Urban outfitters by SamanthaAbraham

Fashion Brand Analysis DESN1658 Group Project Word count: 2193

Urban Outfitters, established by Dick Hayne and Scott Belair in 1970 (Urban Outfitters, 2017), has a longestablished foundation and comprises a multitude of stores alongside an array of areas invested in. As a result, Urban Outfitters as a brand has a strong disparity and independence from other market retailers of a similar level. The brand was originally labelled ‘Free People’ and comprised a small store located just across from the University of Pennsylvania selling “second-hand clothing, furniture, jewellery and home décor for college aged customers in a casual fun environment” (Urban Outfitters, 2017). Later in 1998, Urban Outfitters was introduced to European shores with its first UK store opening on Kensington High Street. Over the years, Urban Outfitters continued to grow in popularity and market shares alike, investing in unique retail spaces such as the J.Franklin Styers Nurseries to expand into opening a “retail store, an event space and a café” (Urban Outfitters, 2017). 2011 even saw the brand expand into bridal wear with its range BHLDN appealing to brides “in search of unusually beautiful things” (Urban Outfitters, 2017).

ory

BRAND HISTORY AND OVERVIEW

Urban Outfitters thrives on its strengths in its target market selection. The brand ultimately appeals to the fashionista who is not afraid to express their unique style through the combination of vintage qualities with a modern aesthetic, the brand itself quoting its focus on the “original customer” (Urban Outfitters, 2017) who has “longed for a store to indulge her creative side” (Urban Outfitters, 2017). Forbes (2015) denotes the brands appeal to the “tastes of the 18-28 year old demographic” (Petro, 2015) thus demonstrating its focus on a niche market. In analysis, the success of Urban Outfitters target market strategy lies within its consumers socially recognised as ‘cool’ which enhances their standing on the market place as a retail outlet everyone wants to be seen shopping in. Everyone wants to be individual and have others admire their “experimental” looks, consumers are the forefront of the consumer basis, trend leaders and fashion innovators, “a directional crowd, interweaving indie and pop culture with vintage sensibilities” (Walker, 2012). Driving success after past problems faced by the brand, Urban Outfitters has always remained strong in its marketing strategy which has enabled the brand to maintain its relationship with its consumers. Individuality is key to the brand’s personality (Dallabona, 2017) as well as the Brand Image. “Intimacy and uniqueness resulted in an unwavering bond with customers” (Urban Outfitters, 2017). The brand focuses on creating a special relationship with customers in all aspects, a place for creative minds to flourish “offering something truly unique to the UK market. They’re injecting a sense of novelty into the high street” (Urban Outfitters, 2017). Urban Outfitter’s tactics employ constant innovation and striving to collaborate in new projects to keep their consumers interested and engaged. The brand plays strongly on the theme of consumer intimacy and enabling them to create a strong relationship with the brand and a deep found connection with its values. Pushing boundaries and exploring new means of creativity works to inspire their creative consumers. Also key to their strategy is enhancing their in-store experience (Gill, 2014) with strong “aesthetics” (Walker, 2012), making the store environment “a destination in itself – beyond shopping and into the realm of concept consumerism” (Walker, 2012).

brand values

and benefits

Sofa Shot (Scheynius, 2013)

In terms of brand values, Urban Outfitters strongly focuses on preserving its individuality and creating for itself a unique presence on the marketplace where consumers fell they can express themselves in the clothes they choose to purchase. Becki Clark, womenswear buying manager, states how the brand is “very influenced by vintage finds” (Clark cited by Walker, 2012) which is “key to…[their] handwriting” (Clark cited by Walker, 2012). Thus, the brand can be seen to demonstrate an incredibly unique look, very difficult to find elsewhere on the high street which is contrastingly full of fad fashion pieces. Despite Urban Outfitters featuring elements of this, the unique qualities such as its vintage clothing stock takes the brand that step further, a key characteristic in a marketplace where everyone seeks individuality, thus its values surround this customer focus. Furthermore, Urban Outfitters strongly demonstrates and utilises in marketing strategy, the relationship and affection the brand comprises with dogs which can be evidenced in its partnership with Pet Plan and Barkly, a “dog walking service and smartphone app” catering for employees wishing to bring their canines to work worry free (URBN, 2016).

Group Shot (Scheynius, 2013)

Consumer benefits gained from shopping with the brand again revolve around the concept of individuality on the market place. In contemporary society, the modern consumer is obsessed with the idea of being unique which in the world of fad fashion domination, is a tough quest. Urban Outfitters strives to deliver its consumers at minimum a unique in store experience and ultimately the opportunity to thrive in creative aesthetics in order to develop their own identity and possibly to enable them to recognise the statement they desire to make on the market place (Urban Outfitters, 2017). The brand aims to benefit the consumer with more than just a retail environment but instead a place they can connect with â&#x20AC;&#x153;on an emotional levelâ&#x20AC;? (Gleeson, 2013).

