TABLE OF CONTENTS INTRODUCTION3 COMPANY ANALYSIS (external + internal + SWOT)4 INTERNAL & EXTERNAL ANALYSIS4 HISTORY OF THE COMPANY4 HEMA’S STRUCTURE4 VISION OF THE COMPANY4 MISSION STATEMENT5 TARGET GROUP5 HEMA’S STRATEGY & POSITIONING6 FINANCIAL POSITION & COMPETITION7 PRODUCT-MARKET COMBINATION8 MARKETING MIX8 TRENDS IN RETAIL9 SWOT ANALYSIS10 STRENGHTHS:10 OPPORTUNITIES:11 THREATS:12 MARKET RESEARCH13 THE 7C’S OF EFFECTIVE WEBSITE DESIGN13 QUALITATIVE RESEARCH15 SALES PROPOSAL17 Executive Summary17 Our understanding17 YOUR COMPANY17 YOUR NEEDS17 DESCISION CRITERIA18
Our Solution19 FOOD SECTION CLEANLINESS IMPROVEMENT19 PRODUCT RESTOCKING19 Conclusion19 COST AND BENEFIT ANALYSIS20 REFERENCES23 MYSTERY SHOP REPORTS24 NATALIA ROJAS24 VICTORIA TORRES24 MAIKE BOUWER24 ANNA ZAJAC25 CELIA BAUMGARTNER26 ANOUK VAN NULAND26 INTRODUCTION In September 1926, the dream of two Jewish entrepreneurs Arthur Isaac and Leo Meyer opened their first store on the Kalverstraat.
The company became a part of the Maxeda group, which renamed from Vendex KBB. It owns Bijenkorf, Hunkemoller, V&D, Praxis, Plan-it and Brico, Dixons and many other stores.
In 2007 Maxeda sold HEMA to a British company called Lion Capital LPP.
The company primarily focuses on leveraged buyout investments in Europe. HEMA has expanded into other European countries, with stores in the Netherlands, Belgium, Germany, Luxembourg and France. In this report we made a sales analysis of the Hollandsche Eenheidsprijzen Maatschappij Amsterdam, HEMA. HEMA is a Dutch discount retail chain that is characterized by relative low pricing of standard housewares, which are mostly made by the chain itself in beautiful and innovative designs.
HEMA offers a very wide variety of products, from books and housewares to food.
HEMA is located all around the Netherlands, with in total 445 branches and thousands of employees by March 2011. We analyzed HEMA from different standpoints; we analyzed the housewares product section and also the food section. We visited in total 12 different stores all in different locations of the Netherlands from Amsterdam to Maastricht and we did qualitative research by analyzing the company’s external and internal environment. The goal of this report was to find out what HEMA can do to improve sales.
COMPANY ANALYSIS (external + internal + SWOT) * INTERNAL & EXTERNAL ANALYSIS HISTORY OF THE COMPANY HEMA is a company with long tradition. The first store was opened on Kalverstraat on 4th of November 1926. Two Jewish entrepreneurs, Arthur Isaac and Leo Mever who have witnessed the hardest economic crisis of that century, conceived the idea. They have seen a lot of people struggling and having difficulties to make ends meet so their concept was to create a shop with different household items of affordable price but still maintaining a high quality.
Thanks to Alfred Goudsmit, the director of Amsterdam-based Bijenkorf, this dream became reality and Hollandsche Eenheidsprijzen Maatschappij Amsterdam (known better as HEMA) was set up. The formula was so successful that recently new stores were opened in Germany, Belgium, Luxembourg and France. Additionally, in 2007, HEMA was sold to a British company called Lion Capital LPP. * HEMA’S STRUCTURE HEMA’s structure has changed over the years, as two different groups have owned it, and each one of them had a different way of handling their operations.
The Dutch company identifies itself as an adapter, because wherever they open a new store they try to fit into the new environment and implement products that are applicable for the target audience they are pursuing. Additionally, the CEO and shareholders play an important role in all forms of decision making for the company’s processes and changes, being constantly informed of any new ventures being pursued. * VISION OF THE COMPANY HEMA has clearly stated that what drives them toward attaining goals is the need to adapt to what consumers really want, in this constantly changing environment. We are driven by our business goals in everything we do. Consumers’ needs are changing and we continually adapt to those needs”. Over the time HEMA has been developing its brands, and now have more products than what they had when they opened their very first store. MISSION STATEMENT According to official website, HEMA’s mission statement consists of the following: “The HEMA style can be summarized in two words: ‘exceptional simplicity’, by which we mean that our products are both simple and exceptional. Long before the term ‘home brand’ was invented, we were creating and manufacturing our own products”.
