The pandemic has had an impact on every industry. The fashion sector was also struck hard during these difficult times. However, one brand has endured and remained strong throughout this storm. At a time when companies such as Gap, J.Crew, and Guess are closing stores and attempting to reinvent themselves, American Eagle has grown to become a $3 billion brand. AE.com generates more than $1 billion in annual revenues on its own. American Eagle brand Aerie's revenue increased by 32%, and the company plans to establish 70 more locations this year. The corporation also introduced two new brands during the pandemic, Offline and Unsubscribed.
So, how did American Eagle Outfitters manage to stay one of the most popular brands among Americans? What is the secret behind its success? Read on to discover the complete solution to these queries. But first, let’s know the success story of this brand.
American Eagle Outfitters began in 1977 with a focus on casual and athletic items, including clothing, footwear, and accessories for everyday use and for sporting activities such as hiking. After successfully establishing their storefronts in malls, they were able to begin selling their own branded items at American Eagle Outfitters locations across the United States and other countries. Sales picked up quickly as the company progressed up the ladder. Within a decade, they had grown to 137 locations, 37 of which were in the United States. Although some reorganizations in the management and product range had a negative impact on the company at the start of the 1990s, CEO Jay L. Schottenstein's plan to turn this brand into a seller of signature pieces of niche apparel and accessories worked and pulled the company out of the quagmire.
American Eagle Outfitters had a tremendous decade with their NASDAQ listing in the 1990s. By that time, they had 167 outlets and a highly secure financial situation. With such great feedback about the brand, they quickly established another 90 outlets and increased their management staff, and shifted their attention to women's apparel and accessories. This plan worked like magic, generating massive profits for the firm and propelling it to a $1 billion valuation by the year 2000.
Aerie had a little over 100 sites by the end of 2016, and by the end of 2021, the figure had risen to roughly 215. However, Aerie isn't the only industry in which American Eagle is taking risks. Size enlargement and the addition of CBD-based goods are two of its most recent buzz-worthy developments. According to Brightfield Group, a cannabis-focused research group, the CBD sector has the potential to grow to a $22 billion industry by 2022.
On its road to where it is now, American Eagle Outfitters had to overcome a number of challenges. Employee strikes and lawsuits filed by competitors for allegedly copying their ideas are among the problems they faced. However, the firm has never allowed such setbacks to hinder its growth or operations; instead, the brand continues to provide what they have earned their consumers' trust for.
So, what are the top factors that drive the success of this brand and make it America’s favourite? Here is an assortment of the major elements that make up its success.
Gen Z is the target customer of American Eagle Outfitters. The success of American Eagle is due to a firm emphasis on its clients, according to AEO's worldwide brand president. This entails delivering on design, innovation, comfort, and quality, as well as interacting with customers in ways that go beyond just selling them clothes. Focus groups, market research, and even an in-house council made up of adolescents and twenties groups who assist with business decision-making have all been actively engaged in by AEO. All of this has given the organization a good understanding of the values, aesthetics, and buying habits of this age.
So, what does Gen Z expect from a fashion label? The answer is critical not only for AEO but also for the rest of the sector, as spending power is expected to grow by 70% by 2025. The comfort of today's youth is important to them. They want soft, comfy garments, but they also prefer marketing efforts that make them feel good in their own skin. This is now at the top of the brand's priority list.
As already mentioned in the point above, the brand is focused on producing comfortable clothes. Physical comfort is linked to a deeper sense of healthfulness and ease among Generation Z. According to American Eagle Outfitters, when a client wears the brand's clothing, they want to feel like themselves. According to McKinsey's research, Gen Z views consumption as a representation of individual identity and is drawn to companies that promote variety and authenticity. To that purpose, the brand launched the Aerie Real campaign in 2014, which emphasized body acceptance and inclusion. American Eagle Outfitters began utilizing a diverse range of actual women as models, including trans people and women with disabilities, in addition to race and body size. It also outlawed photoshopping.
White sugar is to the cupboard as ordinary denim is to the wardrobes. Each item is a staple that can be used on its own, but when combined with something else, they become more intriguing. With this in mind, AEO released the Ne(X)t Level 360 style jeans in 2017. These jeans are manufactured from a blend of denim and flexible fabric that adapts to the contours of their owner's body, making them one of AEO's newest denim offerings. This feature ties in perfectly with AEO's dedication to body acceptance since these jeans are not only available in a range of washes, fits, and wears to suit a person's own style, but they are also made to be worn comfortably by people of all shapes and sizes.
Aerie is one of the most rapidly expanding garment brands. The brand's big consumer base has been aided by the brand's newness combined with innovation. Aerie has a lot of room for expansion, and the business anticipates sales to approach $1 billion in the near future. Furthermore, the brand has a high retention rate and is one of the few that can generate growth across both digital and retail (store) channels.
American Eagle launched #AerieReal in 2014, promising to cease editing all Aerie images in order to empower women and promote true beauty standards. Since 2015, American Eagle has increased overall income by $514 million at a 4.5 per cent yearly rate. Aerie alone has contributed $330 million to American Eagle's overall income, growing at a 27 per cent yearly pace. Since 2015, Aerie has accounted for about two-thirds of the company's incremental revenue growth.
Aerie also aids in the dissemination of the company's diversity message. It has sought to be more inclusive of women of various shapes, sizes, and backgrounds, in contrast to the images presented by its competitors in the past. Hence, it can be said that Aerie is the game-changer for the brand and has significantly added to its popularity.
Despite the fact that AEO's products were a suitable fit for pandemic life, the firm had to come up with new ways to contact customers. For one thing, it has 1,095 outlets across the nation, all of which were forced to close due to the pandemic's early onset. AEO had been spending more on e-commerce and social media before the crisis, but these channels became critical once the crisis occurred.
During the quarantine, Aerie collaborated with Charli D'Amelio, TikTok's most popular user with over 80 million followers, to create a "positivity challenge" in which she urged fans to share what they were thankful for. They were aware that their clients were spending more time on their phones and on social media. As a result, they decided to go where their customers are and serve them with things they desire to wear. Customers were enticed to purchase online as a result of all of these initiatives. American Eagle Outfitters witnessed a 74% rise in income from digital channels across all brands in the second quarter. Even now, the brand is very much inclined towards online sales and makes its presence visible on different social media platforms to boost its connection with the customers.
The American Eagle Outfitters Brand is America’s favourite brand for not just one reason, but for multiple reasons that are mentioned above. AEO's effectiveness is dependent on more than just being current. Personalization is king in the retail world. Because of its concept of individualism and dedication to inclusivity, American Eagle provides goods and experiences that seem personal to its customers. The brand believes in smart strategies to retain and engage customers. It also makes sure that customers have a good in-store experience as well as digital experience while purchasing the American Eagle Outfitters products.