Digitization aims at transforming the business model

Digitizing the business model offers HUGO BOSS attractive possibilities for sustainably increasing customer value and for improving efficiency. In doing so, the Group is building on its strong IT and logistics capabilities. The potential for digitizing the business model is to be harnessed along the entire value chain.

For example, the progressive digitization of product development will enable further reductions in lead times. Already today, the development of around one-third of the styles of the HUGO collections is completely digitized. In the coming years, that share will increase further and the technology will also be transferred to the BOSS brand. Moreover, an increased use of digital trend detection and a digital fabrics and trimmings database are expected to further shorten the collection development phase. Research and Development

In the production process, the Company is focusing the digital transformation of its largest production plant in Izmir (Turkey). On its way to become a “smart factory”, key milestones have already been achieved with the digital networking of all production machinery, employees, processes and products. This already allows the real-time tracking of various production data. Moreover, the increased use of artificial intelligence is expected to lead to a further improvement in production processes. Sourcing and Production

HUGO BOSS intends to further increase the effectiveness of its marketing budget in the coming years. Around three-quarters of the marketing budget will be allocated in future to digital marketing channels (2019: around 70%). One focus will be on expanding the Company’s presence in relevant social networks. By using advanced analytics, the effectiveness of digital marketing activities can be measured efficiently and useful conclusions for future marketing activities can be drawn.

In sales and distribution, the Group is increasingly working on the expansion of its own online business. In addition to its own online store, the company is consistently strengthening partnerships with so called multibrand platforms. Digital elements also play an important role for HUGO BOSS in brick-and-mortar retail. In particular, the integration of omnichannel services is designed to offer customers an elevated shopping experience. In order to enhance the shopping experience even further, the Group is increasingly using large touchscreens to have customers order all BOSS and HUGO products conveniently. Already today, the Group is making use of a digital showroom when distributing the HUGO collections to wholesale partners. This offers trading partners a flexible, convenient and fast alternative to conventional ordering, covering aspects such as the inspiration for the collection, the selection of individual products and the completion of the ordering process. In the medium term, both brands will be distributed to wholesale partners by means of digital showrooms.