and ultimately purchase through the click and collect m-commerce store. Research shows that
88% of Irish people aged between 16-64 own a smartphone and of those, 34% say mobile is
the most important device for getting online5
. With the increasing use of mobile and subsequent
growth of m-commerce, combined with the recent explosion of AR/VR, an augmented reality
app will not only show Hugo Boss’ responsiveness to customer preferences but also enable
them to sufficiently promote their new service and in the longer run, increase their sales. A
report published by Mintel disclosed how the main reason for returns from online purchases
was because of the wrong fit6
. The AR app would eradicate this problem and leave customers
with a more positive shopping experience, something in which Hugo Boss pride themselves
on.
With this app, Hugo Boss will be provided with more information than ever before. Information
such as their gender, height, waist size, chest size but also the area they live, and what clothing
preferences they have. This will not only help with more targeted marketing strategies but
could potentially have a greater impact on inventory control in store. They can make
assumptions based on the area about the most popular sizes, styles and consequently save
money on wasted stock.
Promotion of AR App
In order to entice customers to download the app, it will be promoted across all social media
channels. This not only targets existing customers but also acts a form of customer acquisition.
Special offers will be used (e.g. 10% off your first click and collect purchase when you
download the app) to further entice customers to download. This will not only increase app
downloads, but also act as a call to action. Once the app is downloaded, push notifications and
marketing automation tools will be used in order to increase various KPI’s (discussed later)
and subsequently, overall sales.
5
Shane
O’Leary.
Irish
Digital
Consumer
Report
2017
6
Clothing
Retailing
Ireland.
October
2016.
http://0-‐
academic.mintel.com.ditlib.dit.ie/homepages/sector_overview/7/
18. Also, by virtue of using the already existing email database, Hugo Boss can contact their
customers, informing them of the new app. They, again, can offer them various offers to entice
them to purchase from the click and collect store (perhaps something different to the previously
mentioned offer to show customer appreciation). Offers such as free tailoring on whatever they
purchase online will get them into the store and hence provide them with not only a positive
online experience but also a positive in-store one.
With the social impact of AR, it will also entice customers to create user generated content and
promote the brand for Hugo Boss. This hand in hand with the growing popularity of Instagram
as a photo sharing site will entice customers to share the looks they had just created on the app.
This again will have a positive impact on sales and essentially act as a free form of influencer
marketing. It will also deal with the issue that arose in the situation analysis regarding
interaction across social media
Timeline
Fig.1.
19. Hugo Boss will begin building the app in January and following 3 months of rigorous testing
and improvements, the app will be released on the 1st
April7
. Following the design and coding
of the app, three rounds of testing will occur to ensure optimal customer satisfaction.
Fig.2.
Following the build of the app, sufficient promotion will take place. Hugo Boss will begin
promotion as the final round of testing is taking place. This promotion will occur across all
social media platforms, instore and also via email. A campaign hashtag #MakeMeTheBoss will
be used. This hashtag gives consumers the idea that they have some form of control and will
look favourably upon it. The idea of this is so that the hype will be built for when the app is
released, leaving customers in anticipation for the release. Different forms of evaluation, both
key metrics and m-commerce sales will be evaluated throughout the year. A huge social media
push will occur throughout July and August. It is the intention for this to be across Facebook
and Instagram whereby customers share a photo (using the same hashtag) of their key look
purchased via m-commerce site (used on the app) and a prize will be rewarded for the winner.
This coincides to the aim of increasing m-commerce sales but also increasing customer
interaction. 8
7
Figure
1.
8
Figure
2.
20. Tools
Initially, Hugo Boss will use social media and email marketing to promote the app. Special
promotions will be used to entice customers to download the app. From then on, marketing
automation tools will be used to increase sales and push notifications (should the customer turn
them on) will be used to inform customers of sales, events and new releases, all based on their
preferences.
Key People
Hugo Boss have a marketing team located at the UK and Ireland head office on Regent St. in
London. They will, however have to hire an app developer who is savvy with AR to develop
this app. Click and Collect is already in place in the UK so the current team will have the
knowledge as to how best implement in here in Ireland.
Budget/Costs
An AR app for an online store will cost somewhere in the region of $25,000 9
. Brands generally
allocate somewhere in the region of 5-10% of revenues to marketing10
and of this percentage,
up to 35% of it can be allocated to mobile marketing 11
. Taking these assumptions and applying
them to this case, Hugo Boss generated €1.4 million in Ireland in 2016. This would make the
marketing budget somewhere in the region of €140,000. Of this €140,000, (assuming 35% is
allocated) would mean €49,000 is available for mobile marketing alone. This would allow for
the app to be built but also free up some money for relevant promotion to be carried out for the
app. It could also enable Hugo Boss to purchase a push notification or automated marketing
software to enable them to carry out their duties more efficiently.
