Continuing my deep dive into Hermès’ business model, here are some quick takes around the company’s three core pillars: Hermès innovation, exceptional craftsmanship, and a selective distribution network.

Hermès Innovation: Creative Luxury, Honoring Craftsmanship, and Curating Distribution

HERMÈS INNOVATION

Hermès innovation is deeply rooted in the art of creating quality, enduring objects cherished across generations.  Hermès annually selects a theme to inspire its designers and artistic directors, allowing designers in various departments across women’s wear, men’s wear, silks, fragrances, etc to interpret the theme as they so see fit. “Innovation in the Making,” “In Pursuit of Hermès Dreams” and “Let’s Play!” have been past muses in this exercise.

In 2021, Hermès ventured into new areas like beauty and perfumes, showcasing its adaptability and pursuit of excellence in all aspects of its métiers. Hermès innovation continues to stand out for its dedication to creating objects that not only meet customer needs but do so with elegance, quality, and a touch of whimsy.

1. Enduring Quality: Hermès innovation focuses on creating high-quality products designed to last and be passed down through generations.
2. Creative Freedom: The brand’s strategy is deeply rooted in creative freedom, with annual themes that inspire its creators and artistic directors.
3. Combination of Tradition and Innovation: Hermès innovation balances traditional craftsmanship with innovative processes to create unique and exceptional pieces.
4. Diverse Product Range: The brand’s creativity is reflected in a wide range of products, from scarves to new ventures in beauty, watches, and perfumes.
5. Commitment to Excellence: Hermès innovation mission revolves around creating original, elegant objects to meet the needs and desires of customers, with a continuous pursuit of excellence.

EXCEPTIONAL HERMÈS CRAFTSMANSHIP

Hermès’ integrated craftsmanship model employs nearly 6,000 craftspeople in France. The brand combines tradition and innovation, focusing on training and preserving craftsmanship savoir-faire. Each workshop is uniquely designed, fostering job creation and a positive work environment.

Hermès invested in expanding production capacity in 2021, opening a training center accredited by the French Ministry of Education in leather work, which proffers a two-year trade school certificate upon successful completion of the rigorous curriculum.  My next article will go into depth about this program.

1. Significant Craftsmanship: Hermès employs a large number of craftspeople in France, emphasizing the importance of craftsmanship in its strategy.
2. Historical Richness: The brand’s history, shaped by generations of artisans, influences its modern approach, blending tradition with contemporary values.
3. Focus on Training and Transmission: Hermès invests in training centers and apprentice programs to ensure the transmission of traditional skills.
4. Expansion and Investment: Continued investment in expanding production capacity to support its diverse métiers.
5. Sustainable and Integrated Supply Chain: The brand emphasizes sustainable practices and vertical integration in its supply chain to maintain quality and responsibility in material sourcing.

A SELECTIVE DISTRIBUTION NETWORK

Hermès’ exclusive omnichannel distribution strategy, combining physical stores and e-commerce, effectively adapted during the pandemic to maintain customer relationships and meet changing demands. With 303 stores globally, each offers a unique, personalized shopping experience.

E-commerce’s importance has grown with a new focus on enhancing online sales and customer services. Unique online experiences for customers, supported by innovative services and special events, maintains Hermès’ distinct presence in 45 countries. This balanced network emphasizes prime locations and digital integration.

1. Effectiveness of In-House Distribution: Hermès’ combination of physical stores and e-commerce proved successful, especially during the health crisis.
2. Personalized Retail Experience: Each of the 303 global stores offers a unique selection, enhancing customer experience and maintaining the brand’s exclusivity.
3. Growing Emphasis on E-Commerce: Over the past six years, Hermès has strategically increased its online sales, launching a comprehensive digital platform.
4. Omnichannel Customer Focus: Hermès places customers at the center of its strategy, ensuring a seamless experience across both physical stores and online platforms.
5. Balanced Global Presence: The brand’s omnichannel network is geographically balanced, with a focus on prime locations and measured growth.

AND OF NOTE –

Hermès is intensifying its commitment to social, environmental, and societal responsibilities. The company’s strategic framework, “All artisans of sustainable development,” guides actions across various levels, aiming for a more systematic and impactful approach.

Hermès’ craftsmanship model not only fosters job creation and social inclusion in France but also embraces diversity as a key driver of creativity and innovation. The brand’s focus on environmental preservation includes commitments to reducing greenhouse gas emissions, using renewable energy, and protecting biodiversity.

In 2021, Hermès set new climate targets in line with the Science Based Targets initiative, underlining its dedication to minimizing its ecological footprint. Through various initiatives, Hermès demonstrates a holistic approach to responsible growth, encompassing everything from sustainable real estate to philanthropy.

1. Commitment to Social and Environmental Performance: Hermès is intensifying efforts in sustainability and societal impact.
2. Employee Focus: The brand values its employees, offering profit-sharing and emphasizing their role in maintaining high-quality craftsmanship.
3. Environmental Responsibility: Hermès is dedicated to reducing its ecological footprint and actively addressing climate change challenges.
4. Community and Philanthropy: Through the Fondation d’entreprise Hermès, the company invests in local communities, education, and biodiversity conservation.
5. Sustainable Supply Chain Management: Hermès is committed to sustainable practices in its supply chain, focusing on traceability and resource conservation.