CHALLENGES

Urban Outfitters has faced several challenges over its lifetime which have impacted the brand’s reputation in a number of ways. From 2011 to 2014 Urban Outfitters’ main problem was its failing product strategy (Petro, 2015) and shopping experience. According to Lutz (2014) many stores were "needlessly over-assorted and piecey, which made the shopping experience more difficult and less appealing”. The product choices didn’t fit its core demographic of 18-28 year-olds; “snarky graphic tshirts, pop culture-inspired visuals and garish colors, did not fit in with what Urban Outfitters' trendy, hipster crowd wanted” (Petro, 2015). Consequently, the brand experienced a dip in sales; sales declined 7% in the third quarter of 2014 (Lutz, 2014). As a result, Richard Hayne, the company’s founder, took over as CEO in 2014 and he decided to focus on altering the product line to suit the target audience, for example they approached Australian natural soap business Cedar + Stone after seeing the brand's Instagram page and decided to stock items in 87 stores (Collins, 2016). In addition, the brand aimed to declutter the stores to “fit the mature aesthetic) (Petro, 2015). As a consequence of these alterations the brand experienced a boost in sales and the “Urban Outfitters' 2Q2015 report showed that total net sales increased 6.9 percent yearover-year … record-setting sales growth for the company” (Petro, 2015).

Another issue that Urban Outfitters experienced in the past few years was the offending of many different ethnic groups and religions, as well as seemingly purposely trying to make a profit from a horrific incident; that incident being the Kent State shootings of 1970. In 1970, Kent State was Ohioâ&#x20AC;&#x2122;s second largest university, providing upwards of 21,000 students with the opportunity to pursue their dreams. However, due to violent anti-Vietnam war protests, carried out by thousands of students that had begun on the 1st May, the campus had been turned into a small warzone. On the 4th May, the National Guard opened fire on the students, killing 4, and injuring 10 students (Rothman,Time,2014).

ots (Urban

In September of 2014, Urban Outfitters released a ‘vintage’ sweatshirt with “Kent State University” written across it, as well as with what seemed like a blood splattered print (The Week, 2016). Many customers were horrified when they saw this item on sale as it appeared that the company was referencing the shootings. Immediately after the sweatshirt was released online, a huge wave of negative backlash amounted as word quickly spread of the item over social media, as well as BuzzFeed almost instantly posting an article about it (Van Dyke, 2014). The company attempted an apology and released a statement claiming “it was never our intention to to allude the tragic events that took place”, and that they were “extremely saddened that this item was perceived” (UO, twitter, 2014) like this. The company didn’t appear to apologise for their mistake, but rather denied that they themselves had done anything wrong and instead, blamed the consumers for taking offence to the product.

The seemingly unapologetic statement made matters for the company worse. Forbes published an article soon after the incident which claimed that Urban Outfitters had lost momentum towards the end of 2014, showing that sales had declined by 9% in Q4 of 2014 and 12% in Q1 of 2015 (Dillon, 2015). The company slowly regained its popularity and increased in sales after the unwanted attention surrounding the incident died down. This seems to be a recurring theme for the company as this was not the first and definitely not the only incident regarding selling offensive and questionable products. Another example was a tshirt that with a badge on it that closely resembled the Star of David patch that Jews were forced to wear during the Holocaust. Also in 2015 they released a grey and white striped tapestry with a pink triangle on it that was closely reminiscent of the clothing homosexual prisoners were forced to wear at Nazi concentration camps (The Week,2016). These are just a few of a vast number of controversies that the Urban Outfitters company has been part of, where they always appear to resort to the same option of deflecting the blame elsewhere.

wider

trends

Global economic trends can have many implications for a business’ marketing environment. One of the most recent global economic trends was the vote for the UK to leave the European Union which has proven to affect how a brand operates. With the UK pulling out of the single market, it creates an end to the free movement of EU nationals to and from the UK. Due to this, it could make it more problematic for ‘US companies with operations throughout the EU to relocate employees from other EU Member States to the UK and vice versa’ (Gent, 2017) which can reduce the labour market for the company perhaps leading to them employing those less-skilled for the job. This could be a big blow for Urban Outfitters, where part of their branding strategy is enhancing their in-store experience (Gill, 2004) where Walker (2012) implied that the store environment is “a destination in itself” as aforementioned. By employing those who will not create this ‘realm of concept consumerism’ (Walker, 2012) it can follow with their branding strategy failing and therefore having an impact on the overall look of the brand.

Brand equity refers to a “set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers.” (Aaker, 1991) This set of brand assets are something that the firm possesses which is superior to its competition – e.g. brand name or retail location. When considering the theoretical underpinnings of branding, brand assets need to be appraised and these assets group into five different sections: brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets. Once a brand name becomes recognized and valued by consumers, there becomes the opportunity to capitalise on the power of the brand name (Waters, 2017). Open Europe (2015) have indicated that Brexit could lead to Gross Domestic Product (GDP) shrinking by up to 2.2% by 2030 which could lower the spending activity of consumers as they won’t have as much disposable income and therefore businesses could face lower profit margins and can’t compete against competitors. Urban Outfitters brand focuses around the “tastes of the 18-28-year-old demographic” (Petro, 2015), however this could have bad effects on the company if Brexit has detrimental impacts on the UK. Joanna Faith (2015) stated that this age group in the current economic environment are ‘giving up luxuries to hit their savings goals’ (Faith, 2015) signifying that Urban Outfitters stores in the UK could face a lot more competition from more low budget retail stores such as New Look and H&M. In addition, it could affect the branding of the company in the UK, where they may lower prices or perhaps alter their target market to adapt to the new marketing environment in order to survive.

