Hugo Boss’ concession model spurs its online business

Hugo Boss digital transformation

The aggressive digital strategy has helped Hugo Boss, the German luxury fashion brand, improve its online retail business over the past several quarters.

Hugo Boss’ online business recorded 7th consecutive quarter of double-digit growth, with 16 percent growth recorded in Q2 2019. The company’s retail sales grew 3 percent during the quarter, of which  1 percent came from online channels.

Hugo Boss Group reported sales of euro 1.34 bn (1.5 bn dollars) for the first half of this year, up from euro 1.3 bn last year. Online sales hit euro 59 mn (65 mn dollars), an increase of euro 11 mn.

Yves Müller – chief financial officer, Hugo Boss, said the 10 percent of the company’s products are completely digitally developed and sold via digital showroom. To meet its digital transformation goals, the company plans to develop more products digitally in 2020.

Tmall and JD are their main digital businesses in Asia. The company changed their partner and appointed a new marketing agency to run the online channels. From near-breakeven last year, JD’s adjusted operative income grew to an all-time high of 2.1 percent.

Hugo also selected British singer and artist Liam Payne as its future brand ambassador, the first partnership of this kind for Hugo. Liam made a live appearance at an event during Berlin Fashion week for its exclusive HUGO x Liam Payne collections. The products, which were available online immediately, recoded sell-through rates twice as high, with online revenues clearly outperforming brick-and-mortar sales, the company said.

Müller attributes this success to the concession model in online business and has announced plans to expand it further. “New e-concessions and those we initiated back in 2018 will clearly contribute to strong double-digit growth in our online business also in H2,” he added.

Hugo Boss is also expanding their online business by launching exclusive websites for specific regions. In the next quarter, the company will launch a website for Irish market, which had been served by the U.K website.