COS Brand Audit

Introduction to Fashion Branding and Marketing Strategic Brand Audit - COS

Anna Stoitsova-21471480

Contents: Executive summary 3

Introduction 4

Mission, Values and Key strategies 5-6 Financial performance 7-8 Product range and positioning 9-10 Macro and micro environment 11-13

Marketing communication activities 14 Future challenges and opportunities 15

Conclusion and recommendations 16 References 17

3 Executive summary The current paper explored the COS brand owned by H&M group. The brand was established in 2007 and has achieved tremendous growth and success during the years. The brand audit focused on areas like mission, values, financial performance, product range, marketing communication, position on the market and future challenges. The analysis was based on credible secondary data and research in order to derive relevant findings about the brand.

hmgroup.com(2021)

4 Introduction

COS is one of the brands owned by H&M Group. It was established in 2007 when the first store of the brand opened on Regent Street (COS, 2021a). The brand was also among the first big brands which opened e-commerce platforms back in 2011 and has set digitalisation of operations as a main priority (COS, 2021a). It is currently operating on five main markets including Europe, Asia, North America Middle East and Australia. The product lines are focused on clothing and apparel for men, women and children. The brand operates more than 280 stores in 44 countries and has online e-stores in 34 o them (COS, 2021a). It is one of the leading brands of H&M Group and is considered as a leader on the market.

5 Mission, values and key strategies

The brand’s mission statement is “Buy better, keep forever” (COS, 2021b). It makes a reference to a higher value of products and improved overall experience of consumers.

The company’s performance and business policies are also driven by its distinctive values which are guiding it in the marketplace. As reported by the brand itself, the values emphasised and set as a foundation of operations, are the main driver of competitiveness and innovation. The main shared values incorporated in organisational culture of the brand include teamwork, believing in people, keeping it simple, being cost-conscious, maintaining an entrepreneurial spirit, being straight-forward and open-minded and focusing on continuous and constant improvement in all areas (COS, 2021c). These values also transform the brand into a motivating workplace in which employees are satisfied and encouraged to contribute to organisational performance.

The main strategic course of action, which is implemented by the company, focuses on differentiation achieved through balancing between classic design and timeless craftsmanship (COS, 2021b). In addition to that, the brand is excessively focused on sustainability and works continuously to improve it in terms of materials/fabrics used, production processes and other operations (COS, 2021b). One of the examples of a policy adopted aiming at higher sustainability is the launching of a re-sale platform by COS in 2020 (Adegeest, 2020). It will facilitate the process of buying and selling pre-owned COS items by its consumers (Adegeest, 2020). This is expected to contribute to lower waste and higher sustainability in fashion.

7 Financial performance

There is no information regarding the financial position and performance of COS separately by the rest of the brands owned by H&M Group. Therefore, the overall financial indicators of the group are assessed. It has been reported by the group that the group sales decreased by 23% in the first half of 2020, mainly due to the pandemic, as further explained in following sections. All brands of H&M took urgent measures to tackle with COVID-19 situation and manage its consequences on trading and sales. The strategies of the company, including its emphasis placed on digitalisation and shifting towards online mode of operations, have resulted in increased online sales which balanced to a certain extent the diminished sales revenue realised by brick-and-mortar stores (H&M Group, 2020).

As evident from the following graph, the sales of the company decreased massively during the first 22 weeks of 2020 and the decrease can be directly associated with the pandemic, relevant measures and lock downs and the inability of physical stores to work.

Figure 1 – Sales of H&M Group

Source: H&M Group (2020)

Report results also show that sales in UK dropped by 54% in the second quarter of 2020 which was a significant hit and a cause for performance deterioration (H&M Group, 2020). Evidence is presented on the next figure.

Figure 2 – Sales in top 10 markets, second quarter of 2020

Source: H&M Group (2020)

Findings clearly indicate that the company and its brands suffered severe losses as a direct consequence of the pandemic and its development across the world.