This concept should be applied not only to products they offer but also to services. HEMA’s mission is to turn day-to-day products into something exceptional and yet affordable. Another aspect is to recognize the continuously changing customers’ need and satisfy them. TARGET GROUP Originally, HEMA’s market segment was mainly the middle-low class with its consequent medium range income. However, over the years HEMA has attracted more individuals with a higher income, due to the guaranteed quality their products offer at a very affordable price.
HEMA states that its target group are men and women of all ages and socio-economic classes as everyone can find there something for himself. However, different surveys have shown that the majority of the audience is mainly between the ages of 14-32, identifying young parents, and students as part of this segment. Lately we can note HEMA’s tendency to focus more and more on younger customers by different promotion techniques and actions. For example, they recently made a contest for students that were studying any form of design, inviting them to create a new HEMA product with their own fresh ideas.
In this digital age, all companies must be aware that if they truly want to succeed they must reach their target group through up-to-date methods. Therefore, HEMA reaches most of its customers through TV commercials, Internet, magazines and even direct mail. The most important of these, in this modern time and age, has to be its main website, which not only allows customers to shop online but also provides all the information necessary on current promotions and activities. HEMA’S STRATEGY ; POSITIONING As said above, HEMA’s aim is to make people’s life a little more convenient, independently of where they live.
That is why the company is planning on expanding across Europe and probably also further. HEMA’s executives believe that the formula they offer is a good product and could go global. The company’s strategy is to captivate new trends and adapt to customers. To be so successful it is essential to have motivated and dedicated staff. To achieve it the relationship of trust and commitment must be created. That is why all decisions, which are being made, are based on belief that all employees are entitled to respect for dignity, individuality and diversity.
The positioning of HEMA is based on the distinctiveness of its designs, which are done in-house by HEMA designers, and all the products at HEMA are HEMA branded (in most cases), which makes it stand out in the market by being immediately recognizable to customers. The competent price is another factor HEMA sells as a positioning point, although competition has made its low prices seem relative in comparison to all the other options now offered at the same price range or at even lower prices. HEMA often underlines its will to act with social responsibility.
Thus, also the way of producing and delivering goods to customers is of high importance. The corporation uses a “naturally HEMA’’ approach to protect the environment. Whenever it is time to change the uniforms of their employees, they recycle and use them for something else, instead of throwing them into the garbage can. Moreover, in each one of their stores they practice a recycle culture and waste collection programs. FINANCIAL POSITION ; COMPETITION HEMA has been one of the most favourite Dutch stores in the Netherlands, and gradually is gaining hearts of other markets abroad.
In the Dutch market, HEMA has 445 stores, in Belgium 62, Germany 8, Luxembourg 3 and France 7. In total HEMA has 10,000 employees, of which 80% are women and the remaining 20% are men. Currently the company is participating in a project called “return to sender”. However, it does not seek to make a profit by selling these products; it rather strives to support fair trade in third-world countries making sure that profits return to the manufacturers by means of development projects and education in the regions of origin.
Hema achieved quite good results in the year 2011 especially if we take into consideration the challenging conditions. It had to face declining non-food retail spending, increasing competition, higher raw material prices as well as declining consumer confidence. Compared to 2010 (loss of 18. 3 €mln), net sales increased by 3%, and so did the net profit rising with €11 mln, mainly because of lower financing costs. According to the statements released by HEMA, the share in all categories improved. The company continues on investing, in 2011 spending €57 mln (amount comparable to 2010).
