Case 10 Case Study
1. Over the last decade, American Eagle and Abercrombie and Fitch have been two of the main clothing retailers competing for the affection of young adult shoppers, specifically within the teen-college age range of 18-22 years. While both companies carry a similar assortment of clothing apparel and try to cater to the same demographic, each company’s retail strategy does differ in various ways. A retail strategy is defined as the way in which a firm plans to focus its resources to accomplish its objectives. Being that both companies have the same target market and nature of merchandise, they both attempt to look for ways to gain ...view middle of the document...
American Eagle, on the other hand, has taken a different approach to sustaining its competitive advantage. American Eagle created the Aerie brand, specializing in dorm wear and intimate apparel, which allowed them to diversify and move into a new market where companies such as Abercrombie and Fitch would not give them competition. Also, by locating themselves in over 930 different locations, almost 700 more stores than Abercrombie and Fitch, in the United States and Canada and by not minding if younger students browse their stores, American Eagle’s strategy has gained them a competitive advantage as the more convenient, accessible store.
2. In today’s business world, one of the most valuable assets to a company is its brand image. A brand is a distinguishing name or symbol that identifies the products or a service offered by a seller and differentiates those products from their competitors. A brand image is a set of associations that are usually organized around the brand. Abercrombie and Fitch is a great example of a company that has used brand associations to build up their brand. By having extremely attractive and usually scantily clad teen-college aged men and women model their clothes in advertisements, Abercrombie has used sex appeal to associate themself as the “young and sexy” brand. Jennifer, the 19-year-old college student in the case study, was quoted as saying, “It’s like I really had to have Abercrombie.” This is a perfect example of how Abercrombie and Fitch has really built up their brand equity. The fact that a young college student feels as if they must have their product no matter what shows that they have established themselves as a brand rather than just a retailer. Moreover, Abercrombie has used the method of extending their brand name by establishing Hollister Co., which associates them with a new, completely different image of a fun, California-themed beach party. Now when a consumer thinks of sexy they think of Abercrombie, yet when they think of summer fun they think of Hollister, both owned by the same company. American Eagle, on the other hand, has built up their brand as fun and casual, but has also made it a point through advertising and other outlets that they are known as a convenient, less costly retailer. Also, because they have so many stores located throughout the country they have been able to build up their brand image through brand awareness. When a consumer thinks of American Eagle they think of casual, fun wear, but most of all they think of convenience and accessibility.
3. Besides American Eagle and Abercrombie and Fitch, there are various other specialty apparel retailers that target the young adult...