9 Product range and positioning

As already referred, the brand offers clothing, apparel, shoes and accessories for three main segments – women, men and children (COS, 2021b). It also has free shipping for orders above €100 (COS, 2021b).

The brand offers a wide variety of clothes, including t-shirts, shirts, trousers, shorts, coats and jackets, knitwear, sweaters, hoodies, suits, leisurewear and many more (COS, 2021b).

•Women •Men •Kids &Baby •Home & Lifestyle

(cosstores.com)

Positioning is associated with the establishment of certain perceptions and attitudes of consumers towards the brand in their mindset (Camilleri, 2017). As presented on the following figure, the brand is positioned in the marketplace as a fashion retailer which is categorised as above-average-price provider offering a range of clothing and apparel products. The latter are perceived as medium between high street and luxury fashion (Meg in ldn, 2016).

Figure 3 – Positioning of COS

Source:Wordpress,(2016)

The positioning map shows the relative performance of the COS brand in comparison to alternatives. Overall, the analysis does not suggest that COS is able to provide a stronger value for money proposition in the marketplace when compared to competitors.

11 Macro and Micro environments Company operations are affected by external factors of influence. Very often, these are assessed through applying the PESTEL model, focusing on political, economic, social, technological, environmental and legal impacts and linking these to corporate strategies and practices (Johnson et al., 2017).

In terms of political influences, the main factor affecting brand’s operations is associated with the several consecutive lockdowns in UK and the inability of brick-and-mortar stores to work. As shown on the following figure, the restrictions aiming to restrain the spread of the virus were severe and prolonged (IFG, 2021). This, as already discussed, led to severe deterioration of performance and drop in sales which is crucial for the overall stability of the entity.

Figure 4 – UK lockdowns timeline.

Source: IFG (2014)

The brand addressed that through shifting towards online operations and adjusting its digital channels to increase the scope of operations.

In terms of economic factors of influence, again the impact of COVID-19 pandemic on the economy is a main impact. During 2020, UK faced a historically large decline in GDP, as evident from statistical data presented below (House of Common, 2021).

Figure 5 - GDP growth in UK

Source: House of Commons (2021)

This is expected to lead to severe consequence in the shortrun in terms of decreasing incomes, increasing unemployment and uncertainty among consumers. All these are likely to negatively impact the purchasing power of buyers and this can lead to prolonged drop in sales, especially considering the fact that clothing and apparel are not essential goods and their demand is likely to be responsive to changes in income. The company needs to address these through more intense promotion.

Social and technological factors of influence are mainly focused on the increased use of Internet and social media; thereby, reflected by the company through increased digitalisation.

Online shopping is also a trend which is evident on retail market and expected to continuously increase in the next decade. As shown by the Office for National Statistics (ONS) (2021), the growth in online retailing has been unprecedented, since the start of the pandemic.

Currently, ecommerce accounts for more than 30% of all retail sales in the UK (ONS, 2021 Figure 6 – Growth in ecommerce as a share of all retail sales (2011-2021)

Source: ONS (2021)

Environmental factors of influence are mainly associated with increased interest of consumers and other stakeholders towards sustainability and expectations that brands will be responsible corporate citizens (Hoskin, 2016). This is reflected by the brand through continuous innovation and research and development on how sustainable practices can be increased in scope and effectiveness in the company (COS, 2021b).

Legal factors of influence relate to all regulations that are relevant to the fashion industry and they are also reflected by the brand.

14 Marketing strategies As explained, COS has shifted its emphasis significantly towards digital channels of communication and promotion. The brand maintains a very detailed website offering a wide variety of information for different stakeholders. It is also very active on social media where it communicates constantly with customers. The brand has multiple Facebook accounts and 2.3 million followers on Instagram. Publishing of posts and stories is regular and aims at higher customer engagement and achieving higher brand loyalty and recognition.