However, the profit margin suffered (0. 5% lower in comparison to 2010) due to increase in price of oil, coffee and cotton. Total capital after the acquisition by Lion Capital is estimated on €1. 4 billion, of which 35. 4% is financed by shareholders. As far as competitors go, HEMA has found its largest competition against Jumbo Groep Holding B. V and Koninklijke Ahold B. V. , which comprises itself of Albert Heijn, Etos, and Gall ; Ga. , among others. Additionally, other competitors in retail include Kruidvat, D;A, and Zeeman. PRODUCT-MARKET COMBINATION
Hereby is sum up of the best and the worst of HEMA’s products, according to each box/category of the matrix: STARS-“Le Lapin” tea kettle| QUESTION MARKS-HEMA Beauty| CASH COWS-Sausage (worst)| DOGS-| MARKETING MIX Price Based on an overview of the online website, www. hema. nl, the price of products ranges from as little as . 50 to as much as 250 euros, specifically for the bicycles. However, most products range under the 20 euros or less mark, especially when it comes to its office supplies, cosmetics, beauty products, and foods & beverages.
They also use many discounted product prices to boost sales. Product The products offered at HEMA are of a great and wide variety, and are divided into clothing, accessories, cosmetics, skincare products, office/school supplies, domestic appliances, home items, textiles (curtains, duvets, etc. ), food & beverages, and finally, its photo printing service, exclusive to only some HEMA stores. According to the principles of its product mix, the products themselves are not necessarily all consistent with each other, as their diversity is large.
The depth of some of the products is also not as varied, though HEMA tries to have in most cases at least two different variations, mostly in price range/quality or color presentation, of the same product. Promotion HEMA is avid in its promotion of products, especially those that are discounted from week to week and new to the store. They use, as mentioned above, TV advertisements, billboards, employ the use of social media such as Facebook, Twitter, Youtube, Google+ and Pinterest, and as well as Internet advertising through their online website. Place HEMA products are sold at HEMA stores and online at www. hema. nl.
There are several variations of a HEMA store, ranging from very large warehouse style to small outlets in train stations and airports. Also, specialized stores are popping up recently, such as HEMA Foto’s, HEMA Beauty, and a HEMA with only its ready-made food, in a similar “to go” style as its competitor Albert Heijn. The products are sold directly, passing on from HEMA’s own suppliers in Hong Kong and Shanghai to the stores for selling. TRENDS IN RETAIL For 2012, several trends were present in the retail business in general. Firstly, the investment in mobile applications and services has increased enormously over the past year.
Customers are now able to find store locations, prices, customer reviews and eventually order said products all through their mobile phone. With the continued modernity of cellphones, it is no doubt this trend will keep on climbing and showing its importance in the retail business. Another trend this year has been the stagnant sales due to the low economy in recent times. Customers are spending more on necessary products rather than retail, and it is of great importance for retail companies to find a way to demonstrate the added value and worthiness of the product they are selling, as well as placing it in a competitive price range.
Additionally, globalization has taken over the world and influenced greatly on retail. More and more retail companies are encouraged to expand themselves abroad, giving them the competitive edge they need to succeed. Lastly, another trend related retail is that economic times and high prices are forcing stores to become more compact, which has actually been well received by customers, who do not wish to wander in a thousand square meters to get the one product they need. SWOT ANALYSIS * STRENGHTHS: Dutch citizens have been acquainted with HEMA since 1926, which means that a large quantity of the population is attached to their brand. They have one of the most important advantages that a company can have: loyal customers. * HEMA can be proud of its customer-oriented and committed staff, people who do their best every day achieving at the same time high customer satisfaction. * Contrarily to majority of retailers, HEMA sells its own original brand. The company has its own design department, where highly educated employees come up with new ideas and improved products.
What is more, HEMA involves its customers, among them, young talented design students who are given chance to participate in new-product creation. * Own laboratory where all the products are being strictly tested before arriving on store shelves. * Highly creative marketing team often coming up with interesting actions and promotions attracting new customers and retaining the old ones. * Good advertising and multi channel communication with customers. HEMA broadcasts its own TV commercials, distributes leaflets, sends e-mails, newsletters and of course has a well organized website where web shopping is available 24h/24. Ability to track new tendencies and adapt them in a short period; introduction of innovative fashion or an incorporation of a cafe/restaurant into stores is one of many examples. * HEMA takes into consideration the environment during production and logistics processes. It strives to reduce amount of energy used for transportation as well as production, limits packaging to minimum, takes care of material used and the possibility of their recycling. * Offers a great diversity of household products at quite affordable prices. * Great attention toward a customer and putting his satisfaction first.
