H&M recently did a collaboration with Balmain, a buzzing French fashion brand pioneered by the Instagram notorious Olivier Rousteing. The collaboration’s opening event had an overwhelming customer presence; queues wrapped around street corners and the website ran out of stock within hours. Shoppers were upset with the clearly insufficient amount of stock the store and website supplied.
At first glance this sequence of events seems like a failure for H&M. Some customers were upset that they ended up without their desired purchases. However, from an overall perspective I feel H&M made a good decision and benefited tremendously as an outcome. The value proposition of H&M has always been to provide “high fashion” clothing to a vast customer base through low pricing. To enhance their reputation as a “high fashion” provider, H&M has done collaborations with other luxury brands such as Versace and Alexander Wang and by associating themselves with these brands they have enriched their reputation from the customer perspective.
Although yes, H&M could have done better in the operations department, and made sure all their customers were able to purchase their desired products, the benefits outweighed the faults in the end. H&M gained publicity and prestige from the extreme “overload” that occurred at their event and furthermore further established their value proposition. In conclusion, H&M’s customer relationship is improved in the long run, as the few people who didn’t get their desired purchase will move on, but the luxury association made through the collaboration with prevail with longevity.
photo: http://www.mr-mag.com/wp-content/uploads/2015/05/H-and-M-Balmain.png
