September 2, 2014
Is trendy tech really Abercrombie’s problem?
Abercrombie & Fitch’s ongoing struggles are often blamed on the rise of fast-fashion chains such as H&M, Forever 21 and Zara that can offer cheap runway knockoffs. But a bigger hurdle may be fashion’s increasing challenge competing with the iPhone and other newfangled gadgets.
"It’s definitely more exciting for a lot of teenagers to have a new phone that can do lots of cool stuff than clothing," Nicole Myers, 19, a model in New York, told the New York Times. She had just bought a $200 iPhone from Apple.
The Times article, entitled, "Plugged-In Over Preppy: Teenagers Favor Tech Over Clothes," explores the growing appeal of tech items like phones, apps and accessories amid the back-to-school selling period, and how accessories like crystal-studded phone cases or neon-colored headphones are becoming fashion statements themselves.
The article also points out to how technology is influencing purchases in other categories. For the first time, food exceeded apparel as a percentage of the teen wallet in Piper Jaffray’s 27th Semi-Annual Teen survey because many restaurants have free Wi-Fi. Overall, Piper Jaffray’s survey found that after several years of strong growth, the percentage of money that teenagers spent on electronics seemed to have stabilized at around 8 or 9 percent.
Abercrombie appears to believe its issues are still fashion and pricing related. Last week in reporting a 6 percent decline in second-quarter revenues, Abercrombie said it would double down its efforts on fashionable offerings, speed up its supply chain to better capitalize on trends, and take costs out of its production process. Its closest competitors — Aeropostale and American Eagle Outfitters — are also being hit by heightened competition from the fast-fashion chains.
But the big news is that Abercrombie is moving to nearly rid its apparel of its logos by Spring 2015.
"In the spring season we are looking to take the North American logo business to practically nothing," CEO Mike Jeffries said on a conference call with analysts.
The Wall Street Journal said the teenagers "have shifted to cheaper, unmarked gear that they can use to put together their own individual styles."
But some still felt the change reflected how technology is being used in show status.
Wrote, Vauhini Vara, business editor at newyorker.com, "Why should a teen send subtle signals about her identity by dressing in a certain brand when she can define herself explicitly on Facebook and Instagram?"
- Plugged-In Over Preppy: Teenagers Favor Tech Over Clothes – New York Times
- Piper Jaffray 27th Semi-Annual Taking Stock With Teens Survey, Spring 2014 – Piper-Jaffray
- Abercrombie to Remove Logos From Most Clothing – Wall Street Journal
- Abercrombie & Fitch dropping logos from clothes – Reuters
- The other group leaving teen retailers in the dust – CNBC
- Abercrombie & Fitch’s No-Go Logo – New Yorker
BrainTrust
Recent Discussions
Discussion Questions
Are tech gadgets and social media replacing fashion as status symbols for teens? How does technology work as a style driver versus fashion?
Poll
Smartphones are ubiquitous (especially the Apple and Samsung variety) and offer very little in terms of “individual style” beyond the cellphone cover and homepage photos. But they do, absolutely, drain younger consumers’ discretionary budgets.
Blaming tech spending for the woes of the “Three As” (Abercrombie, Aeropostale, American Eagle) is too simple, however. The real culprit is the merchandise content at these stores, and the long lead-time product development model that they are finally abandoning. “Fast Fashion” competitors (in particular Forever 21) have given consumers much more value and variety than the mainstay junior retailers (and let’s not forget the growth of off-pricers over the last few years). These “treasure hunt” retailers may feel over-assorted, but the consumer looking for individual style obviously prefers this kind of shopping.
As a father of three daughters, I would unequivocally state that tech gadgets have NOT replaced fashion. While every teen will still want their favorite gadget to connect, the purchase cycle for gadgets tends to be every two years. With fashion, purchases occur as often as their budget (or Mom’s) will allow.
The most interesting aspect of this post is Abercrombie’s decision to remove its logo from its clothes by the spring of 2015. First, it would suggest that teens are very aware of fashion trends, especially influenced via social media. Second, if it takes Abercrombie that long to remove its logos from their stock, it suggests that they are definitely too slow in competing with “fast fashion” which is capable of changes within weeks.
