Prepared by:

Peach Ablah

Robert Stauffer

Kevin Mason

Scott Southern

Table of Contents

1. Executive Summary…………………………………………………3

2. Background…………………………………………………………..4

3. Problem Definition…………………………………………………...5

4. Methodology………………………………………………………….6

a. Secondary Research………………………………………….6

b. Qualitative Research………………………………………….8

c. Questionnaire…………………………………………………10

d. Survey Methods……………………………………………....11

e. Sampling……………………………………………………....12

5. Data Analysis and Conclusions……………………………………12

6. Recommendations to Client………………………………………..18

7. Research Limitations………………………………………………..20

8. Appendix……………………………………………………………...21

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1. Executive Summary

At one point in time, Abercrombie & Fitch Co. held a solid piece of the extremely competitive

apparel market. Over the years, A&F has had to stay competitive against the industry giants like

American Eagle and Banana Republic, while fighting off newer business along the way. The company

has had little change since it took on the organizational culture of its Former CEO Mike Jeffries.

This stagnant company has to make some changes to stay competitive in their industry.

Through our research we attempted to understand why Abercrombie and Fitch is giving up ground to

their competitors and find appropriate recommendations for the company. By way of secondary

research, we gained a frame of reference on the company, customers and the market. This was

facilitated by looking at financial statements on Abercrombie and their competitors. Once we had a

grasp on Abercrombie and Fitch and their respective industry, our next step was to gain valuable

qualitative research. By holding a focus group with 7 of our peers, we were able to gain perspective on

the company from potential customers. The feedback from this focus group helped us to design our

online questionnaire. With limited funds, using a free online questionnaire was easily the best option.

With the use of our resource Qualtrics, we were able to create and distribute our survey with ease.

Using facebook, text messaging and email, we were able to send invitations to our friends that directed

them to the survey’s site.

The Qualtrics data was used to forward our understanding and help solve the research questions

we posed at the beginning of our research. Through analysis, we learned that Abercrombie and Fitch is

off the mark in their efforts to hit the 18­26 year old target market, due to it’s “not cool” brand image.

With a few open ended question, we were able to gain a feel on how our peers perceived Abercrombie

and learn what they associate closest to the company. Most of the responses mentioned either their

perception of “too young” reminding the of middle or high school, or the over the top atmosphere with

“over­sexualization” to ”overwhelming in store fragrances”.

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In our conclusion, we decided that there are a number of steps Abercrombie needs to take to be

able to weather the storm. They must adjust their prices and broaden their product line by adding more

sizes. These two corrections could definitely make a difference for the company. We think most

importantly, that they need to revamp their brand image, and this should also cause changes in their

stores. Lowering the music, raising the lights and removing the pungent smell could do wonders

attracting new customers and trying to regain past patrons. Another interesting thing to note, during our

analysis we found a link between the nationality of an individual and their perception of Abercrombie

& Fitch’s “coolness”. This proved that foreign markets are viable options A&F can attempt to pursue.

2. Background

We are conducting research regarding Abercrombie & Fitch Co. and their brands Hollister and

Abercrombie. Abercrombie Co. started in 1892 as a retail sporting goods store. In 1900, Ezra Fitch

bought a large portion of the company’s shares, and they changed the name to Abercrombie & Fitch.

After many differing opinions about the future of the company, David Abercrombie sold his half of the

company to Fitch, who turned the company into a sporting goods powerhouse. When Fitch retired in

1928, the company experienced many ownership changes. However, after continuous years of losing

profit, the company finally closed its doors in 1977. A year later, it was purchased by Oshman’s,

another sports retailer, but they continued to struggle and eventually sold the company to Limited

Brands in 1988. The new owners decided to split from the sporting goods industry and began to focus

mainly on apparel. Michael Jefferies was appointed president in 1992 and decided that the company

should focus on the expanding teen retail market. The clothes were strategically priced extremely high,

making the brand more exclusive and desirable. The company’s sales doubled in two years to $165

million and the company continued to grow for the next 15 years. At its peak the company had 1,014

stores between all of its brands. A&F began began to experience a decline in sales and consumer buzz

during the recession of the late 2000’s. The refusal of A&F to lower prices during this troubling

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economic period sped up the loss of market share. As a result of this decline A&F has lost a

considerable market share to the rest of the clothing industry. With competitors like American Eagle,

Forever 21, Banana Republic, PacSun, H&M all gaining value, Abercrombie needs to find ways to

become more relevant to reverse this trend. A&F is a part of the retail industry. Retail industries engage

in selling merchandise for personal or household consumption and render services to sell these goods.