Thus, each customer that is not satisfied with service provided can claim for refund. * HEMA stores expand with a high rapidity, even monthly. * Demonstrated support for various initiatives such as FAIR TRADE, Return to Sender etc. WEAKNESSES: – Although HEMA claims to produce its products in an ecofriendly manner, still a considerable number of products are made of hardly recyclable material. This aspect should be reviewed by HEMA departments and new solutions should be implemented and comply fully to company’s mission of social responsibility. Based on the market research made, HEMA product quality is not the highest in most cases, especially if comparing it to other products with the same price tag. – HEMA is currently in the process of suffering from the so-called “commodity trap”, in which its fellow competitors are selling the same comparable products HEMA does, at lower prices. – In reference to our surveys, the cleanliness and neatness of the HEMA stores can be improved upon, as well as a better control of restocking products that are being sold. HEMA’s great range of products, though a great strength, is also a great weakness, as the management of all these products can become overpowering, and the previously mentioned quality and cleanliness control become more difficult to handle. * OPPORTUNITIES: – Its current owner, the London-based private equity firm Lion Capital, has been trying to sell the company since 2011, but there are still plans to, in a year or so, retry its selling proposal. The main stakeholder in this would be Royal Ahold NV, who currently is the owner of the biggest chain of supermarkets in the Netherlands, Albert Heijn, amongst other investments.
Pairing up AH and HEMA to sell their products together could prove itself as an incredibly profitable business synergy of brands. -As mentioned before in the retail trends, HEMA could take advantage of the recent mobile phone apps boost, and include an app version of their online store for mobile users to buy the products directly on the go. They already offer their HEMA Photos services online, but could work more on this growing trend to improve sales. -Even though HEMA has a claim on the Corporate Social Responsibility as a company, they could move even further with their actions by actively timulating sustainability amongst their suppliers. Not only does this actively pursue good, it provides a new selling point for customers who believe in sustainability as an added value to a product purchase. Sustainability in companies itself is a growing trend, considering all the education new generations have had over global warming and the threat of the carbon footprint. * THREATS: – With the recent economic crisis in 2012 with the European Union and the budget cuts, retailers in general in the Netherlands, with HEMA included, are suffering from these cuts.
The Dutch government will boost the highest value added on consumer goods to 21% from 19% before the austerity measures were in place. This will affect most businesses who handle goods that are not foods or beverages, and even though HEMA does have a part of its business focused on that, it is mostly a mixed retailer. – Dutch consumer confidence has hit an all-time low since 2003, notably dropping 1. 3% in February 2012. – Due once again to the austerity, Dutch households are facing stagnant salaries with higher retail prices, which means the consumer spending will be reduced. As mentioned before in the opportunities, its current owner, Lion Capital, has been trying to sell the company since 2011 but has so far been unsuccessful to reach its desired 1. 5 billion euro asking price. There are still plans to, in a year or so, retry its selling proposal, which would provide instability within HEMA due to the change of ownership. Of course, it can not be determined whether this change will be beneficial or not, but it most certainly would be an adjustment to the company, and sales might suffer from it. MARKET RESEARCH
This section consists of an extensive and thorough market research analysis of HEMA, a multinational retail chain that caters several products in different areas of Europe. The report begins an explanation of its target group. Consequently, there is an analysis of the 7 C’s of web, and a final conclusion is provided. The overall objective is to obtain a full understanding on the views, and behaviors from HEMA’S customers, and how these influence within their purchasing decisions. TARGET GROUP Originally, HEMA’s market segment was mainly the middle-low class with its consequent medium range income.
However, over the years HEMA has attracted more individuals with a higher income, due to the guaranteed quality their products offer at a very affordable price. The audience is mainly between the ages of 14-32, identifying young parents, and students as part of this segment. HEMA is focusing more and more on younger customers by different promotion techniques and actions. For example, they recently made a contest for students that were studying any form of design, inviting them to create a new HEMA product with their own fresh ideas.
