My classmate, Amy Du, recently wrote about the reasons for Abercrombie and Fitch Co. and Hollister Co’s significant decline in sales, particularly in Europe. Amy claims that the dimly lit, yet strongly scented stores are a few reasons for the company’s decline in sales traffic. But those reasons hold true, according to the Business Insider as Amy has cited.
She believes that by removing all logos, creating a more inviting atmosphere, and turning into a fast fashion retailer will tailor to the changing consumer preferences.
In fact, I think Amy nailed it. Abercrombie needs to reconfigure and reshape the store experience, and potentially changing its value proposition. The company initially targets teens and young adults, but due to the sluggish sales, it has transitioned to appeal to an older audience.
Because the clothing retail industry is extremely competitive, with no sustainable competitive advantages (cost advantage & differentiation advantage) as Michael Porter identified, the company will have no value created, thus soon to experience challenges.
Abercrombie and Hollister need to redefine their target market, as they have fallen out of favor among teens in recent years. Their revamp should feature new assortments, marketing and pricing to target to their original target market- college-aged consumers. In which Amy has suggested in her post, for removing logos, changing the customer experience, and making products more affordable for their target market.
Works Cited