A&F sells personal clothing. With the introduction of internet shopping the retail industry has changed

drastically in the way people prefer to buy their products. Rather than driving to a storefront, people in

A&F’s target market prefer to shop on their computers or mobile devices for convenience and this

change in buying methods need to be catered to. The retail industry is also changing in the way that

brands are perceived. Many people are becoming more price­conscious and are focusing less on the

need to have an expensive brand on their clothing attire. As the industry A&F changes, A&F needs take

notice and adapt in order to succeed.

3. Problem Definition

Our decision problem is: What are the reasons for Abercrombie & Fitch’s recent economic decline and

in what ways can Abercrombie & Fitch regain domestic market share?

This is important because if this problem is not looked into Abercrombie will likely continue to

lose market share and have to close more stores domestically, resulting in increased loss of revenue and

a drop in brand resonance. Through the use of some specially formulated research questions we can

evaluate the status of our company and what needs to be changed to reverse this negative pattern.

The specific questions we researched in order to make an informed decision were:

•Why is the older half of the Abercrombie & Fitch target market not shopping at their stores?

•Why is this company losing so much of its United States customer base but not foreign base?

•How much of A&F’s 18 ­ 26 target market is actually reached?

•What is the brand perception of Abercrombie & Fitch to college students?

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•What competitors are stealing away the Abercrombie & Fitch customers most?

•What does the target market associate with Abercrombie & Fitch clothing?

•What is least appealing to the older half of the target market about Abercrombie & Fitch brands?

•What do college­aged students look for in a retail store and clothing?

4. Methodology

a. Secondary Research

In last year alone, Abercrombie and Fitch has had to close nearly 20% of its stores in North

America due to profit losses. For years, A&F has been falling off the map. In the early to mid 2000’s

the business was fueled by wealthy young people wanting to fit in but since then the younger

generations have become more interested in more affordable, less flashy brands and A&F has failed to

adapt to changing market conditions. Cheaper brands that are more online­focused are becoming

popular in the age demographic A&F is mainly trying to target. A&F has been doing an unsuccessful

job of reaching their target market of teenagers and young adults in the 18­26 demographic. By losing

over 180 stores in North America A&F is clearly losing a large chunk of its market share with

America’s youth. Despite the hindering western market Abercrombie has had success recently in

Europe. Opening multiple flagship stores in the past year they are quickly becoming relevant in

European fashion.

While primary data is important in answering the research questions, secondary data can also

be very useful. By analyzing a mixture of internal data such as comparable sales and external data like

published annual reports, we can answer a few questions regarding declining market share, domestic

and international business strategies. Using the investor presentations and annual reports to the SEC

one can gain a frame of reference on the company as a whole. This secondary data helps to show how

the company is doing and illuminates any weaknesses. With the data given from their annual financial

report one can see that they are losing their place in the domestic marketplace, this problem is clearly

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covered under their Long Term Strategic Plan (2014) “[We must begin] Recovering productivity and

profitability in our U.S. stores”. From 2012 through 2014 Abercrombie’s comparable sales have gone

from ­1% to ­11% to ­7%, respectively. This downward slide in profitability has led to mass store

closings, creating a barrier between the company and their target market through availability issues.

But, this loss in the domestic market share has forced them into a different market.

With their falling domestic presence, Abercrombie has began focusing their attention on other

options, as per their 10­K form for the SEC, “our growth strategy relies significantly on international

expansion, which adds complexity to our operations and may strain our resources and adversely impact

current store performance.” The company as a whole went from about 31% of their sales from the

international market in 2012, to almost 39% in 2014. This information implies that the company is

aware that their best shot at gaining a larger portion of the market share is to branch out into the

international marketplace. This answers our research question regarding what locations of A&F stores

are succeeding the most. This plan is solidified by the company opening up 5 international stores in just

the 3rd quarter of 2014 (Aug­Oct), this is in addition to the 163 stores they have already opened outside

of the United States. The decrease in domestic sales over the past few years has led to mass American

store closings, while raising the percentage of their total sales being made internationally. Showing that

their international stores locations are having the most success. The main nations the company is

focusing on are located in Asia and Europe. Tokyo, Hong Kong, Munich, London, and Amsterdam are

some of the main markets A&F has stores in. This is partly due to the high luxury consumption in these

areas.