Moreover, they are also reaching youngsters through their parents, personalizing their own product is a key advantage to them. In this digital age all companies must be aware that if they truly want to succeed they must reach their target group through up-to-date methods. Therefore, HEMA reaches most of its customers through TV commercials, Internet, magazines and even direct mail. The most important of these, in this modern time and age, has to be its main website, which not only allows customers to shop online but also provides all the information necessary on current promotions and activities being organized. THE 7C’S OF EFFECTIVE WEBSITE DESIGN In order to look into the 7 C’ S, a required observation of HEMA’s main website (http://www. hema. nl) was necessary to regard how each one the forms of effective design were implemented. Context- The site’s layout and design is dynamic, very colorful and appealing to the senses, making it an effective tool for marketing. Content- Varied is the most proper way to describe their content. Community- HEMA allows customers to interact with each other by participating in contests, activities and promotions, as well as allowing them to voice their suggestions and complaints.
Customization-Since customers can subscribe themselves and create themselves an account, it is possible to have their own customized web page, because the web site will display their most recent purchases and tailor itself automatically each single time. Communication-Their web page uses a two-way communication Connection-The site is linked to other web pages, such as YouTube, Twitter and Facebook. This enables the user to check HEMA’s account in these 3 web sites and to show their most recent acquisitions by uploading pictures of the items. It creates a special bond between the customer and the corporate.
Commerce- When there is a purchase of items, the options on payment are several, and allowing the customer to decide what is his or her best option. In acknowledgement of the before stated reasons, HEMA does make a full use of the 7 c’s. QUANTITATIVE RESEARCH SURVEY ANALYSIS The questionnaire will probe the following 9 questions: 1-Do you ever shop at HEMA? 2-If yes, how often? 3-Do you like HEMA, neither like it nor dislike it, or dislike it? 4-How clean are HEMA stores? 5-Compared to its competitors are HEMA’S prices more reasonable, less reasonable or about the same. -In terms of quality, how good are HEMA’S products 7-Description of HEMA in 3 words 8-On a scale from 1-10, which overall grade would you give HEMA 9-In a maximum of 3 words, please tell us on what you would like HEMA to improve After a survey collection and thorough analysis took place, the results were the following: 1-Do you ever shop at HEMA? 95. 2% of the people interviewed admitted to have ever shopped at HEMA. 4. 8% had never shopped at HEMA before. 2-If yes, how often? From the 95. 2% whom claimed to have ever shopped at HEMA, had 94. % purchase goods at the store once a week, the remaining 5. 6% went to the store at least 3 times a week. 3-Do you like HEMA, neutral, or dislike it? 19% of the interviewees likes HEMA a great deal, 47. 6% like it a moderate amount, 14. 3% like it a little, 19% are neutral 4-How clean are HEMA stores? 19% believe the stores are clean, 61. 9% say they are moderately clean, 14. 3% state that it is slightly clean, and 4. 8% think it is not clean at all. 5-Compared to its competitors are HEMA’S prices more reasonable, less reasonable or about the same? 47. 6% believes the prices are reasonable, and a 52. % that they are less reasonable than the ones of the competitors. 6-In terms of quality, how good are HEMA’S products *90. 5% said the product quality was good, a 9. 5% said they were awful. * QUALITATIVE RESEARCH For the qualitative research, we went on a field trip to several HEMA’s to get a few in depth interviews with their customers. At the quantitative research, we mostly ask fixed answer questions to get structured answers and get clear statistics from it. The qualitative is quite the contrary, we ask open question thus not trying to persuade the customers by giving them several options as answers.
We asked the following questions that are relative to the marketing research: 1. What are your experiences when shopping at HEMA? The majority of the interviewees were more than positive about their experiences. Not one had a negative experience at one of the HEMA’s. One claimed that they even have everything in the little HEMA’s in the small villages outside of the big city: “It is unbelievable (and quite scary) how accurate they know us, costumer! ” Another costumer: “The employees are always friendly and helpful, even though they cannot satisfy our needs as costumers. ” 2.
How would you describe the quality of the products? Here again, the majority is very satisfied about the quality of the products. “The price/quality ratio is fairly good. I know what to expect from the products. Let’s take a their china for example, I know their bowls won’t last a lifetime. If I want bowls that last a lifetime I will shop at Georg Jensen. This way I can change my china more often and get a fresh new look in the kitchen. ” All the interviewees were satisfied with the products bought, though most of them take inconsideration that the products are not the best on the market. 3.
