History Background of Abercrombie & Fitch
Abercrombie & Fitch is a major American clothing retailer that was founded in 1892 in the city of New York. This firm gave special focus to casual clothing for the youth, especially those aged between 12 to 22 years. According to McBride (57), this firm flourished in its early years of operations. It moved its headquarters from New York to New Albany in Ohio as it expanded its operations to the entire country. In these early years, competition in this industry was not very stiff. This firm took a unique approach in the market that was not common at that time. It selected a special niche in the market that is known for impulse buying. The firm started experiencing challenges in the late 1970s as the competition became stiff in the market. New market entrants from Europe, Asia and other parts of the world were interested in opening stores in the United States because of the purchasing power of the market. In 1978, the firm was sold to Oshman’s Sporting Group, Inc. Oshman’s Sporting Group, Inc resold the firm to The Limited Inc in 1988.
The firm’s decision to expand its operations outside the United States was very wise. The outlets in Europe and parts of Asia have registered impressive growth. However, some stores in the United States have been underperforming, especially after the recession in 2008. The popularity of this brand that was common in the 1990s is vanishing very fast. The firm’s conformist, sexy and exclusive attitude that was used in marketing is has been criticized by a section of the society as being a motivation for the youth to engage in immorality.
This research will focus on analysis of Abercrombie & Fitch’s target market, the trends in the market and competitor’s performance against its own performance. As stated above, this firm specializes on casual wear for the youths. The figure below shows one of their widely used advertisements that demonstrate their target market.
This firm specifically targets the adolescents and young adults. These are young adults who are getting to understand themselves. At this stage, people are always very sensitive about what they wear. They always want to remain relevant and trendy in order to be accepted. Dress code means everything to them. They are easily swayed by the changing market trends and peer pressure. The firm targets both male and female customers in this age group. In defining the psychographic of the adolescents, Weber (83) says that at this stage of life, a person gets to understand his or her sexuality. Issues relating to relationships, therefore, matter a lot to them. McBride (45) notes that A&F has been accused of exploiting this weakness of the youths that comes during this period of self-discovery. Most of its print adverts and television commercials are said to portray immorality as something that is cool. This is one of the reasons why the brand gained massive popularity in the 1990s. The pricing of the firm’s products demonstrates that it is mainly targeting the rich. Most of its products are priced higher than what other competitors offer. Its products target people of all races. The firm has been keen to ensure that its adverts demonstrate this racial inclusiveness, especially after making the decision to go global.
A&F offers wide assortments of casual wear to its target customers. Some of the most popular casual wear that this firm offers include sweater meant for winter, denim for all the seasons, women apparel, sports collection, holiday essentials, and cocktail among others. These categories are very important, and for a firm like A&F, ability to remain trendy in them is very critical. Sweaters are always in demand during the winters. However, McBride (112) says that times are changing and many firms are forced to offer sweaters that will meet the needs during winter without necessarily being huge. This sweater should be warm but light enough not to strain the wearer. Denims have remained popular over the years and are used in all seasons. It is important to ensure that a firm keeps up with the changing trends in denim in order to retain the customers. As Weber (92) notes, the market for denim trend keeps changing, and only those firms able to manage this change can remain competitive. The women apparel is a wide variety of products. This category is made exclusive because of its unique position in the market.
According to Levy, Weitz, and Grewal (63), women are keener to the changing trends than women. Their fashion keeps changing faster than that of men, and this means that for a firm such as A&T to meet the market demands, it is necessary to keep up with the changing trends. Sports collection is another category that is gaining popularity in the American markets and other parts of Europe. People are now keen on keeping fit, a fact that has made exercise in the tracks and gym very common. Having the right dress for such events is very important for a clothing company. The sportswear, though not very dynamic, is very unique based on the climatic conditions. Those used during winters are different from those used in summers, especially among people who want simple exercise to remain physically fit. Holiday essentials are also important for both local and international tourists. Cocktail dresses have gained popularity in the recent past. A&T has performed poorly in this category because of its poor assortment of style. The figure shows different denim products and their current market prices.
Actions to Improve A&F Sales and Profits
As mentioned above A&F’s performance in the market has been below the expectation. The firm needs a change in the strategies used by the management in order to avoid a possible financial crisis in the near future. According to McBride (37), in order to achieve success in the current competitive environment, using superior marketing strategies is very important. For A&F, the print media will be very important channels of reaching out to the target customers. Using New York Times and Los Angeles Times or any other print media that has a wide coverage in the targeted markets will be very important. Popular magazines should not be ignored because they can help crate the desired difference in the market. Visual displays in the stores are another important strategy that this firm can use. According to Levy, Weitz, and Grewal (45), having beautifully displayed stores with the right decorations and coloration may attract clients to the stores. If the products are beautifully displayed, then these customers will be tempted to pick an item even when he or she did not plan to make the purchase. Impulse buying is very common among the youth and for them to make an impulse purchase, they must be pleased by what is presented to them. The research by Weber (56) noted that most of the purchases that youths make are out of impulse decisions. This may be what A&F needs to make a difference in the market that has become very competitive.
The social media is another force that the management of A&T should not ignore. According to Smart (93), over one billion people are now using Facebook activity in various countries across the globe. This is a massive audience that the marketing unit of this firm cannot afford to ignore, especially in the markets where they operate. This firm can develop special adverts and pay for them so that they can be featured prominently whenever their target customers log into their Facebook accounts. The firm can also open its official Facebook account where it can interact directly with its customers. The main advantage of this strategy is that it allows the firm to have an interactive forum with its clients where they can discuss issues relating to the firm or its products. This will make marketing research very simple. The customers can directly tell the firm about factors that need to be addressed in order to make the brand and the products popular in the market.
Twitter and YouTube are also important when designing social media strategy. The marketing unit of A&T should develop television commercials and upload it on YouTube so that it can be viewed by the clients. As Smart (56) says, when developing a commercial to be uploaded in YouTube, it is important to make it interesting so that the audience would see the relevance of watching it. The commercial should be relevant to the youth who will be the targeted audience for this firm. Financial strategies at this firm should be redefined. The management can devise new sources of income by coming up with new products that are not in its current portfolio. Eliminating redundant expenses may also lower the overall cost of operations at this firm.
Abercrombie & Fitch is one of the oldest clothing companies in the United States. The firm currently focuses on the production of casual wear for the youth. The historical analysis of this firm reveals that its performance has been fluctuating. In 1978, the firm experienced financial difficulties and it had to be sold in order to survive a possible market exit. In the 1990s, its performance was impressive. However, this has changed in the recent past because it has been registering a sluggish growth in its sales. The management may need to redefine its assortment of products. It should identify categories of products that are underperforming and find the reason behind this. The analysis revealed that some of the categories of products require regular change of design because of the clients’ constant need for something new. Having the right knowledge about what the market needs will be the first step towards having improved performance. The marketing strategies and financial plans should also be reviewed in order to eliminate any form of weaknesses.
Abercrombie & Fitch Brands: Abercrombie & Fitch, Abercrombie Kids, Fierce , Gilly. New York: Booksllc Net, 2013. Print.
Levy, Michael, Barton A. Weitz, and Dhruv Grewal. Retailing Management. New York: Cengage, 2014. Print.
McBride, Dwight A. Why I Hate Abercrombie & Fitch: Essays on Race and Sexuality. New York: New York University, 2004. Print. Smart, James.
Weber, Phillip. Abercrombie & Fitch – Marketing Analysis: A Macro-Environmental and Competitive Audit. München: GRIN Verlag GmbH, 2010. Print.