Success Story: Hunkemöller:
"Customer loyalty is worth more than gold"
Founded in 1886, Hunkemöller has become Europe’s leading and fastest-growing lingerie brand in nineteen countries, with state-of-the-art webshops and over 900 stores acting as multi-sensory shopping experiences and digital hubs. As the company looks beyond 2020 and with a renewed strategy for post-COVID digital acceleration, they remain confident and ambitious to grow their brand, people and business. We spoke with Daniel Gonzalez Docal, Head of Wholesale and Alliances at Hunkemöller, to talk about their investment in digital, customer experience, cross-border ambitions, and Hunkemöller’s next steps in their brand journey.
"Hunkemöller is a true omnichannel brand, and it has always been this way. We started selling our products online back in 2003. Our market-leading approach to omnichannel retail has given our customers the widest choice of ways to shop. This strategy has made every physical store a digital hub. Our stores attract customers to browse our collections showroom-style and use our range of omnichannel services, such as click-and-collect, return in-store and availability in-store, creating a seamless integration between offline and online,” says Daniel.
Opening 900 stores across the globe
In 1886, we started our journey with our first physical store in the Netherlands, and in 1987, we opened our first physical store in Germany, which was followed by France and Denmark in 2001. One of the main driving forces behind our cross-border expansion is our current CEO, Philip Mountford. Philip became the CEO in 2009, and ever since then, we have been able to expand our physical presence to approximately 900 stores across the globe.”
“Hunkemöller is a globally oriented brand, but we understand the importance of catering to regional preferences like no other. Our main objective is to offer all our customers a seamless experience. However, selling our products in China, for example, turned out to be quite a challenge. Someone who is Chinese will already have a hard time even pronouncing or reading our brand name, let alone be triggered to buy a product from us among the tremendous amount of competition. We tried to overcome this by promoting our brand and products as much as possible with the help of our partners, and since the social commerce in China is so big, it was truly the main focus of getting our brand out there. We were able to get into those social circles in China, and then we got them on our partners’ platform by showing them, with the correct banners and storytelling, the products we have,” Daniel continues.
The first few years of entering a new market will mainly consist of investing and ensuring that loyalty is earned from the customers. From that point on, a brand will start seeing its growth increase and create a profitable business within the new market. The revenue growth in a brand new market will not happen overnight, and there might not initially be any demand for the products at all. Luckily, Hunkemöller has over 1300 per quarter inclusive and affordable products within seven different categories, which makes it very easy for us to offer different kinds of products in different markets and cater to the demands of all of our partners and customers. Ultimately, this has led to our brand being quite successful in almost all of the markets we enter.”
Customer loyalty is decreasing
"Nowadays, earning loyalty from customers is worth more than gold, because loyalty seems to be decreasing because of the huge amount of competition online and offline. Consumers can shop everywhere and buy anything they want. Our vision is to create a highly inspiring and inclusive brand with a seamless omnichannel customer experience, and that should earn the loyalty of our wide and diverse customer base,” Daniel explains. “The customer journey starts with the first impressions and inspirations our customers receive from our online and social media platforms and our beautiful stores, and it “ends” with an optimal last-mile and delivering a quality product. Our core value is to deliver world-class Hunkemöller service to every single one of our sheroes – our customers. Moreover, we also aspire to surprise our customers at the right moment by inviting them to new events or collaborations. For example, we recently collaborated with NA-KD – a fast-growing clothing brand – where we introduced products that were a bit different from our own assortment but were still very much on-brand for us. Ultimately, we were able to truly surprise our customers with these certain collaborations and earn their loyalty. Currently, we have a total of 4.7 million active members within our network, and approximately 70-80% of our sales are from these loyal members.”
A sustainability initiative
“Sustainability has also become a very important aspect online and offline since many consumers truly expect sustainable products. Together Tomorrow is the name we created to unite our activities that look after our planet and its people. Through a value-based approach, we want to create a sustainable foundation for our business and empower employees and stakeholders to make active and conscious decisions. We strive to be responsible and inclusive by enabling fair working conditions and act in an environmentally sound manner to promote a more sustainable world for today and future generations.”
“Currently, we are already using recycled polyester, recycled nylon, cotton sourced as BCI cotton, and Ecovero (Sustainable Viscose). Our objective is to have 35% of our products sourced with a sustainable material or component by 2024.”
Expanding our marketplace business
“Back in 2011, we made the decision to start selling on other online platforms, such as Zalando and Wehkamp, in addition to our own website. However, a marketplace, for example, Zalando Partner Program, cannot include all of our 1300 articles in wholesale, and with the high return rate in Germany, we were not very profitable on their platform. Thus, together with my team, we decided to improve the profitability of the partner program. Ultimately, we were able to double the low profitability of the partnership within two months, just by putting in certain metrics and product management solutions. As soon as we had all of that under control, it was necessary to onboard new partners to expand our marketplace business, and we met with ChannelEngine.”
Daniel continues: “Furthermore, we have been able to expand our third-party business quite a bit since I first began working for Hunkemöller two years ago, starting with only ten partners. Currently, we already have 42 different partnerships, which means that we quadrupled the number of partnerships within only two years. With the help of our partners, we are able to position ourselves differently in each country to reach all of our customers in the correct manner.”
Being flexible is the key to ensuring good partnerships
"During the beginning of the COVID-19 outbreak, we noticed a shift in demand from our partners. They specifically asked us not to send any products to them during the first two weeks because of the uncertain times. However, after the first two weeks, they wanted us to send as many products as possible due to the tremendous amount of growing demand on their online platforms. Thus, as a partner, it was of great importance to be flexible and understand our partners’ needs and wishes during those times, and because of our flexibility, we were able to build even stronger partnerships. Every partner is different. Therefore, you need to be the best person you can be for your partners. If you have a good relationship, you can find the best possible solution together.”
Building brand awareness before the holidays
“Hunkemöller as a brand already starts preparing for important events a year in advance. The product direction and product innovation are already prepared at that point. The same goes for our third-party business partners. After big events, such as Black Friday, we prepare post-mortem meetings to discuss the event and analyze exactly what happened and what we can improve on in the future.”
“Marketing around holidays can be quite expensive and is also very price-based. Therefore, we try to do it a bit differently by already trying to build up our brand consideration before the holiday season even starts to attract more customers. In addition, we also ensure that our customer support and logistics are prepared before these holidays. We try to gradually, during the beginning of November, have enough people in place according to the forecast we have made prior. Lastly, we also try to deliver the products to our partners and our physical stores earlier during these holidays so that they can prepare in advance as well because this can sometimes be quite a challenge,” Daniel concludes.