On the Digital Catwalk at H&M

The "fast fashion" retailer is teaming up with Electronic Arts to weave its threads into the latest Sims video game

As the user-generated-content craze matures and as marketers continue to create digital presences, companies are looking for innovative ways to attract consumers. A steady stream of businesses have been traipsing down the information superhighway, buying virtual billboard space in video games, while retailers such as American Apparel and Dell (DELL) have set up storefronts in the virtual world Second Life.

It’s been an almost exclusively one-way street. Until now, that is. This coming winter, video game publisher Electronic Arts (ERTS) and clothing retailer H&M plan to transform the bits and bytes of the digital world into a physical product. While they're going the more traditional route, featuring H&M fashions in recently released Sims software, the companies are also holding an online contest to allow a Sims 2 player to design clothes that might be produced and sold in the real world.

Both EA and H&M are enthusiastic about their partnership, the first of its kind for both companies. The Sims franchise, which has sold 85 million copies in 22 languages in its seven-year history, has never featured a major brand before; nor has H&M, the Sweden-based designer and retailer, ever appeared in a video game. The partnership provides a new twist to the still-popular trend of corporations immersing themselves in virtual worlds. While American Apparel famously made its own splash last year when it opened a virtual store in Second Life, this fashion contest works almost in reverse, with the clothing developer pulling designs out of the digital world.

Targeting Young Females

Steve Lubomski, U.S. advertising manager for H&M, wrote in an e-mail to BusinessWeek that the idea of the partnership is to attract new customers and engage existing buyers in a fresh way. "We have, of course, been active in branding ourselves online for years, but this is the first time we have had the opportunity to showcase H&M properly in the gaming world," he wrote. Steve Seabolt, worldwide head of brand development for the Sims, says the Sims Div. of EA originally proposed the partnership three years ago as a way to capitalize on the two companies' similar target demographics, mainly young females.

And while neither H&M nor EA were prepared to disclose specific details of the deal's financial arrangement, it’s clear that executives see the tie-in as a good fit. "We are really more of a lifestyle brand," says Nancy Smith, president of EA’s Sims Div. in San Francisco. As such, the connection with a hot apparel brand seems to make sense.

The contest, which began accepting entries June 16, allows Sims 2 players to use the in-game tool, "Body Shop," to design clothes, using official kits available on the Sims Web site. The resulting designs, which must fit certain themes (such as "party time" or "skate park"), can then be uploaded to the Sims 2 Exchange network. EA and H&M will choose 12 designs from each of the six themes, and feature them in virtual runway shows, where viewers can vote for their favorites.

Trying to Avoid a Dud

The winning design will be chosen this September by a panel that includes an H&M designer, a Sims developer, and an editor from CosmoGirl! magazine. The design, which Lubomski says could be a single piece of clothing or a full outfit, will then be produced and distributed in select stores worldwide. So while public votes can be cast, H&M is taking no chances on being locked into producing an outfit that might not sell. "There’s a difference between a cool design and one that has commercial viability," Seabolt says. This way, the retailer hopes it won’t be stuck with a dud outfit.

And while H&M hasn't bought into Second Life or any of the standalone virtual worlds just yet, it isn't overlooking the potential resonance of a virtual retail experience. That's where another part of the Sims partnership comes into play. Last December, H&M sent a group of stylists to work directly with the Sims team to help design virtual garments and accessories. The Sims 2 H&M Stuff Pack, which allows players to design an H&M store and dress their avatars in H&M clothes, was released in North America earlier this month, and has been a top seller since its release.

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