As with most retail stores during this advanced technology age, Abercrombie has been,

“...advancing our direct­to­consumer business, which should benefit from multiple investments we are

making in the business and from our growing international presence.” The choice to help consumers

make more purchases online, while fiscally positive, might have challenged the Abercrombie brand

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image. The in­store aesthetics has always been a huge part of the brand, as quoted by their 2012 SEC

annual report. "The Company views the customer’s in­store experience as the primary means for

communicating the spirit of each brand. The Company emphasizes the senses of sight, sound, smell, ...

music, fragrances, rich fabrics and its sales associates to reinforce the aspirational lifestyles represented

by the brands.” Their advancement in use of technology could help trigger a successful revitalization of

the company and be used as a tool to rebrand themselves to the American consumer. Abercrombie’s

main competitors utilize online shopping stores and mobile shopping to gain more customer base in this

changing industrial era. For instance H&M, a major competitor, has been using an online growth

strategy to expand as a brand. The results have been an expansion that is the exact opposite of A&F’s

recent decline in stores and market share.

Our secondary research helped us find out the true numbers on how many domestic A&F stores

have been closing. We also learned that A&F is doing better in foreign markets. We realized that A&F

competitors are utilizing online tools and that the brick and mortar stance A&F holds may be holding

them back in terms of reaching their target market. Our qualitative research helped us go more into

depth about brand perception and what the A&F target market thinks about shopping, the A&F brand

and the A&F competitors.

b. Qualitative Research

For our form of qualitative research we thought it would be most beneficial to hold a focus

group in which we each brought in a few of our personal acquaintances and directed their conversation

with our research questions. We thought this may give us a greater understanding of the 19 to 25 year

old demographic views in regards to Abercrombie & Fitch Co. and the retail industry in general. Each

group member bringing in participants gave us some diversity in our research ages, genders, friendship

circles, and backgrounds because all of our group members come from different areas and have had

different college experiences. We took notes during the focus group and allowed the participants to

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play off each other and let the conversation and comments come naturally so that we received a variety

of feedback to help us with the company’s problem. Below are the main findings from the project.

• All seven participants agreed that Abercrombie & Fitch Co. makes them think of middle school

and that it is outdated to wear

• Only one participant knew that Abercrombie and Hollister were owned by the same company

• Three of the girls and two of the boys said that when they thought of the brand they associated it

with the large name or logo on the front of the clothing

• All seven participants agreed that if they saw someone on a college campus wearing Abercrombie

or Hollister they would be shocked and embarrassed for the individual

• The participants agreed that anyone who still wears these brands at our age doesn’t care to branch

out for other brands or stores, is from another nation, or just does not care about fashion

•Two participants guessed that the average age of Abercrombie & Fitch Co. consumers is 10­13

•Five participants guessed the average age of the consumers is 13­15

•All participants agreed that it is too overpriced for the clothing quality

•Two of the girl participants said they now shop at stores that are similar to Tobi, Express, Pacsun

and boutiques

•The other two girl participants said they now shop at Forever21 and H&M

•The boys all agreed they shop for brands that are more subtle about their name or brand logo

•All participants mentioned college­aged adults do not shop at this company because the

competitors of Abercrombie & Fitch Co. are priced much cheaper

•All the participants said they had not bought from either store for 4­7 years

•Three participants said A&F’s products are why they no longer purchase from these stores, they

haven’t really changed their style or innovated

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•All the participants mentioned how badly the store is set up, they all think it is too dark and the

smell and music is overpowering, the doors also split to the right and left for the men and women’s

separate sides and it makes the entrance unwelcoming

•One participant mentioned that their advertisements are try to use sexual appeal using too young of

a demographic, their advertisements often include shirtless 13­16 year olds, the other participants

agreed

c. Questionnaire

The questionnaire (Appendix a) was 17 questions long and administered online using the

Qualtrics software. The main focus of our questions were brand perceptions, clothing and brand

desires of the 18­22 target market, the competitive qualities of A&F and its competitors, and the

strengths and weaknesses of the A&F and its competitors. We also used our research questions to

further explore the effects of gender, age and country of origin on the consumer’s perception of the

Abercrombie brand. We used a variety of questions in order to have widespread answers that

covered a wide range of our research questions. We used open­ended questions, rating scales,

ratios, semantic questions and questions that relied on competitor comparisons. We mainly

focused on using close­ended questions because of their usability in quantification and in

analysis. The semantic question towards the end of the survey was used to compare the four main

competitors to Abercrombie based on quality, price, fashionable levels, advertisements and brand

image. The open­ended questions at the end of the survey gave us a chance to fully understand how the

consumer views the brand. This allowed customers to explain how they really felt about the company

and provide information that would not otherwise be gained by the survey. The survey was designed to

start out with “warm­up” questions to see how consumers shop in general and then work towards more

brand­specific questions in different formats.The more difficult questions were towards the end of

