The Comparison of Zara and H&Ms Internet Marketing - Case Study Example

The Comparison of Zara and H&M"S Internet Marketing Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Table of Contents Table of Contents 1 The Comparison of Zara and H&M"S Internet Marketing 3 Condition 3 The Fashion Industry 3 The US Retail Industry 4 The Apparel Retail Industry 4 Future of the Global apparel retail industry 6 The Use of Social Media In The Fashion Industry 6 Use of Internet in the Market 8 Market 12 Customer Focused 14 H&M 14 Customer Targeting 14 Websites Contents in Different Locations 15 Customer Accounts 16 Zara 16 Customer Targeting 16 Websites Contents in Different Locations 16 Customer Accounts 17 Cross Promotion 17 Zara 17 H&M 18 References 20 The Comparison of Zara and H&M"S Internet Marketing Condition The Fashion Industry The fashion industry is ever changing, hence the need to have a strategy which ensures that fashion retailers are able to communicate to the market about the latest fashion designs in the market. In addition to this there is a greater need for the retailers to ensure that they are able to sell their products hence being able to compete competitively in the market. This has given rise to the uncontrollable need to adopt internet marketing strategies in the fashion industry. The use of the internet in the business has led to the creation of a substantial value. The figure below shows the value created by internet search in several countries. (McKinsey & Company, 2011, p.6) The US Retail Industry The global retail industry is growing at a great rate. The value associated with the industry is also high. For instance, the retail sales at the US retail industry are valued at 368.79Billion US dollars. The growth of the industry is US can also be seen from the figure below. (Ycharts 2012, p.1) The Apparel Retail Industry The global apparel retail industry is major industry going by its value in the market. As at 2009, the value of the industry was an outstanding 1.0315trillion US dollars. The following table shows the exact values as from 2005 to 2009. (Data Monitor 2010, p.10) As seen from the data, the global apparel retail industry has been growing. This is shown better in the graph below. (Data Monitor 2010, p.10) The United States controls the largest part of the global apparel retail industry, with a 37.3 % share of the industry, as seen in the table below. (Data Monitor 2010, p.12) Future of the Global apparel retail industry The industry is expected to grow by 12.9 % from 2009. As at 2014, the total value of the industry is expected to be 1.1628 Trillion US Dollars. This can be seen from the table below. (Data Monitor 2010, p.35) The Use of Social Media In The Fashion Industry The following figure shows a section of the Facebook page of H&M. From this page, it can be seen that H&M has been able to reach out to 12,664,563 people on earth. This is a very great number with respect to marketing. This is a perfect use of internet marketing in the fashion industry. The Facebook page of Zara shown below is no different from H&M’s. Via Facebook alone, the company has been able to reach out to 15, 068,874 people who is also a very encouraging number with respect to marketing. As pointed out above, both companies also do have a great web presence using their company websites. Via the websites and social media, the companies are able to advertise their products, maintain a two way communication with the market and also create market awareness of new products in the market. Use of Internet in the Market On the other customers have a resorted to the use of internet to shop. More and more customers are using the internet to purchase various products (Moon 2004, p.104). Ideally, the internet is a very important tool which determines the purchasing patterns of online shoppers (PWC 2010, p.37). This comes out clearly after looking at the following data by PWC on the likelihood of An American shopper making a purchase after making an online search. (PWC 2010, p.37) The number of customers looking for fashion related products on the internet is also ever increasing; and consequently the efficiency of internet marketing. Looking at the graphs below, it can be seen that a large number of people use the internet to search for fashion related products, with at least 59% of men and 70% of men searching for clothing on the internet in 2009 and 2010. The figures are expected to grow over time with online retailing in the United States expected to grow by 10% in the next 5 years and internet based shopping expected to account for 8% of the total sales made by retail stores in the United States by the year 2014. For this reason, the use of internet marketing by Zara and H&M is expected to grow tremendously. Looking at the sales of both Zara and H&M, it can be seen that the volumes are high in addition to the fact that they are growing year in year out, an indication that the online marketing strategies employed are having an impact on the turnovers. (Zara financial report, p.1) (H&M sales, 2012, p.1) Market While internet marketing is concerned, there is no limit to the market on which an organization can venture into. With the emerging trends in online purchases and deliveries, it has become possible for online shoppers to get the products which they need. However, both companies have a strong market presence in the United States, which forms one of the biggest markets for both organizations. The companies also have stores in Europe and Asia, hence being able to tap into the international market. The companies target markets are females, male and kids whose purchasing trends in the market are shown in the figure below. Women 51.8% of all cloth ware purchases Men 32.5% of all cloth ware purchases Children 15.7% of all cloth ware purchases (Data Monitor 2010, p.11) Looking at the internet marketing strategies of both Zara and H&M, it is evident that both