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In the 90's and for much of the first decade of this millenium, Abercrombie & Fitch was the brand to beat. The clothing was pricey and the sales figures were strong.Abercrombie & Fitch wasn't selling clothing but an experience...an aspirational experience targeted to teenagers who hoped being decked out in Abercrombie clothes would help them realize their high school dreams. The teenagers couldn't get enough.
Overlay those aspirations with a Freudian twist and you get all the elements of narcissism: vanity, conceit, egotism and elitism.
For Abercrombie, the strategy worked for a lot of years. But being narcissists, the company and the brand were blinded by their own vision of themselves and didn't accept that a generation's aspirations evolve -- maybe not dramatically. but enough to reject past loves.
Looking back at the past year, it's easy to see where Abercrombie Fitch goofed up. Not only did it refuse to consider that its adoring fans might one day get bored with their relationship,it wasn't listening to them. Had they listened, they would have heard that these teenagers still aspired to be cool but they wanted to aspire to that on a budget. As important, it wasn't just about the money, the relationship had become boring. The same old, same old clothing wasn't holding their passion quite the way it used to. Oh, and did I mention Abercrombie didn't hear that their adoring fans needed to be on a budget?
Being the narcissists that they are, Abercrombie & Fitch went where no other retailer dared to go last year: they refused to lower prices; they refused to put merchandise on sale, they didn't change the style of their merchandise.
It seems so obvious now. But when Abercrombie & Fitch was trying to decide how to navigate the recession they were thinking not so much about short -term sales but of their aspirational brand. They made their decisions to protect their brand. That's exactly the advice brand specialists would tell them to do.
However, the way they executed their protectionist policy resulted in a misstep of such huge proportion that Abercrombie & Fitch is being dubbed by Time Magazine as the World's Worst Recession Brand.
Okay, in fairness, Time Magazine didn't actually call Abercrombie & Fitch the world's worst recession brand...they just asked the question: Abercrombie & Fitch:World's Worst Recession Brand?--allowing us, the readers, to conclude that yes, indeed, Abercrombie is the worst recession brand in the world. ( If you are a Keith Olbermann fan you can how put the sound track of Olbermann warbling his worst person in the wo-o-o-o-r-ld segment)
Being a narcissistic brand, Abercrombie couldn't imagine how it could possibly change. They just kept on believing that once the economy settled down, their adoring fans would come running back, like lovers asking for forgiveness after a fling. So Abercrombie didn't come up with a creative way to lower prices and still protect the aspirational nature of the brand.
Experts will tell you that Abercrombie & Fitch was right in being concerned that if they lowered their prices it would hurt their brand. Historically, once the price is lowered, consumers don't react kindly to having price increases.
Abercrombie's misstep was that there are ways the lower prices without permanently damaging the price point.
The Time Magazine article explains how other aspirational brands like The Four Seasons Hotel Chain have managed to do it.
...the Four Seasons hotel chain, which still charges premium prices for
its rooms but started offering deals that let you buy a two-night stay
and get a third one free. The hotel, in effect, is lowering its prices.
But when things improve, it will be easier for consumers to accept the
end of the free-room deal than a sudden spike in prices.
Recently, Abercrombie decided to fight for its relationship with the teenage market. It is lowering its prices and introducing a more Gossip Girl inventory.However, The Big Fat Marketing Blog asks if its too late for Abercrombie?
Many Abercrombie shoppers have turned their attention to Aeropostale and American Eagle Outfitters, two of the companies sweeping up the broken bits left by Abercrombie’s bad decisions.
Even if kids still want to shop at its stores, parents are saying no. The glimmer of hope Abercrombie may have seen of late—rising stocks and consumer confidence—has all but disappeared as stocks have slumped again on worries that consumers are still clinging to their wallets.
Abercrombie’s recent financial report also suggested it has cut its marketing budget. Another bad move at a time when it should be letting its customers know it