Instagram,COS(,2021)

15 Future challenges and opportunities

The evidence suggests that the company would continue facing numerous different challenges that it needs to tackle with. Among these, the main issue arises from the uncertainty regarding pandemic development and inability to plan short-term future operations like before. In case of new lockdowns, COS will suffer more losses and drops in sales and, considering the fact that employees will not be made redundant, all this will result in higher costs and lower profitability.

The brand is recommended to continue developing its digital presence as it provides a solution to this issue and spreads the risks of uncertain future. COS is also advised to continue developing its sustainability strategies as they serve as main sources of differentiation on the market and customer engagement.

COS by you

16 Conclusion and recommendations

In the light of research findings, COS has certain capabilities to address market developments and adjust accordingly to surrounding environment. It is recommended to further improve these through emphasising on the strategies which spread risk, diversify the brand and increase its competitiveness.

COS,2021

17 References: Adegeest, D. (2020) Is Sustainability the Real Driver of H&M’s New Re-sale Platform at COS? [online] Available: https://fashionunited.uk/news/retail/is-sustainability-the-real-driver-of-h-m-s-new-re-sale-platform-at-cos/2020090450733 [Accessed: 3 May 2021] Camilleri, M. (2017) Market Segmentation, Targeting and Positioning, [online] Available: https://www.researchgate.net/publication/319085560_Market_Segmentation_Targeting_and_Positioning [Accessed 2 May 2021] COS (2021a) Brands, [online] Available: https://hmgroup.com/brands/cos/ [Accessed: 4 May 2021] COS (2021b) About COS, [online] Available: https://www.cosstores.com/en_eur/ explore.html [Accessed: 5 May 2021] COS (2021c) Working at COS, [online] Available: https://career.cosstores.com/ coscareer/en_gb/working-at-cos.html [Accessed: 4 May 2021] H&M Group (2020) Six-Months Report, [online] Available: https://hmgroup. com/wp-content/uploads/2020/09/2735858.pdf [Accessed: 6 May 2021] Hoskin, T. (2016) The Importance of Sustainable Fashion, [online] Available: https://www.huffingtonpost.co.uk/tom-hoskin/sustainable-fashion_b_12750082. html [Accessed: 10 May 2021] House of Commons (2021) Coronavirus: Economic Impact, [online] Available: https://commonslibrary.parliament.uk/research-briefings/cbp-8866/#:~:text=The%20magnitude%20of%20the%20recession,two%20months%20earlier%20 in%20February. [Accessed: 4 May 2021] IFG (2021) Timeline of UK Lockdowns, [online] Available: https://www.instituteforgovernment.org.uk/sites/default/files/timeline-lockdown-web.pdf [Accessed: 6 May 2021] Johnson, G., Whittington, R., Angwin, D., Regner, P. and Scholes, K. (2017) Exploring Strategy. 11th edition, Pearson

ONS (2020) Internet sales as a percentage of total retail sales (ratio) (%), [online] Available: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi [Accessed: 11 May 2021] COS, 2021. [image] Available at: <http://www.cosstores.com/> [Accessed 6 June 2021].

COS. 2021. Sustainability - COS. [online] Available at: <https://www.cosstores.com/ en_gbp/sustainability.html> [Accessed 7 June 2021]. instagram, 2021. cos. [image] Available at: <https://www.instagram.com/p/CMPsgwSnwMH/?utm_source=ig_web_copy_link> [Accessed 8 June 2021].

Instagram,COS, 2021. [image] Available at: <https://www.instagram.com/p/CPvibZ7nzI4/?utm_source=ig_web_copy_link> [Accessed 8 June 2021]. wordpress, 2021. Positioning-COS. [image] Available at: <https://megegd.files.wordpress.com/2016/12/competitors.png?w=984&h=1162> [Accessed 6 June 2021].

2021. COS- logo. [image] Available at: <https://www.stickpng.com/img/download/5a1ac92df65d84088faf137b> [Accessed 6 June 2021].