Hugo Boss
Hugo Boss established its credibility early on with its core product: men’s suits. Ruetzel says that’s the most difficult product to do in the menswear world, but delivering a suit with a modern look with the highest quality standards enabled the company to break into sportswear, denim and jersey products as well. “Whatever we do, we try to do it with a modern touch, so it speaks to a broader audience,” Ruetzel explains. “So it’s not just your grandfather’s kind of style. There are a lot of great suit companies out there, but most of them don’t speak to a younger customer.”
The variety of Hugo Boss products allows the company to be well known throughout the world, which helps when sales are low in certain markets. For example, the U.S. dollar is currently very strong and it’s affecting the tourist traffic here, which affects sales. Ruetzel tries to offset this by working closely with department store partners to try and boost sales with local customers when tourists and visitor numbers are declining. “Customers are buying more in their home markets these days,” he says. “That’s great because it’s shifting money from the right to the left pocket, but puts business in the U.S. under some pressure.”
But the brand is shifting, focusing on growing its retail business and getting back to its roots that drive quality versus quantity. Hugo Boss wants to ensure it’s growing in the right markets. “It’s about looking at what we have, consolidating and focusing on best-performing stores rather than being everywhere,” Ruetzel adds. “Based on the decision and luxury aspirations, we also have to make sure we distribute the brand selectively instead of trying to be everywhere at once.”
Brand Modernization
Hugo Boss is ramping up its omnichannel retail strategy after seeing much success with its e-commerce operations. By first-quarter 2016, the brand plans to link the offline stores with the online business, creating an integrated commerce experience for both customers and employees. Customers can order online and pick up their purchase in store. Or customers can go to a store, and if the sales associate cannot locate the right size, he or she can use a tablet to check for online availability, order the item and ship it to the store.
In the future, Hugo Boss plans to offer appointments with store associates to find the perfect item. Additionally, employees will receive commissions for whatever is ordered online for a customer.
To further facilitate a more pleasant in-store experience, Hugo Boss is fine-tuning its visual merchandising concepts to a less-is-more approach. Customers can really focus on each and every product this way, appreciating the detailed workmanship – especially in its suits – rather than being confronted with a store overloaded with merchandise.
“It’s a really clean way to emphasize products,” Ruetzel says. “We’ve been having a lot of success this way, especially with our tailored line, the high-end, higher price point products. Customers expect a more sophisticated shopping experience.”
It is also adding digital interactive screens in its flagship stores for its “Perfect Suit” exhibition. Customers can gather information and details about the suit before trying one on. At the end of the process, they can leave their personal information behind so Hugo Boss can provide them with even more details and invite them to in-store events. “A lot of customers are surprised by the modern approach of Hugo Boss,” Ruetzel adds. “We really want to move forward and show a new side of the brand.”
Broader Audience
Some of Hugo Boss’s greatest sales come from its department store partnerships, but the company feels like it must protect its high-end core BOSS product from heavy promotional activities. Therefore, it actually runs the business for this product by leasing a section of the department store. But it has no plans to walk away from the wholesale business for BOSS Orange, BOSS Green and HUGO. Those brands are more contemporary and casual, and Ruetzel believes there’s a lot of potential to grow the lines in department stores.
“We would like to protect our BOSS business since we have strong intentions to upgrade the positioning of the brand,” he explains. “We want to protect the price points and ensure merchandising is consistent, so we need to execute this ourselves. Meanwhile, the other lines speak much better to the department store customer.”
To reach an even wider audience and elevate the brand overall, Hugo Boss hired Jason Wu as artistic director of womenswear in 2013, adding women’s clothing, shoes and accessories to the Hugo Boss name. Since its release, it has seen strong growth and Ruetzel sees it as the largest growth opportunity going forward. It helps that celebrities such as Julianne Moore, Gwyneth Paltrow, Diane Kruger and Jaime King wear the Hugo Boss brand.
“We just have to get the word out and make more women aware that, if they want to buy something from Boss from a talented designer, they should come and shop with us,” Ruetzel says. “Womenswear is a huge success story for a brand that is rooted in the menswear world. And extending the apparel product to women is a huge undertaking that’s working extremely well. I think with Jason Wu focusing on timeless classics, we’ve tapped into the essence of the Boss woman.”
Ruetzel jokes that because he’s been with the company for more than 15 years, he’s part of the inventory now. But he’s proud of the growth he’s seen in the company over his tenure and the initiatives the brand has taken in the omnichannel and womenswear space. “We’ve really come a long way,” he says. “And we’re just at the beginning of more growth coming.”