Report - First Draft

Word count:  2,917 words

Executive summary:

The purpose of this report is to evaluate market research carried out on the current position of the fashion brand Abercrombie and Fitch. Through research methods used including online resources such as news articles and blogs, as well as online and social media orientated surveys it has become clear that Abercrombie and Fitch are losing relevancy within the fashion market and being overtaken by its competitors. A collection of recommendations for the brand have become apparent on how they can change their brand visuals, product line and social media presence.

Introduction:

This brand marketing report will demonstrate the current position of the brand Abercrombie and Fitch, whilst advising them on what they could change to improve and re-establish their brand in their or a new market.

Abercrombie and Fitch is an American clothing retailer that focuses on high quality casual wear. They were extremely popular during the late 1990s and early 2000s, known for their logo apparel and unique store experience of topless male models greeting customers at the door, and was often described as an overload for the senses with strong fragrances and loud dance music a staple for the stores. However, this once successful store dynamic became unpopular with customers and so was left behind along with Abercrombie and Fitch’s former controversial CEO Mike Jeffries who installed the very sexualised theme to the brand and stores. These were replaced with new CEO Fran Horowitz, the removal of the intimidating models, and the music turned down showing that Abercrombie and Fitch are on their way to improvement but still aren’t fully there yet.

Through primary and secondary research, it became clear that a popular opinion of Abercrombie and Fitch is that it is now outdated and is a brand people used to wear but wouldn’t anymore. This was due to the fact that other competitors have become more popular, for example through an online survey the majority of people answered that they would prefer to shop at brands such as Topshop as they prefer the price and the styles on offer.

Therefore, Abercrombie and Fitch’s biggest problem is relevancy in the fashion world and the status of their reputation and so they need to continue their rebrand and changes in marketing strategy to improve and regain their popularity and change people’s views to be more positive.

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Macro-Economic Analysis (PESTLE):

Throughout the 1990s Abercrombie and Fitch experienced a huge increase in financial performance as sales went from $110,952 in 1993 to $1,042,056 in 1999. They are now experiencing sales in the billions and so arguably are more successful than ever, this is true financially, however popularity wise they were more successful in the 90s than they are now.

Abercrombie and Fitch’s financial performance suffered from 2014 to 2017 with sales revenue dropping consistently each year from 2015. It dropped from $4.12b in 2014 to $3.74b in 2015, $3.52b in 2016 and $3.33b in 2017. In 2018 their sales revenue began to rise again with it increasing to $3.49b.

Abercrombie and Fitch need to take into account changes in their external environment and react to these changes to ensure that they can compete in their market.

Political – Tax policies such as an increase in income tax will lead to a decrease in Abercrombie and Fitch’s sales as customers will be more cautious of spending, especially with a more highly priced brand such as A&F, as they will have less disposable income.

Economic – If exchange rates were to rise it would be more expensive for Abercrombie and Fitch to import and export goods and so could lead to them to reducing the quality of their products to accommodate for cheaper labour or materials, which could in turn effect sales as people won’t be investing in the same quality as they previously have experienced.

Social – A change in consumer tastes can affect sales, for example if a brand’s typical style isn’t on trend then their products won’t sell. For instance, with Abercrombie and Fitch people’s views tends to be that it used to be very popular but it is now becoming out of date.

Technological – With their website and app it is now easier than ever for people to shop Abercrombie and Fitch as it opens them up to multiple distribution outlets, therefore increasing sales. However, there is a negative side to being online as if A&F found themselves in a controversy, consumers would know about it instantly through social media which could negatively affect their reputation.

Legal – Abercrombie and Fitch need to abide my employment laws as they have suffered from issues in the past such as refusing to employee a Muslim woman because she wore a Hijab.

Environmental – Abercrombie and Fitch have had problems in the past with their environmental status as they have used dangerous forms of manufacturing such as sandblasting. They need to ethically source materials and manufacturing processes to create a positive brand image and add value to their products. This will increase demand as people will see the product as worth more because it was ethically sourced and so prices could be increased which will therefore increase revenue.

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Brand Market Position (SWOT):

Strengths –

1.       Abercrombie and Fitch are a well-known brand and have global recognition.

2.       They have the A&F loyalty club which offers members exclusive promotions such as £10 off a £50 purchase which gives customers more of an incentive to buy and will also keep customers loyal to the brand.

3.       Abercrombie and Fitch are technologically advanced in terms of their stores and offer a unique in-store experience as they unveiled a new store concept in Ohio in 2017 that included personalised changing rooms featuring light and sound controls. This customisable experience puts A&F ahead of their competitors as a positive instore experience can heavily impact whether customers will return for repeat purchases.

Weaknesses –

1.       Abercrombie and Fitch have been involved in many controversies in the past such as their former CEO Mike Jeffries claiming that A&F would never stock about a size 10 and the strict rules on who could be employed to work in the stores as he only wanted typically attractive people to wear Abercrombie and Fitch clothing. This has tarnished their reputation and left people with often a negative opinion of the brand.