On the other hand, Urban Outfitters were one of the few brands during the recession to still thrive in the retail sector. This was due to their branding of ‘offering a good mix of merchandise people won’t find anywhere else’ (Dell, 2008) and Howard Davidowitz (2008) stated that “no other store looks like them” giving them the USP to survive in the difficult times, which could suggest that during the current marketing environment, Urban Outfitters may still flourish because of their risky and edgy brand since this is what helped them overcome a previous global economic trend. In the pre – digital age, brands were built with classic marketing strategies using traditional media like print and TV to push their latest campaigns at consumers. Although these traditional tactics will probably never completely disappear, today’s internet era consumers interact with chosen brands via new channels and it is important for companies to consider the influence of the internet in regards to their branding (BOF TEAM, 2013). With so many online platforms and technologies available, as well as Instagram having over 300 million monthly users, brands can use social media to earn personally invested customers. In March 2017, Urban Outfitters released a disappointing quarterly earnings report. The company generated $1.03 billion in revenue for the quarter, with earnings per share coming in at $0.55. Both figures missed analysts’ expectations and profit margins fell to 33% from 34.5% last year, due to the company’s increasing reliance on discounting to ensure customers keep returning to their stores. (Bukhari, 2017) This lag of sales has prompted Urban Outfitters to focus more on online retailing and sales over the internet increased at a double – digit last quarter. (Bukhari, 2017)

However, by maintaining social presences that mirror the activity of its followers, Urban Outfitters reels in foot traffic to its stores and loads of user-generated content that directly converts to transactions (Bohannon, 2014).Through social campaigns, such as #UOOnYou using Instagram and #NormCore that follows lifestyle trends, the brand inadvertently drives sales while still maintaining a close but casual relationship with its customer. The hashtag #UOOnYou follows user-generated content posted to Instagram which is combined on the Urban Outfitters Web site for shoppers to reference. The campaign acts as a reference point for fans to view products that have been purchased and enjoyed by other shoppers, enticing them to also purchase (Bohannon, 2014). Iconosquareâ&#x20AC;&#x2122;s 2015 Instagram study shows that 70% of Instagram users report having already looked up a brand on the platform, and 62% of users follow a brand just because they like it (Daley, 2015). Therefore, if youâ&#x20AC;&#x2122;re posting the right images, consumers soak up your marketing message without any hard sales pitches, leaving them feeling as though they were not pressured into buying your products.

“Like with all social platforms, Instagram was a bit of a gimmick to start off with. Many fashion brands saw it as just another platform they’d have to invest in and were unsure if it could be bigger than Twitter. But fashion brands quickly clocked that Instagram could be a hugely beneficial tool for them,” said Robin Clementson, head of brand communications at fashion agency I am Beyond. The visual nature of the platform means that brands aren’t just able to show off their products – they can also sell a lifestyle, linking back to the need for brands to promote an emotional experience for their intended audience (Roderick, 2015). Urban Outfitters has earned a following of 6.7 million Twitter followers which is noticeably less than their competitors such as Zara (16.7M) H&M (19.4M) and Forever 21 (12.6M). This demonstrates that the brand has some way to go to reach the same level of customers through this vital marketing channel to enable them to compete in the high street clothing market.

In summary, the project brief set upon the task of uncovering the theoretical underpinnings of branding in the current market place through analysing one successful brand and its development, moreover focusing on accounting how that company have regained success after past problems with their public image. Urban Outfitters has demonstrated a clear high street level exemplification of how a brand can undergo many challenges and controversies including offending ethnic groups and religions in its product design and lack of compassion in public apologies. However, with clear, structured brand strategy and management where, as a brand, Urban Outfitters are clear of their market stance and niche target market they are thus clear of the actions needed to appeal and effectively communicate with their consumers, including their successful social presence via New Social Media platforms in the ability to thrive that niche market they target through aesthetically selling a lifestyle and consumer image through their clothes documented as a brand touchpoint (Waters, 2017) through social media, thus Urban Outfitters coveting a successful â&#x20AC;&#x2DC;Brand Imageâ&#x20AC;&#x2122;(Waters, 2017). This, in summary, can be seen as the key to their success in surviving in the competitive high street market where they are clearly distinguished in brand values no matter of their controversies or market failures and thus, the loyalty they have with their consumers is maintained and thus their sales keep driving through. Urban Outfitters thus demonstrate the importance of letting future consumers become aware of the expectations they should have before buying from the retailer and be clear on the image they are buying into to thus represent on themselves.

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