9
How
much
does
it
cost
for
brands
to
make
an
augmented
reality
app
for
their
products.
https://www.quora.com/How-‐much-‐does-‐it-‐cost-‐for-‐brands-‐to-‐create-‐an-‐augmented-‐
reality-‐app-‐for-‐their-‐products
10
How
much
should
companies
budget
for
marketing?
http://frog-‐dog.com/how-‐much-‐
should-‐companies-‐budget-‐for-‐marketing/
11
How
should
you
budget
for
marketing
in
2017?
http://www.webstrategiesinc.com/blog/how-‐much-‐budget-‐for-‐online-‐marketing-‐in-‐2014
21. Duration
It can take 2-3 months to build an augmented reality app12.
In this period, the click and collect
store can be implemented here in Ireland, allowing loyal customers to test it out before anyone
else. They can also use this time to wisely promote the click and collect and build sufficient
hype around the release of the new app. It’s also important to note that although it may take 3
months to develop the app, rigorous testing must then be carried out to ensure maximum
satisfaction around the consumers user experience.
Metrics
KPI’s that are proposed to be used are Units Per Transaction and Net Spend Per Transaction.
The higher both of these are, the higher sales will subsequently be.
Other metrics will include number of app downloads, duration on the app, number of pages
visited on the app. All these will give Hugo Boss an indication as to how the app is performing.
Demographical metrics such as age and gender will give Hugo Boss an indication as to what
target market is responding the best against which hasn’t responded as positively.
Behavioural metrics such as traffic sources will also give us an indication as to what platforms
are working in regard to promotion.
12
How
much
does
it
cost
for
brands
to
make
an
augmented
reality
app
for
their
products.
https://www.quora.com/How-‐much-‐does-‐it-‐cost-‐for-‐brands-‐to-‐create-‐an-‐augmented-‐
reality-‐app-‐for-‐their-‐products
22. 4. Creativity
The thought process behind the design was based purely on the situational analysis and the
evaluation of current market trends.
ROPO
• Research Online Purchase Offline
• Research Offline Purchase Online (Showrooming)
Both can have an effect on sales, be it the offline purchases having an effect on e-commerce or
online purchases reducing the bricks and mortar sales.
M-Commerce
Although traditional e-commerce is still as popular as ever, consumers are now turning to their
phones to dispose of their income. Due to its convenient nature, people will continue to use
this as opposed to their desktops or laptops. It is therefore important that companies have a
responsive website and ensure the UX is a positive one.
Click and Collect
As mentioned above, people are tending to shop online whether that be on their phones or
desktops. Consumers tend towards this method of delivery as more often than not it is free but
also more convenient. It adds value to the customer’s experience online simply because it
enables them to pick it up any time that suits and means they are not confined to their home
while waiting on a delivery.
Instagram
Due to Instagram’s photo sharing capabilities, it has become a means of brands expressing their
personality to their following. Many consumers turn to Instagram for inspiration regarding
ROPO
M-‐Comm
Click
and
Collect
Instagram Influencers
23. fashion pieces. The use of influencers (discussed below) across this platform in particular can
have a huge impact on the target market.
Bloggers/Vloggers/Digital Influencers
A huge trend in every industry, it is something that cannot be ignored. Different to the
traditional celebrity endorser, these influencers utilize their large following to promote a brand
across their social media. They have a huge impact on many consumer’s brand choices,
providing the source is trustworthy. It’s important to choose an influencer correctly, as the
wrong one could have a detrimental effect on a brand.
Having determined these trends, it became clear that there was gap in Hugo Boss marketing -
the lack of use of mobile in their overall strategy.
Mock Up
First step of registration will be for the user to upload a full body image. (Sims snapshots used
to demonstrate the concept more efficiently). You will then enter dimensions such as height,
waist size, chest size, shoe size etc. so that the app can determine what size you are in each
style of clothing. After all relevant information is provided, it’s then time to start dressing.
24. The app will have the same layout as the website. When you are viewing items of clothing you
will have two options – ‘see what this looks like on me’ or ‘take me to the checkout’ (A/B
testing will be used to determine which call to actions button work best). In an attempt to
increase KPI’s mentioned earlier, it’s necessary to build outfits for customers, just as if it were
in store. Essentially, what this is doing is cross selling via mobile. The call to action then
enables customers to purchase the goods and aids Hugo Boss in reaching their objectives.
Conclusion
Having conducted an in-depth situation analysis, a huge gap was spotted in the market – the
use of mobile. Hugo Boss, being a market leader, most certainly have the resources behind
them to exploit this. It will not only benefit the brand in regard to sales figures but more
importantly, it will enhance the customers shopping experience. This strategy will inevitably
give them a competitive advantage in the marketplace and will make mobile shopping a
memorable experience for the consumer. The next step… implementation.