What is your opinion about the tidy/cleanness of the stores? Positive feedback: “The stores look clean”, “Well organized”, “Good structure of the placement of the products” Negative feedback: “Too many products cramped into too little space”, “Quite mess at the sales shelves”, “The floors are dusty, though this problem appears in most shops”. The opinions on this question are fairly divided. The bigger shops seemed to have more negative feedback, due to its large variety of products. The overview was lost and the employers were having troubles keeping the shelves organized and the store clean.
Response Summary Criteria-8 people were individually interviewed for more in-depth findings, and 40 answered a survey. SALES PROPOSAL * Executive Summary For HEMA a Dutch discount retail chain, which is characterized by relative low pricing products mainly made by the company itself, the customer’s opinion and view about the company is the most important. Time by time, the company has been including new products and ideas to the company trying to make it more attractive to buyers, and then is when the food section came to HEMA becoming its pride with products such as “rook worst’, Tompouces and pies.
However, after having done some research in different locations of HEMA, we found out that even though customers like the food of HEMA, most of them think that the cleanliness of the food section is not positive. Another fact is that since HEMA is characterized by having all kind of self developed articles concentrated on daily necessities, people like to go there whenever they need something especially “urgent”. According to our research, it happens often that products are not being restocked frequently. This leaves the client with a sense of emptiness after having travelled the whole store in search of that needed product. Our understanding YOUR COMPANY HEMA is a company that makes life fun and easy in an inexpensive way. In HEMA you will find the remarkable combination of “only the best items for everyday life, with its own especial design, for surprisingly low prices” and with a staff that is always ready to help you with pride, commitment and with love for their company. YOUR NEEDS HEMA is a store where customers go mostly when they need to find something in particular, for example house ware products, school accessories or to have the 1euro breakfast. Customer who go to HEMA, mostly know what they are looking for and what they can find at HEMA.
Therefore, HEMA needs to be always prepared to receive these customers, by knowing and having in advance what they are looking for. HEMA needs to create an especial importance to restocking of products. Since most HEMA’s is a large store, where you mostly spend more time than in a particular store, clients do not like to go there, looking for something they know HEMA provides and not finding it because of restocking issues. Makeup, stationery, and house ware tools are some of the sections that have to be always filled. HEMA has a rather small food section, however it is famous for the good taste and low price of their products.
The 1euro breakfast, the famous worst and the pastry attract fixed buyers day by day to the store. However, after our research we found out that clients were not especially happy with the cleanliness of this section. Most of the time workers who receive money are the same ones that fixed or deliver the food, this without changing or wearing hand gloves. There must be in HEMA a clear differentiation between the person who is handling the cash and that who is touching the food. In the case that this is the same person there should be a imminent use of hand gloves for each of those actions. Prioritized list of needs: More frequently restocking of HEMA products. * Improvement of cleanliness in the food section. DESCISION CRITERIA Key Decision Criteria| Importance(High, Med, Low)| 1. Product Restocking| Med| 2. Food Section Cleanliness Improvement| High | * Our Solution FOOD SECTION CLEANLINESS IMPROVEMENT * For the food section the solution is the implementation of gloves for all employees; enough gloves to be changed after a certain amount of time. Another solution is the distinction of the person working at the register and the person handling and preparing the food. There should not be one person who can use cash and prepare food at the same time.
If necessary and for the variation there could be shifts so the employees can also perform different activities, however for one employee the shift should not chance more than once daily. Example: Natalia receives payments from 9 to 12 and then from 12 to 5 she prepares food. PRODUCT RESTOCKING * For the restocking problem, there could be more frequently revisions of the products that need to be restocked, maybe once a week. Then the making of a product criterion should be made, recognizing which products are the most sold and therefore have to be always available.
After the identification of those products, there should be made an agreement that within certain time (for example 2 weeks) those products will be delivered to the store, regardless of the already in store stock of that product. * Conclusion Our group chose HEMA as company for the importance of the store to the Dutch market. HEMA is a story with many years of experience and long trajectory in the market where customers go to purchase good quality products, with personal and innovative designs all for average low prices. Even though we did not find almost any negative points of the company and we were very leased with many aspects of HEMA such as the employees treatment towards customers or the large scale of products they offer, we all agreed on the fact