Consumer goods companies, such as textile companies, seek to create and encourage purchasing actions. A perspective, linked to marketing and advertising, where multinationals like Inditex or H&M are increasingly banking on campaigns with famous people to boost their sales.
This is the case of Zara, which has just launched a campaign with models Cindy Crawford and her daughter Kaia Gerber. The same thing happens with another Inditex brand, Massimo Dutti, led by actress Laetitia Casta. Its rival H&M has also opted for the same path, with the singers Charli XCX or Arca or even with the model Lila Moss (daughter of Kate Moss).
The Swedish multinational assures that this commercial approach is very effective. A few weeks ago, she launched an advertising campaign with the creator of the Brat concept, in which Charli XCX wore a coat with prints imitating leopard skin. A garment that sold out in just a few minutes, as H&M CEO Daniel Ervér admitted to Reuters. That this company uses the image of the singer – who also performed at a corporate event in London – is not a coincidence, H&M is trying to change the image of the brand and is looking for a new profile of customer base. And to do this, it accelerated its marketing spending.
“We are changing and the most important step is to update our clothing to make it more relevant, so that it has a more current aesthetic. This is where we function best and depend least on the weather,” Ervér surmised in the aforementioned interview.
H&M, like other multinationals, is influenced by whether it’s raining, cold or hot, and whether the temperatures match the clothes they have in their stores. In fact, last summer was bad for most companies, as storms that hit much of Europe resulted in their summer collections going unsold. In the case of the Nordic company, its sales remained frozen, since between June 1 and August 31 they practically reflected those of the previous year and remained at the equivalent of 5.2 billion euros .
In this economic data, H&M’s main problem is its operating margin – the difference between what it earns and what it spends – because it is declining. During the summer quarter, this margin remained at 5.9%, compared to 7.8% a year ago.
Spend more on marketing
In an attempt to reverse these financial figures, H&M is spending more on advertising. In its results report for the first nine months of the year, it explains that the increase in marketing spend over the summer was “significant”. “It aims to strengthen the brand in the long term, starting with the launch of the fall collection,” he adds. “We are already seeing that the efforts we have made are bearing fruit. »
The multinational does not give an exact figure but emphasizes that among the commercial and administrative expenses, which amounted to almost 550 million Swedish crowns (nearly 50 million euros), the majority corresponds to this marketing activity.
A strategy that will continue. “Long-term investment” in this type of advertising activity “will continue in the fourth quarter of the year, with spending expected to be slightly higher” than in the summer period.
Inditex, on the other hand, in the latest financial information it has released so far – which runs from February 1 to July 31 – does not detail information on its marketing and advertising expenses. It does not detail them in its annual report either.
In recent months, it has launched new celebrity-related commercial campaigns. For example, Zara Streaming, launched a few days ago in Spain. It’s a documentary-like video that was posted on its website that follows Crawford and Gerber as they go to a photoshoot wearing the brand’s clothing and recounts what happens during it. This is something that Inditex had already launched in China a year ago, through broadcasts in which it tours stores, for example, and which it will carry out in other markets, such as the United States. , in France, Italy or the United Kingdom.
Another strategy used – which H&M has also developed – is to launch collections with famous designers. The Galician company indicates in its annual report that it employs 700 designers, but it also employs other renowned designers, due to their talent. Last October, for example, she launched one at Zara with Italian Stefano Pilati, who was creative director of Yves Saint Laurent, but she also doesn’t give details in her financial reports about what these collaborations mean to her. report financially. Inditex, through July 31, continues to increase its revenues and profits, at record numbers, but has also acknowledged that its growth has slowed.