2.       Their products are highly priced and arguably too expensive for the younger side of the target market of 21-24 year olds.

3.       As their stores are known for being dark and loud this has turned people away from going in the store as people still see it as intimidating despite them changing the store atmosphere.

Opportunities –

1.       There are only 2 Abercrombie and Fitch stores in the UK and so they could open more to enhance their presence in the UK market.

2.       All of their social media accounts upload the same posts and so they could diversify the posts and make specific content for specific accounts to make the user experience more personal.

3.       They need to continue to rebuild their image and reputation by continuing to launch positive campaigns such as their 2018 denim campaign “Do it in Denim” as this featured 30 different styles of jeans to reflect the versatility of denim and the wearer’s personal take on it.

Threats –

1.       Abercrombie and Fitch are part of a saturated market with a lot of competitors, from Jack Wills at the high end of the market, and H&M at the low end of the marker, price and quality wise.

2.       Trends and consumer tastes are constantly changing and have already affected Abercrombie and Fitch as they used to be on trend in the 2000s but is now seen as outdated and stuck as a 2000s trend.

3.       Due to lots of competition differentiating can be difficult and Abercrombie and Fitch will find it hard to stand out, especially with copy cat sellers being able to easily replicate designs and sell for cheaper.

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Competitors:

Abercrombie and Fitch have a wide range of competitors, all with a variety of quality, price and design and come from high end and the high street. For example, one of their closest competitors is the British clothing brand Jack Wills who offer high quality items at a high price, similarly to Abercrombie and Fitch. One thing that Jack Wills does better than Abercrombie and Fitch is their brand image as they are instantly recognisable through their signature pink and navy stripe where as Abercrombie and Fitch don’t achieve this as well as they have multiple logos from written text, symbols and their old traditional logo of the moose which can lead to confusion for the customer.

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Consumer Demographic:

Abercrombie and Fitch’s current consumer demographic includes the age group of 21-24-year olds. The typical Abercrombie and Fitch customer that A&F seem to be marketing towards is an American college student or recent college graduate who is fairly affluent, friend orientated and travels the world. This is the consumer that is portrayed on Abercrombie and Fitch’s social media outlets, as their Instagram features young people enjoying trips with friends across the world from Rome to New York whist wearing classic Abercrombie and Fitch designs to fit in with their traditional all-American style that fits with their American heritage.

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Product Selection:

Abercrombie and Fitch’s product range includes everything from Mens, Womens, and Childrens outerwear, dresses, tops, sleepwear, swimwear, shoes and accessories. They have a very extensive range of jeans available that it has its own section on the Abercrombie and Fitch website with 8 styles available for women and 6 for men. They also have specific Abercrombie and Fitch branded items that on the website are named as part of the ‘A&F Logo shop’ which includes their traditional logo t-shirts and hoodies. Their items are priced quite highly with coats ranging from £70 to £210, similarly to their competitor Jack Wills whose coats range from £80 to £230. Their hero products, which are their defining products that represent the brand are their fragrances such as ‘Fierce’ and their logo items as they are easily recognisable as Abercrombie and Fitch.

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Social Media and Influencer Marketing:

Abercrombie and Fitch are quite active across social media with their Instagram, Twitter and Facebook accounts. On Instagram they have 3.7 million followers, Twitter 567.4K and Facebook 8.5 million. Despite their Facebook having the most followers people are more active on their Instagram with the most popular posts gaining upwards of 35,000 likes. On their social media posts Abercrombie promotes products in different forms such as models wearing them at Abercrombie and Fitch photoshoots, flat lays of outfits, and reposts of other Instagram users wearing A&F clothes. I think the range of ways that the products are presented is helpful to customers as for example with actual people wearing the products rather than an Abercrombie specific model, shows how the clothes perform in a more natural way and so can help with judgement of whether to buy or not. They Also utilise features on Instagram such as "Tap to view products" where customers can view the price of the product featured in the photo and be taken to the Abercrombie and Fitch website to buy. Abercrombie and Fitch have used influencer marketing through their sister brand, Hollister, by releasing collaborations with celebrities such as singers Noah Cyrus and Khalid in a 2018 back to school campaign. On their Abercrombie account they also repost uploads from online influencers and youtubers such as Janet Amrani wearing Abercrombie and Fitch items. These posts tend to be some of their most successful posts with one of the Janet Amrani uploads receiving 27K likes compared to some of their normal posts only attaining 5K likes. A&F also break up their posts of products with posts of places and "travel inspiration". I think this is done to promote their target Abercrombie and Fitch customer and to make people think if they buy Abercrombie and Fitch products, they will be able to achieve the lifestyle presented on their social media.

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Marketing Mix (Other Brand Communication Channels):

Product – Abercrombie and Fitch sell a variety of products across men, women, and children ranges including apparel such as jeans, tops, outerwear, shoes, swimwear, sleepwear and underwear. They also sell accessories including jewellery, hats, scarves, bags, belts and they popular fragrances such as ‘Fierce’. They also have a small homeware range including blankets and candles.

