I was writing a report on brand equity for Ehrenberg-Bass Sponsors while traveling with a colleague when she said she had to buy a shirt from Abercrombie & Fitch for one of her children because they had asked for it.
Now this I thought was an excellent example of the sort of brand equity that captivates many marketing practitioners and theorists.
The first few years of high school are a stressful time for most kids. I recall telling my mother I simply had to have a particular brand of school shoe. I don’t recall what the brand was now, they weren’t particularly attractive, they conformed to school uniform policy, but importantly they were obviously not traditional black/brown lace up shoes that parents or grandparents would think to buy for you (which amusingly today are cool and hipster). Wearing these non traditional shoes showed you weren’t a total geek, that you had some degree of control over your parents, and that you weren’t so poor or unfortunate that you were wearing “hand downs” (eg from an older sibling). I expect that Abercrombie & Fitch plays a similar function today for some teenagers.
I knew little about Abercrombie & Fitch other than they were a U.S. clothing chain that employed scantily clad male and female models in store, a long running stunt that earned them publicity, and no doubt attracted the attention of teenagers. I see people wearing Abercrombie & Fitch clothes because it is one of those chains that puts variations of its logo on t-shirts. I always find it interesting to see so many people who are clearly outside of the target market wearing such clothes, such as a granny wearing a Diesel shirt. It’s surprisingly quite common.
To find out more I looked up Abercrombie & Fitch on Wikipedia and discovered it was once an elite outdoors clothing store that went broke. New owners bought the brand and mailing list and launched a modern upmarket casual clothing chain with production in China. Its advertising and use of in-store models became famous and infamous. They rolled hundreds of stores across the USA and experienced serious growth during the booming 90s – as did many others (American Eagle Outfitters, Gap, Quicksilver etc).
So a marketing success story. Building not just mental and physical availability but also “brand equity” at very least within a target market of young teenagers. Except…. the fairytale ending (loyalty beyond reason delivering fat profits) is missing. Abercrombie & Fitch has been performing poorly, for many years, indeed their results would be truly awful if it weren’t for them opening some successful stores overseas.
Wikipedia reports “Following a dismal earnings announcement on August 2014 the company decided to drop its logo-branded apparel line”. Three months later their longtime CEO stepped down and the company announced dramatic changes to their advertising style, and also a new marketing strategy ditching the models and largely exiting the teen apparel market that delivers so much of its sales.
So this is presumably why no one uses Abercrombie & Fitch as a brand equity case study. As Professor Jenny Darroch observed they did everything right by the marketing textbooks on branding yet continue to suffer financially.
There will be theorists who (will now) argue that Abercrombie & Fitch didn’t have the ‘right’ sort of brand equity. These post hoc attempts to preserve the theory are unsurprising but pathetic. There is little doubt that Abercrombie & Fitch earned the classic sort of desirability at least amongst some teens, and they still have it, they are an excellent brand equity case, it’s just that their performance doesn’t fit the theory. Less trendy retailers like H&M, Uniglo, Forever 21 and American Eagle Outfitters have been stealing their market share for almost a decade now. The global financial crisis was blamed but the U.S. economy has been been growing for years now as have competitors.
What can we learn from this?
It’s another blow for ‘brand equity’ theory. It’s hard to find cases where equity might be something more than mental & physical availability – here is one and yet there are no signs of stellar returns, quite the opposite.
Perhaps it shows that this special sort of brand equity is a highly risky asset. Mental and physical availability are very robust, whereas brand equity beyond this can plummet in value/effect?
I prefer a more simple explanation. It seems that Abercrombie & Fitch’s management believed that their special sort of brand equity would protect them from competitors offering more interesting clothes at better prices. These competitors together had lots more stores and better mental availability.