of them have adopted the various emerging trends that emerge at the onset of internet marketing. This enables them to maintain a strong web market presence as compared to other players in the fashion industry. The following elements are a part of all the online marketing strategies of both Zara and H&M. Online shopping- Online payments Delivery In order for the companies to be able to serve their respective channels, they have some of the best distribution channels in the fashion industry. Zara has over 5500 stores. Zara operates in 82 locations (markets) worldwide This illustrates the strong global market presence that Zara has. Its stores act as distributions channels for its products. H&M has 2600 stores around the world. H& M has ventured into 47 locations (markets) in the world. This has enabled H&M to remain competitive in the global fashion retail. It does not have a strong global market presence as compared to Zara. However, it is doing great and its stores acts as distribution centers for both physical and online buyers. Customer Focused Online marketing strategies devise mechanisms of reaching out to the customer; which forms the strategies of customer focusing (Hou & Rego 2002, p.2). H&M Customer Targeting An online marketing system is able to sell more if it has special products targeted at specific people (Petreson, Balasubramanian & Bronnenberg 2003, p.330). H&M targets Ladies, men and kids. On its website, it has displayed various fashion products targeted at the three classes of people. On its main page of its website, Zara has links to all its products in line with its target market. The following figure shows a section of its website indicating the above information. Customer focus, key words ladies, men and kids (H&M, 2012, p.1) Websites Contents in Different Locations The information displayed on the various websites which H&M runs in different countries have different information, each of which is meant to capture a certain audience. For instance, the difference between the H&M’s US website http://www.hm.com/us/ and the company’s Britain’s website http://www.hm.com/gb/ is that the US website has the picture of David Beckham, who is a model for the company. This enables the company to reach out to the young American market which has a high regard for the professional footballer. Customer Accounts In order to give the customer a personalized service, both companies have online customer accounts on their websites. With the user accounts, the users are able to search for the products which they need, keep a track of their purchases, get alerts on specific products on offer and lastly communicate with the respective organizations. Zara Customer Targeting Just as H&M, Zara also targets women, men and kids. The main page of its website has links to various products for the three target markets. Customer focus, keywords woman, man, kids (Zara 2012, p.1) Websites Contents in Different Locations The variation of the contents of the website depending on the location is not portrayed in Zara’s website as it is at H&M’s. For instance, comparing the US website http://www.zara.com/webapp/wcs/stores/servlet/home/usand the United Kingdom’s website http://www.zara.com/webapp/wcs/stores/servlet/home/uk, there is no difference which can be identified. Customer Accounts Zara’s website also has customers accounts which serve the same purposes as H&M’s which have been pointed out earlier. Cross Promotion Both Zara and H&M do promote products from other companies. Basically, the organizations cross promote famous products which are associated with the products which they sell. For this reason, they run materials for other products which are associated with fashion. Zara Apple Zara cross promotes products from Apple. The Apple products which it promotes include Ipad, Iphone and their respective applications. Android Zara also cross promotes Android products. Cross Promotion (Zara, 2012, p.1) The above figure shows the cross promotion of the Iphone on Zara’s website. Telefonica Telefonica is Zara’s technical partner and has been providing the organization with technical solution for along time, hence the reason as to why Zara promotes it. H&M Apple H&M also cross promotes Apple’s products. It promotes the Ipad, Iphone and their respective applications. UNICEF H&M is in collaboration with UNICEF to help needy children in the world. The project is dubbed ‘All forChildren’. H&M will donate a total of 7.99 million US dollars to the project. ADR, Anna Dello Russo H&M promotes fashion products made by the fashion icon and also sells the products in its stores. The deal was sealed on a party hosted by H&M at Paris. H&M also promotes environmental sustainability. Ideally it is one of the most sustainable retailers in the market. To do this, the organization works with the environment related organizations for instance the UNEP. References Data Monitor, 2010. Global Apparel Retail, 1-39 H&M, 2012. H&M, Viewed on 1st November from < http://www.hm.com/us/ > Hou, J., & Rego, C., 2002. Internet marketing: an overview, University of Mississippi, pp.1- 20 McKinsey and Company, 2011. The Impact of Internet Technologies Search, pp.1- 58 Moon, B., 2004. Consumer Adoption of the internet as an information search and product purchase channel: some research Hypotheses, International Journal of Internet Marketing and Advertising, Vol.1, no.1, pp 104- 119. Petreson, R., Balasubramanian, S., & Bronnenberg, B., 2003. Exploring the Implications of Internet for Consumer Marketing, Journal of Academy of Marketing Science, Vol.25, no4, pp.329-346 PWC, 2010. Measuring the Effectiveness of Online advertising, PWC, pp.1-68 Ycharts 2012. US retail,Sales, Viewed on 1st November from < http://ycharts.com/indicators/retail_sales/chart#series=type:indicator,id:retail_sales,calc:&zoom=5&startDate=&endDate=&format=real&recessions=false > Zara, 2012. Zara, Viewed on 1st November from Read More