Promotion – Abercrombie and Fitch promote their products through social media by uploading images of their products with direct links to buy them on their personal social media accounts such as Instagram, Facebook and Twitter. They also have pop up advertisements appear on apps such as Instagram as breaks between Instagram Stories. They also have suggested ads come up quite often on apps such as Facebook with a small selection of products on display after searching Abercrombie and Fitch into Google showing that they utilise targeted advertising.

Place – Abercrombie and Fitch sell their products both online and in-store. As of August 4^th 2018 Abercrombie and Fitch operated 870 stores worldwide with 283 Abercrombie and Fitch and Abercrombie kids stores and 396 Hollister stores in the US, and 47 Abercrombie and Fitch and Abercrombie kids and 144 Hollister stores internationally.

Price – Abercrombie and Fitch’s products are quite highly priced with a pair of jeans costing £70 and tops and their logo sweatshirts ranging from £30 to £64.

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Proposed Strategy (Recommendations):

The brand – Abercrombie and Fitch should rebrand themselves as a premium homeware and lifestyle brand as, as they currently stand now as a clothing brand, they have become irrelevant to many consumers and have lost interest and popularity to high street brands such as Topshop, H&M and Zara. They also seem to be competing with themselves with having both Abercrombie and Fitch and Hollister and so they should merge the two by expanding the target market age of Hollister and having all of the clothing lines under that one brand. Abercrombie and Fitch could then become completely homeware and lifestyle orientated and allow the brand to explore new markets.

The logo – Abercrombie and Fitch should reduce the amount of logos that they use and stick with one to avoid confusion and to show that they have a strong brand identity. They are famously known to use the traditional moose logo, but also use a A&F logo and a written logo of the brand name. They should only use the written text logo as it is the simplest and mature looking which will fit well with their rebrand and will be most appealing to a new and older recommended target market.

Target Market – Abercrombie and Fitch should expand their target market age for Hollister by combining the two that they already have for the brands now. Therefore, instead of having the target market age for Hollister being 14 to 18 year olds and Abercrombie and Fitch’s target market age being 21 to 24 year olds, Hollister should be 14 to 24 year olds with different clothing collections for the younger side and the older side of the target market. For their new target demographic Abercrombie and Fitch should market towards 26 to 34 year olds, with the consumer being mainly female, potentially with a family and a steady amount of income who would want to buy premium homeware to decorate their home.

Products – As it has been recommended that Abercrombie and Fitch should rebrand themselves as a homeware and lifestyle brand rather than a clothing brand, their product line should reflect this. Therefore their new range of products should include homeware items, and expand on the candles, fragrances and blankets that the brand currently sell as they are now. They should sell products such as home décor, vases, cushions and photo frames etc.

Social media – Abercrombie and Fitch need to reimagine their social media platforms to receive more engagement as for example, their Instagram has over 3 million followers, yet their posts never get anywhere near 100,000 likes. They also reupload the same posts with the same photos and captions across their Instagram, Twitter and Facebook and so they could diversify their different online accounts to have specific content on specific social media outlets to make consumers online experience with the brand more personal. They could also introduce features such as online competitions to rouse more interest for the brand and purchases.

Location – As Abercrombie and Fitch pride themselves on having a strong brand heritage and focus on being an America based brand, they could leave their international markets by closing their stores in other countries and only have physical stores in America. The majority of their stores are in America anyway and solely operating stores in America will bring an exclusiveness to the brand which could potentially make them more desirable.

Stores – With their rebrand, Abercrombie and Fitch should redesign their stores by completely removing their dark interior that Abercrombie and Fitch are notorious for that have left the stores with a reputation that they are loud and intimidating to enter. They should brighten the interior for a cleaner and mature look and remove their infamous spotlights to make viewing products easier which will appeal to the new and older target market that has been recommended. The front of the stores should also be more open with window displays actually displaying products that they have on offer in-store to increase interest and footfall.

Promotion – Currently the only Abercrombie and Fitch promotion is online through their social media accounts promoting their products on Instagram, Twitter and Facebook posts, and online adverts that also appear on Facebook and Instagram. To get their name and brand to be even more known, especially with a rebrand, Abercrombie and Fitch should explore different forms of promotion and advertising. For example, they could introduce television advertising and outdoor advertising such as billboards and posters of their website to create more interest and open themselves up to potentially older consumers who most likely wouldn’t see online adverts.

Collaborations – As Abercrombie and Fitch reintroduce themselves as a homeware and lifestyle brand, they could couple their relaunch with collaborations with influencers and celebrities to help with interest and popularity. For example, they could collaborate or make specific collections/product lines with lifestyle influencers such as youtubers like Niomi Smart and Ingrid Nelson to appeal to the younger side of their target market. For the older side of their target market they could work with lifestyle celebrities such as Chrissy Teigen.

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