As with any modern day business, the key to successfully increasing profits is by innovating and creating news ways of doing things. For the leading discount clothing and apparel retailer H&M, this development has come in the form of a switch from normal cotton, which is what has been traditionally used in the production of clothing – to something called organic cotton.
There are a number of reasons for them to do this – and in this article, we will take a look at a few, to attempt to understand why the company has undergone increasing economics of scale, even though a more premium product is being used in the production process. By doing this, hopefully it will prove that H&M is one of the leading retailers of “quality” products – something which has been heavily disregarded as being impossible by fashion critics worldwide.
Firstly, we start off with the idea that organic cotton is more expensive to buy. This is indeed the case, however people who come to this conclusion automatically are missing a vital point – it is also easier to work with, and is not as fragile as normal cotton. Therefore, whilst H&M are indeed paying more for the raw material, they are actually increasing the efficiency of their product unit – and are hence paying their workers less per unit produced. More units produced ultimately means that a higher quantity of goods is available to be sold – and this is exactly what bring in more revenue.
You can therefore see how this is beneficial to both the company, and the consumer. It has been scientifically proven that organic cotton contains fewer traces of skin allergens, and is generally better for the environment than artificial mass produced cotton. This has hit a spot with conservationists – who have praised H&M for switching almost 50% of their cotton usage to organic cotton.
This is really not bad for a company which aims to make things as cheap and affordable as possible for the end consumer – and it just goes to show that indeed, you can have quality without having to pay a fortune. Head on down to your local H&M store today and take advantage of this production switch! You’ll be pleased you did when you are able to feel the difference.