Abercrombie has many problems, including a lack of leadership and more sophisticated competition from H&M and Zara. But I think it’s plausible that their target customers’ changing attitudes and values (including the increasing prestige of technology) are diminishing the willingness to pay a steep premium for clothes.
Phones and headphones are certainly status signals for teens, though I think clothes and shoes still are as well. And I’m not sure that Nike, Ralph Lauren Polo, or other iconic brands would draw the same conclusion that teens are self-identifying through social media at the expense of lifestyle/apparel brands. But perhaps the discretionary income left over after all the gadgets have been purchased isn’t leaving much room for Abercrombie.
Perhaps a bit tangential, but I’m very interested to see the range of products and price points from Apple’s imminent wearables announcements, which will perhaps produce some interesting experiments that blend fashion and tech. Most of the commentary has focused on the near-certain launch of a smartwatch, but there is also chatter of an entire line of technology-enhanced clothing.
Beats headphones redefined the category in record time, largely on the ears of teens. Maybe Apple can reinvigorate teens’ spending on apparel?
I think the answer to the question is a measured yes, since high tech platforms and social media are part of the “wallpaper” most teenagers deem a mandatory minimum of their personal environment, BUT I don’t think that was Abercrombie & Fitch’s problem.
As to the second question, can you spell APPLE, whose products have everything to do with style and only a minimum to do with function?
More broadly, one could say that “style” in youth culture at least is driven by those things that drive young people. It’s not that technology has replaced sex and rock ‘n’ roll (or hip-hop) or other traditional adolescent interests, it’s that it has augmented them in ways that it is difficult for fashion to follow.
Today, a majority of the young, hip kids are into high-tech toys and their metrics or Kid KLOUT scores (number of followers, etc.) more than apparel—especially boys.
Abercrombie & Fitch can leverage the spend that this group has by lowering prices and selling on fit and feel. Seems many of the young kids that I know are into how comfortable clothes are vs. the brand it shows.
During Labor Day, I listened to a 13-year-old nephew of mine discussing the smartphone (Verizon) vs. the Apple 5C and Apple 5S with one of his uncles. Amazing. FYI: He was wearing a no-brand t-shirt.
I have two Millennial sons that wear Abercrombie & Fitch t-shirts and swear by them for their comfort. The logos are worn off.
It all depends on how you define “fashion.” In the context here, I see tech gadgets as being a part of a fashion statement, rather than replacing fashion. Since quite a number of people, including teens, still live part of the time in “reality” instead of entirely on their smartphones and gadgets, they no doubt like to dress “fashionably” when they meet people for the first time. A cool smartphone is part of the image, but only a part. As for logos? They go in and out of fashion. No big deal.
Style, fashion and popularity have always been important to teens. Determining what says “cool” to a particular generation of teens has been and continues to be important. If Abercrombie were in tune with those trends, there are things they could do to be cool, such as supporting causes important to today’s teens. Taking their name off the shirts is an admission that they are out of touch and not relevant.
Tech is not replacing, but adding/accentuating fashion in communicating trendiness and status symbol.
Tech gadgets (and future wearables) are now part of teens’ lives and their self-identity, and as such they are every bit as important (even more so) as clothes. From the last generation’s Walkman to Apple’s iPod, and from Beats headphones to the myriad of smart devices available today, technology has become integral to the fabric of society.
Teens’ fashion is extremely trendy and that requires similarly-matched nimble merchandise planning and a supply chain to accommodate. Also, the more control the brand gives teens, the more teens are able to customize to their own lifestyle and experience to project their own uniqueness (contradictory to the notion of a trend, but it happens concurrently). More than ever, fashion and technology go hand-in-hand.
In a word, No! Gadgets and social are not replacing fashion, they are enhancing fashion as well as competing for pocket book share.
Teens have to have both and they love, love, love the fast fashion shopping that offers them variety at great price points. Parents love that too, so it’s a win-win. For my two cents.
