January 20, 2017

Marketing strategy of Abercrombie and Fitch – A&F Marketing

Abercrombie and Fitch is an American origins brand known for its young and dashing image. It has retail outlets present all across the US as well as across the Globe in major countries. It can be called a lifestyle brand because of the way it markets itself through lifestyle segmentation.

Here is the Marketing strategy of Abercrombie and Fitch

Segmentation targeting and positioning in the Marketing strategy of Abercrombie and Fitch

The brand mainly targets the youth segment. However, because of its portrayal of youth, it is loved by men and women of all ages. The target segment of the company is the upscale crowd and to target the upscale and lifestyle crowd, Abercrombie and Fitch has invested a lot in its Stores as well as brand representatives and advertising to ensure that the lifestyle crowd loves the brand.

Although A&F had a clear target of positioning itself in top of the mind, it has not been able to achieve the same. A decade back, A&F marketing was strong and hence it had Top Of Mind awareness. But today, the brand has lost its “cool” and “hip” appeal and is doing well overall but not with the same pace it was growing a decade back. In fact, In 2014, the brand posted a severe loss. It has also lost its premium positioning because the youth do not feel connected with the brand.

Marketing strategy of Abercrombie and Fitch

Marketing mix – Click here to read the Marketing mix of Abercrombie and Fitch.

SWOT analysis – Click here to read the SWOT analysis of Abercrombie and Fitch

Mission in the Marketing strategy of Abercrombie and Fitch – “Abercrombie and Fitch focuses upon high-quality merchandise that compliments the casual classic American lifestyle.”

Competitive advantage – Competitive advantage of Abercrombie and Fitch lies in the fact that the brand has a strong retail presence in the US as well as across the Globe. It is known for its youth targeted clothing, design and quality of its clothing.

With the three brands – A&F, A&F kids and Holister, Abercrombie and Fitch targets young kids, children between 13-18 and the youth as well. So overall, the complete life cycle of a child up to his young days is covered by the 3 brands of Abercrombie and Fitch. The brand also covers various parts of lifestyle segment with its apparels, clothing and other products in the portfolio.

BCG matrix in the Marketing strategy of Abercrombie and Fitch – The brand when plotted in the BCG matrix of the retail industry, is a Star. The reason is that the market share of Abercrombie and Fitch is dropping since the last few years, but it still has a high market share and good market presence. To maintain this market share, it has to advertise and promote a lot.

Moreover, when we compare the competition for A&F, we find that Tommy Hilfiger is a close brand which is taking away the market share and expanding rapidly. Hence, the competitive profile is such that the expenses for A&F marketing will only rise and won’t fall.

Distribution in the Marketing strategy of Abercrombie and Fitch – A&F has solid distribution across US and has 400 stores in US alone. Across the globe, it has stores in UK, and the European Union. In fact, A&F gets majority of its revenue from outside of United states due to numerous problems and issues within United states.

Business experts always say that the problem with the distribution strategy of A&F has been that its distribution was not well planned. It is losing market share in its own home ground which is the US due to branding reasons. But outside US, it does not have a high share in Middle East or Asian countries which has affected the overall revenue of the brand.

Brand equity – The brand equity of Abercrombie and Fitch has been dropping over the years even though its branding activities are spot on. The brand is over hauling the complete product portfolio and has eyes on expansion to increase its overall presence and brand value in the market.

In 2012, the brand was 474th highest brand in the world as per Forbes. But since then, the brand has lost further brand equity and is not in the top 500 as of 2016.

Competitive analysis in the Marketing strategy of Abercrombie and Fitch – Major competition of Abercrombie and Fitch comes from Tommy Hilfiger, Aeropostale and American Eagle outfitters.

Customer analysis – The typical customer of the brand Abercrombie and Fitch is seen as a young, athletic person who likes to dress stylishly and in the latest of fashions. The fashion needs to fresh and light and not formal and bulky. The customer should love casual fashion for which their tees and jeans are renowned.

Similarly, when we come to A&F kids, the kids clothing is generally purchased by parents – who should be well off and should be ready to spend a little bit more to dress their kids in the latest in fashion.

Promotions in the Marketing strategy of Abercrombie and Fitch – A&F has used 3 types of promotions most effectively over the years.

1) The first one is to use actual models in their stores as brand representatives who show the clothes to the customers. Naturally, this creates a “want” kind of situation in the minds of the customers, as the customers want such a body as the models. This, therefore elevates the brand value in the minds of the customers.

2) Most of the advertisements run by Abercrombie and Fitch include models from within their stores, therefore making a connect between the brand representative of the store and the local crowd which comes to purchase. These advertisements have a clear undertone of sexuality, with most of them being shot outdoors with semi nude males and females.

3) In the initial years when retailing was at its peak (And before E-commerce took off), A&F used to have stores which were more exclusive and people had to enter to look at the clothes and design. Over the years, A&F has changed its store design and made it more open so that potential customers could also do window shopping. This exposes A&F’s excellent design to many customers.

Overall, Abercrombie and Fitch has a strong brand presence but it looks like a brand which needs to overhaul itself and that’s exactly what A&F has done in 2015. In 2015, A&F also started franchising with select companies to expand in countries like Mexico and others. We can expect a similar marketing strategy from A&F and would love to see it rise to the top again with a top of the mind positioning as a youth brand.

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About Hitesh Bhasin

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