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the survey to persuade completion of the questionnaire by the participants. This is also where the

more difficulty designed questions were at such as the semantic questions, the open­ended

questions and the ratios. We finished the questionnaire with demographics that asked about age,

gender and country of origin. The question that asked if the participant was an international student

was vital because after our secondary and qualitative research, we wanted to go more in depth into how

international views of our product are different from domestic views. We used branching questions

near the beginning to set apart people who had bought items from Abercrombie before from those who

hadn’t and we used branching questions near the end to set apart the domestic consumers from the

international consumers.

d. Survey Methods

Based on our resources, we felt that the best survey method would be an online questionnaire.

We used the Qualtrics software to design our survey and distributed the link to the survey over text

messaging, Facebook, Twitter, and other social media sources. This was the cheapest way to distribute

and make the survey and also to get the quickest responses. The group we were targeting through our

research was around 18­26 and this is a great way to reach this demographic because they rely on social

media in their daily lives. They would view an online survey as quick and unobtrusive unlike writing

out and answering a paper survey. We considered doing paper surveys because of the use of

open­ended questions in our survey but we realized that this would be more expensive and take a lot

more time than we had since the project was on a time constraint. The one negative of our surveying

method is that we did not get as large of a variety of respondents as we would have hoped because it

was distributed via our social media sites and our personal connections.

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e. Sampling

Our sampling method was partially due to our time and resource constraints. This included

money restraints and the data collecting tools we had at our disposal. We used non­probability

convenience sampling for this survey. We decided not to use judgement or quota sampling because

these forms were too restrictive. Non­probability sampling made it easier to reach respondents, quicker

to reach them, and less expensive. We calculated the sample size we needed at 3011.8 people. We did

this by using a confidence level of 95% with a z­score of 1.96 and a standard deviation of 1.4. We

plugged this into the equation n=((z^2)/(T^2))*s^2 to get our n value. We ended up with 46 participants

completing the survey. Nearly all of these participants were college age and in the demographic we

were really asking questions about. This was much lower than our suggested sample size because of

our constraints. We sampled people that were easiest for us to reach, that is why it was considered

convenience sampling. We targeted the age group of 18­26 with our sampling and used social media

and hyperlinks in text messages to reach out to this group.

5. Data Analysis and Conclusions

We used our questionnaire to collect data in order to answer research questions like, “Why is

the older half of the Abercrombie target market not shopping at their stores?”, “How much of their

target market does Abercrombie & Fitch actually reach?”, “What is the brand perception of

Abercrombie to college students?”, and “What competitors are stealing the most Abercrombie

customers away?” These graphs and analyses have helped us answer questions that could be crucial to

the future success of the Abercrombie brand. We moved our Qualtrics data into SPSS, a data analysis

program, to create charts and graphs in order to make our data easier to analyze. The following section

breaks down the results from our survey in regards to our research questions. Overall, we found that the

Abercrombie & Fitch brand is viewed negatively by the 18­26 age group and that most believe it has

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become a brand for much younger demographics. We found ways that A&F could reposition their

brand image and clothing in order to attempt a larger reach of this older demographic. We also found

that A&F could increase revenues by focusing less on domestic markets in the United States and by

moving even more into international markets. These was seen by comparing survey results from

international students with the survey results of domestic students.

Why is the older half of the Abercrombie & Fitch target market not shopping at their stores?

In order to determine why this age demographic was not shopping at their stores, we asked

questions about the brand qualities. We focused on how fashionable the brand was, the quality of the

brand, the price of the brand, the advertisements of the brand and the overall brand image. We also

asked consumers to rate how cool they thought the brand was to see if this was a problem with this

target market’s consumption and how long they would spend in the store. The final open­ended

question asked the consumer to specify changes that would help the Abercrombie and Fitch brand. This

also helped us answer this research question. In our semantic question you can see the ranking of

Abercrombie as a whole along with the ranking of each of our five main brand comparison qualities

(Appendix f­3). The circled mean shows that there was a high overall brand feeling with 4.15/5 mean

for A&F. This contradicted our hypothesis that the brand would score low on these levels. Although

this is true, the numbers for each brand based quality were very low. The sample screenshot of the

question shows how it was set up to analyze A&F and its competitors (Appendix f­4). Competitors

scored very high frequencies in why consumers liked the brand. This means that competitor brands

were recognized for specific brand characteristics while A&F was across the board and consumers

could not attribute one specific positive to the brand. Pac Sun, American Eagle, H&M, and Forever 21

all had at least 14 participants agreeing on why the brand was favorable and receiving a high score.