It’s all fashion, right? From the water they drink to the clothes they wear to the tech they use. But really, that’s beside the point in the discussion about A&F’s woes. The singular purchase of the phone (and a bunch of cases and some headphones) is the not what is causing fewer sales at Abercrombie. Teens are still buying clothes, just not as much at Abercrombie.
When a teen can go shopping more often and buy a few things at H&M and other fast-fashion chains for the price of one item at an upscale brand, the rational consumer’s choice is easy. (It’s just surprising that teens are sometimes rational.)
I think Abercrombie has it right in that they need to improve merchandise selection and pricing to be more competitive. I would also advise that they review their image to see if it still resonates with their youth target market.
It used to be that “it’s a poor craftsman who blames his tools.” I suppose we should update that to “it’s a poor fashion retailer who blames its sales decline on iPhones.” (Although it’s a NYT invention, rather than AF itself spreading the idea.)
This seems like a pretty easy question to answer. Are AF’s competitor’s sales growing? Are AF’s shrinking (or at least its market share)? If the answer is yes—and I’m assuming it is by the frequency with which the topic is raised—then AF’s primary problem is AF, not Apple.
I believe this is all related to the vitality of shopping malls and the teenage backlash on malls imposing a curfew on teens—not a fun place to go anymore. Old Navy, Target, Walmart and Kohl’s are primarily standalone locations and I also believe TJ Maxx and Shoe Carnival may have attracted teen shoppers as a result.
More Discussions
How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…Should Costco Be Opening Members-Only Gas Stations?
Is this the right move for the warehouse club?As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…
Smartphones are ubiquitous (especially the Apple and Samsung variety) and offer very little in terms of “individual style” beyond the cellphone cover and homepage photos. But they do, absolutely, drain younger consumers’ discretionary budgets.
Blaming tech spending for the woes of the “Three As” (Abercrombie, Aeropostale, American Eagle) is too simple, however. The real culprit is the merchandise content at these stores, and the long lead-time product development model that they are finally abandoning. “Fast Fashion” competitors (in particular Forever 21) have given consumers much more value and variety than the mainstay junior retailers (and let’s not forget the growth of off-pricers over the last few years). These “treasure hunt” retailers may feel over-assorted, but the consumer looking for individual style obviously prefers this kind of shopping.
As a father of three daughters, I would unequivocally state that tech gadgets have NOT replaced fashion. While every teen will still want their favorite gadget to connect, the purchase cycle for gadgets tends to be every two years. With fashion, purchases occur as often as their budget (or Mom’s) will allow.
The most interesting aspect of this post is Abercrombie’s decision to remove its logo from its clothes by the spring of 2015. First, it would suggest that teens are very aware of fashion trends, especially influenced via social media. Second, if it takes Abercrombie that long to remove its logos from their stock, it suggests that they are definitely too slow in competing with “fast fashion” which is capable of changes within weeks.
Abercrombie has many problems, including a lack of leadership and more sophisticated competition from H&M and Zara. But I think it’s plausible that their target customers’ changing attitudes and values (including the increasing prestige of technology) are diminishing the willingness to pay a steep premium for clothes.
Phones and headphones are certainly status signals for teens, though I think clothes and shoes still are as well. And I’m not sure that Nike, Ralph Lauren Polo, or other iconic brands would draw the same conclusion that teens are self-identifying through social media at the expense of lifestyle/apparel brands. But perhaps the discretionary income left over after all the gadgets have been purchased isn’t leaving much room for Abercrombie.
Perhaps a bit tangential, but I’m very interested to see the range of products and price points from Apple’s imminent wearables announcements, which will perhaps produce some interesting experiments that blend fashion and tech. Most of the commentary has focused on the near-certain launch of a smartwatch, but there is also chatter of an entire line of technology-enhanced clothing.
Beats headphones redefined the category in record time, largely on the ears of teens. Maybe Apple can reinvigorate teens’ spending on apparel?
I think the answer to the question is a measured yes, since high tech platforms and social media are part of the “wallpaper” most teenagers deem a mandatory minimum of their personal environment, BUT I don’t think that was Abercrombie & Fitch’s problem.
