Iconic fashion brand Hugo Boss has launched a new Hugo Boss Digital Campus in partnership with Metyis. Hugo Boss CEO Daniel Grieder and Metyis CEO Yogen Singh reflected on the development to Vogue Magazine, as well as unpacking future ambitions for it.
Hugo Boss is a historic fashion house, based in Metzingen, Germany. Launched in 1924, the company has been selling clothing, accessories, footwear, and fragrances to consumers around the world for close to 100 years. As one of the largest German clothing companies, it reported global sales of €3.6 billion in 2022 alone.
But as Hugo Boss prepares to mark its centenary year in 2024, the firm is determined not to rest on the reputation it built throughout the 20th century. When CEO Daniel Grieder joined in 2021, he set out to transform the sleepy menswear brand into a “tech-driven fashion platform”, and push for a place among the world’s top 100 brands.
Photo: Hugo Boss
Part of these plans saw the brand split in two – forming Boss, targeted at Millennials and Hugo for Generation Z. To hit an ambitious sales target of €4 billion by 2025, Grieder knew that the firm would have to appeal to both of these younger demographics more successfully – with digitalisation, and overhauling how it collected and used data forming a key component of efforts to do so.
Speaking exclusively to Vogue, Grieder explained, “Data and AI are the next steps and are going to be such an important part of our next chapter in life. There’s no question of if it comes; it’s just a question of how you implement it into the business. We believe the faster the better, and that’s why we want to be a tech-driven fashion platform.”
As the former European CEO of Tommy Hilfiger, and then global CEO of its parent group PVH, Grieder is well-versed in the importance of e-commerce and data analytics in transforming the prospects of historic fashion brands. In particular, while at PVH, he led efforts to use digital showrooms as a means to connect customers with products. This later proved so successful that the company’s entire design processes were also converted into a digital medium.
Inspired by these experiences, Hugo Boss’s ‘Claim 5’ growth strategy will now see it sink more than €150 million into digitising its entire value chain. To drive that transformation, Hugo Boss has overseen the launch of a new digital hub in Gondomar, Portugal. Already employing 150 data scientists, engineers, intelligence specialists and experts, the hub specialises in e-commerce and technology more broadly, that figure will rise to over 250 in the coming year, as the facility helps Hugo Boss become a digitally-savvy brand, ahead of its second century in business.
The hub was developed in partnership with international consulting firm Metyis. The advisory brand specialises in helping retailers identify, collect and analyse data to make the most of e-commerce – it even released a set of tactics for smaller retailers to be more successful on Amazon. Metyis works with eight of the premium 15 apparel companies, including a number of luxury European brands, and used this expertise to help develop the Hugo Boss Digital Campus jointly with the fashion giant.
It’s not the first time an operation helmed by Grieder has reached out for help from Metyis, either. Metyis CEO Yogen Singh began working with Grieder when he was at Tommy Hilfiger, and tapped the consultancy for advice. According to Singh, while it still isn’t common for fashion brands to hire data scientists, this repeated relationship is born out of an understanding that data analytics can be one of the more practical technologies for increasing revenue in the industry.
Singh told Vogue, “If you look at cool things happening, like the NFTs and the metaverse, that is all very good. But our focus is on the balance sheet and P&L.”
Even though the importance of data science has been talked about to this end for some time in the world of fashion, how to actually understand and act on the data collected is still elusive. One report from Salesforce recently found that as many as a third of business leaders are overwhelmed by data, and cite a lack of understanding of data because it is too complex or not accessible enough. While they struggle with the implementation of the technology, however, tech companies such as Google, Instagram and Pinterest have been positioning themselves as next-gen retail destinations – posing a major threat to industry incumbent revenues.
The digital hub project will see Metyis and Hugo Boss look to counter this, broadly tackling the creation of what they call “data architecture infrastructure”, meaning identifying, organising and interpreting insights. According to Singh, generally only around 5% of data collected is unique or relevant for decision-making – while even when that portion is cleared for use, decision-makers can resist acting on it if the reality spelled out contradicts their personal worldview. This is where working with Grieder is different, in his experience.
“A lot of times, people are spending too much time disputing the facts. You need one true source of facts, and don’t discuss the data but the insight,” Singh commented. “Daniel is very unique in his thinking. You need leadership for this. You need to believe in this, not just talk about this in your annual report.”
In addition to expertise in data, the professionals at the Hugo Boss Digital Campus also specialise in e-commerce and technology more broadly. To that end, it has already started helping decision-makers interpret existing data, and enabling them to act on it. For example, the last six months have seen the company has create a dashboard, which can support decisions related to details such as products, shopping behaviours, marketing spend and prices – as well as in the design process.
“If you give a designer just a book of the data, they don’t know what to do with it,” Grieder contended. “But, if you tell them that the best results are black, white, camo, red, yellow and green, they can design with the analytics.”
The new digital and data capabilities can also help Hugo Boss make the most of pre-existing business opportunities. For example, Singh contended that the most popular items, or “never out of stock” items, are usually a variation on a theme. Relating to this, analytics can help Hugo Boss extend the profitability and longevity of its most successful products – or if a design isn’t selling, analytics might flag up why.
“If you look at any fashion company, 70% of what sells is close to what actually was selling [in previous seasons] — with a little bit of alteration,” Singh added.
Forming a joint venture with Metyis was a faster way of onboarding this know-how than recruiting and training people in-house. Looking ahead, Metyis will continue to help Hugo Boss fast-track these capabilities, and take advantage of Portugal’s technological talent. In the long-run, though, Hugo Boss plans to buy its partner out of the €15 million project. While it owns around 30% of the hub now, it aims to own the hub outright by 2026.
In the meantime, Grieder sees opportunities throughout the business, but also for transforming its core relationship with its customers. Grieder wants to turn customers into fans, who are eager for personalised recommendations – leveraging first-party data (collected passively from customers during engagements) and zero-party data (information customers actively share with the brand) to do this. One example of this was from a recent Boss pop-up store, hosted during the Boss Open tennis tournament in Stuttgart. Over the event, the brand gathered 2,000 new customers in nine days, who happily supplied them with new information.
“If you are a fan of a brand, you have no problem giving your data. Consumers are quite open-minded as long as they like and understand what it is used for,” he noted.
The hub could also help Hugo Boss tap the potential of generative AI, which can generate text or images that are more humanlike. With a newly developed interface, an associate or designer might be able to type in a question to get a recommendation on making a decision, rather than use a dashboard.
He concluded, “With AI in combination with data in the future, you can set trends much faster and you can even do it by country, or by region. It’s also structuring it better than when you just have the numbers and figures. You ask the question in AI and it answers it with a normal, understandable sentence. It makes it easier and faster, and in the end, more sustainable and efficient. It’s a dream. And a lot of people are afraid of that, but we think that it just makes the business better.”