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SWOT Analysis: H&M Essay


The nearest H&M store is in Tacoma, Washington. That makes the commute from Olympia about 30 minutes. Many people make the trip to Tacoma purely for the shopping experience. The population in Olympia grew 12.2% from 2000 to 2012 and was projected to continue growing. The surrounding zip codes of the Olympia shopping mall have: $50k to $75k as the most common yearly income

Ages 21 to 34 the largest age group

Which is beneficial because the target market ages are teens, men and women 20 to 35, and parents of children. About 36% of households in Olympia have children under 18, whom are all potential shoppers of H&M kids. H&M plans to increase their store numbers by 10% to 15% yearly, and with that they hope to increase sales in “comparable units.” Since the company is publicly announcing that they want to increase the number or stores, they have the funds and resources necessary to acquire locations they desire.

There are competitors in the mall such as Charlotte Russe, Forever 21, and Macy’s that draw traffic for the right consumers shopping in the H&M price point range. While there are competitors all within a relatively small shopping mall, there are not as many as in the Tacoma or Southcenter malls in Washington within an hour of Olympia, where there are H&M stores located. The average household income is $77,646.4

The consumer spending per household is on average $57,437 annually.2 Olympia has a social reputation of being extremely environmentally conscious, partially due to Evergreen State College, which aligns with H&M’s promise and dedication to being environmentally friendly in their products and production, making it a store that typically the more environmentally conscious would avoid due to the stigma of fast mass production. Weaknesses:

The Washington state minimum wage is higher than in their flagship location in Midtown, New York City. The reasonable amount of competition within the mall has the potential to overshadow a new store. In the zip code where the mall is, where the store should be located, the largest income percentage is low-income, or less than $25k annually, meaning less of a discretionary income. 2 There are other stores of the same price point in the Tacoma and Southcenter malls, and Olympians may still shop at those H&M stores if they already took the trip up to visit another store.

The Olympia mall is has much less traffic than other locations, so the management model would have to be different. The prices are typically higher than at Forever 21, one of the major competitors in the mall, yet the quality is better at Macy’s. H&M is a middleground-type of store that needs just the right customer who is willing to pay only a little more than Forever 21 prices for a little higher quality Opportunities:

The continued growth in population means more consumers to spend their discretionary income, thus raising the average annual consumer spending. The designer collaborations provide a means to acquire designer brand goods for less than the designers’ products that are sold elsewhere. The competition being in the same mall can be an opportunity to take business from them. The development of the neighboring city Lacey could draw more customers in, because the Westfield Capital Mall is the main shopping mall in Olympia, Lacey, and Tumwater. Threats:

Competition for sales with the other retailers in the mall has the potential to be bad as well, they either get the sale or they do not. H&M’s dark past of not being environmentally friendly could deter many customers from shopping there.

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