As to the second question, can you spell APPLE, whose products have everything to do with style and only a minimum to do with function?
More broadly, one could say that “style” in youth culture at least is driven by those things that drive young people. It’s not that technology has replaced sex and rock ‘n’ roll (or hip-hop) or other traditional adolescent interests, it’s that it has augmented them in ways that it is difficult for fashion to follow.
Today, a majority of the young, hip kids are into high-tech toys and their metrics or Kid KLOUT scores (number of followers, etc.) more than apparel—especially boys.
Abercrombie & Fitch can leverage the spend that this group has by lowering prices and selling on fit and feel. Seems many of the young kids that I know are into how comfortable clothes are vs. the brand it shows.
During Labor Day, I listened to a 13-year-old nephew of mine discussing the smartphone (Verizon) vs. the Apple 5C and Apple 5S with one of his uncles. Amazing. FYI: He was wearing a no-brand t-shirt.
I have two Millennial sons that wear Abercrombie & Fitch t-shirts and swear by them for their comfort. The logos are worn off.
It all depends on how you define “fashion.” In the context here, I see tech gadgets as being a part of a fashion statement, rather than replacing fashion. Since quite a number of people, including teens, still live part of the time in “reality” instead of entirely on their smartphones and gadgets, they no doubt like to dress “fashionably” when they meet people for the first time. A cool smartphone is part of the image, but only a part. As for logos? They go in and out of fashion. No big deal.
Style, fashion and popularity have always been important to teens. Determining what says “cool” to a particular generation of teens has been and continues to be important. If Abercrombie were in tune with those trends, there are things they could do to be cool, such as supporting causes important to today’s teens. Taking their name off the shirts is an admission that they are out of touch and not relevant.
Tech is not replacing, but adding/accentuating fashion in communicating trendiness and status symbol.
Tech gadgets (and future wearables) are now part of teens’ lives and their self-identity, and as such they are every bit as important (even more so) as clothes. From the last generation’s Walkman to Apple’s iPod, and from Beats headphones to the myriad of smart devices available today, technology has become integral to the fabric of society.
Teens’ fashion is extremely trendy and that requires similarly-matched nimble merchandise planning and a supply chain to accommodate. Also, the more control the brand gives teens, the more teens are able to customize to their own lifestyle and experience to project their own uniqueness (contradictory to the notion of a trend, but it happens concurrently). More than ever, fashion and technology go hand-in-hand.
In a word, No! Gadgets and social are not replacing fashion, they are enhancing fashion as well as competing for pocket book share.
Teens have to have both and they love, love, love the fast fashion shopping that offers them variety at great price points. Parents love that too, so it’s a win-win. For my two cents.
It’s all fashion, right? From the water they drink to the clothes they wear to the tech they use. But really, that’s beside the point in the discussion about A&F’s woes. The singular purchase of the phone (and a bunch of cases and some headphones) is the not what is causing fewer sales at Abercrombie. Teens are still buying clothes, just not as much at Abercrombie.
When a teen can go shopping more often and buy a few things at H&M and other fast-fashion chains for the price of one item at an upscale brand, the rational consumer’s choice is easy. (It’s just surprising that teens are sometimes rational.)
I think Abercrombie has it right in that they need to improve merchandise selection and pricing to be more competitive. I would also advise that they review their image to see if it still resonates with their youth target market.
It used to be that “it’s a poor craftsman who blames his tools.” I suppose we should update that to “it’s a poor fashion retailer who blames its sales decline on iPhones.” (Although it’s a NYT invention, rather than AF itself spreading the idea.)
This seems like a pretty easy question to answer. Are AF’s competitor’s sales growing? Are AF’s shrinking (or at least its market share)? If the answer is yes—and I’m assuming it is by the frequency with which the topic is raised—then AF’s primary problem is AF, not Apple.
I believe this is all related to the vitality of shopping malls and the teenage backlash on malls imposing a curfew on teens—not a fun place to go anymore. Old Navy, Target, Walmart and Kohl’s are primarily standalone locations and I also believe TJ Maxx and Shoe Carnival may have attracted teen shoppers as a result.