Apparel Retailer Abercrombie & Fitch Turns to Product to Appeal to the Hashtag Generation

In an ironic twist of events, and a telling sign of the times, Abercrombie & Fitch has announced that it will be increasing its size range. This from the same company whose CEO once claimed that it only catered for ‘cool’ and ‘attractive’ American teenagers and had an openly exclusionary attitude.

The extension of sizes can be seen not so much as a defeat but an acceptance that the retailer’s core consumer has evolved. With social media providing the impetus for standing out rather than fitting in, it is evident that millennial consumers prefer creating their own identities. Socialising at shopping malls has been replaced by Snapchat and ‘selfies’. Cookie-cut logos have been replaced by tongue-in-cheek slogans and fashion-forward designs.

None of these changes have boded well for Abercrombie & Fitch, whose steady decline continued in its third quarter of 2013, with comparable sales dropping by 14%. The problem with the retailer is that its main distinguishing point has always been its branding. Its product is a uniform that shows allegiance to a ‘cool’ kids club that today’s American teenagers do not relate to.

Taking Inspiration from Fast Fashion

In its bid to re-establish its relevance, the retailer is undergoing a major product revamp. Apart from increasing its size range, the retailer will also be extending its colour ranges, expanding into footwear and other accessories and increasing its assortment of women’s tops. While the company has acknowledged that demand for logoed apparel is not as strong, it will remain an important part of the mix.

It is difficult to understand what will make the retailer’s apparel stand out in what has become a highly saturated market. Apart from fellow US-based casual clothing retailers Aéropostale and American Eagle, it will be fighting for share of wallet with the likes of H&M and Forever 21, and pure-play e-tailers like Asos.

It is taking a leaf out of the fast fashion playbook by increasing its speed to market and accuracy to reduce inventory pile-up and mark-downs. However, what it is not learning from its competitors is the need for affordability. In fact, the company intends to increase its average selling prices from 2014. Its relatively premium pricing will make it all the more harder to lure back cash-strapped teenagers who are increasingly turning to fast fashion retailers and trendy start-ups for their budget-friendly style fix.

Iconic Store Fronts get a Makeover

Further emphasising that product will reign supreme, the retailer’s second brand Hollister will be testing a new store format. It will change its iconic Southern Californian beach porch fronts to glass windows, letting potential consumers actually see its merchandise. The brand will begin testing out the new storefronts in early 2014.

The retailer has always considered the store its most important point of contact with the consumer, and a vital marketing medium. Interestingly enough, Abercrombie never displayed products in its shop windows. The mystery was part of the allure. Inside the stores, things were not any clearer in the darkly lit nightclub-type settings.

While this strategy was once held up as a poster child for creating atmospheric destination stores, it was a story-telling tactic with which American teenagers seem to have become disenchanted. The response to the new trial stores will be a significant indicator of the strength of the product on sale, free from the smoke and mirror tactics.

A Tough Road Ahead

As previously hypothesised, to stave off the day Abercrombie & Fitch is deemed to be out of fashion for good, there will need to be substance in the clothes beneath the marketing tactics. Judging by the retailer’s new strategies, it looks like that day has come earlier than expected. Perhaps soon we will begin to see more of the product in the brand’s advertising campaigns.