A&F’s highest brand characteristic received only six participants agreeing. This showed that one reason

this target market may not shop in these stores is because competitors hold a specific positive

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characteristic (such as price or quality) in consumers minds while A&F does not have a special brand

quality or identity. The second question that answered this research question had consumers rank A&F

on a coolness scale (Appendix g­1). This showed a mean of only 1.67 out of 5. This means that a main

problem with this brand is how “cool” it appears to peers. It can be seen that store atmosphere is

attributed to the decline in sales to this demographic (Appendix f­5). Abercrombie had a maximum of

25 minutes (only ¼ of the allocated time) chosen. This means that none of the research participants

wanted to spend more than this in the store. This is half less than the second lowest store, which was

American Eagle. With a mean of 3.65 minutes it shows that no participants wanted to spend time in

Abercrombie. Many of our open ended answers about improving the brand suggested making the

advertisements less sexual, being more trendy, taking the brand name off of clothing, and changing the

store atmosphere. This answered our research question as well.

Why is this company losing so much of its United States customer base but not foreign base?

We used questions to compare international views of A&F to domestic views of the brand. It

was found that the overall mean of 1.67 out of 5 that included all survey participants was brought up a

full .1 by the international students rankings (Appendix g­1). International students ranked A&F more

than twice as “cool” as Americans did (Appendix g­2). The International students gave A&F a mean

“coolness” ranking of 3.5 out of 5 while the Americans gave it a ranking of 1.57 out of 5. By using

hypothesis testing we had to reject our null hypothesis that there is no relationship between national

classification and coolness rating (Appendix h­1). This was because the p­value was .002, which is less

than .05. We had to accept the alternative hypothesis that there is a relationship between national

classification and coolness rating. This data overall answered the company is not losing much of its

foreign base but much of its United States customer base because of the difference in the positive

perception of the brand.

How much of A&F’s 18 ­ 26 target market is actually reached?

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We worked to find general statistics answering this question by asking the participants how

many times they had been in an Abercrombie store, if they had purchased anything from the store, and

if they would go there again. We discovered that over 95% of our participants hadn’t been inside of an

A&F since they turned 19 (Appendix d­1). 4.7% had not been in the store since they were 0­11. 51.2%

had not been in the store since they were 12­14 and 39.5% hadn’t been in the store since they were

15­18. Only 7% had been in the store since they were 19­21 (Appendix d­1). Although this is true, we

found that 97% of our research participants had been inside an A&F store at least once in their lifetime.

Only 55.8% (or 24 research participants) had made a purchase from the store while they were inside.

44.2% did not make a purchase while they were there (Appendix d­2). When asked the likelihood of

purchasing another product from an A&F store consumers in this demographic showed group­wide

low­interest. On a scale of 1 to 5 the mean was 1.39 and the maximum value was only a 3 (Appendix

e­1). This meant no one would definitely buy a product from this store. These results showed that A&F

is reaching nearly none of this age group and that the entire demographic shows large amounts of

disinterest in the brand in the company.

What is the brand perception of Abercrombie & Fitch to college students?

College age consumers perceive the Abercrombie brand as outdated and irrelevant. It was once

a major brand popular amongst high school and middle school age children but is no longer seen as a

popular clothing line. This can be seen from our open­ended questions and from our semantic question

and coolness rating. Our semantic question asked research participants to rank the brand image of A&F

and its competitors. We found that only 5 people attributed a positive ranking of A&F to its brand

image (Appendix f­3). In one open­ended question we asked for participants to describe the A&F brand

in one word or a short sentence. The responses we received were very similar across the board. Some of

these included young, middle school, smelly, and outdated. Our coolness ranking of the A&F store

showed a mean score of 1.67 out of 5 (Appendix g­1). These results all show that the A&F brand has a

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negative perception among this demographic. Many attribute this to the store atmosphere and the

overall trendiness of the brand. They feel it has stayed too stagnant in its creativity and clothing and it

makes the styles that A&F promotes seem like what the age group wore in middle school. This makes

the not want to wear it anymore.

What competitors are stealing away the Abercrombie & Fitch customers most?

Through our secondary research and focus group we found that Abercrombie and Fitch’s main

competition includes Pac Sun, Forever 21, H&M and American Eagle. These stores are located in most

of the same shopping malls that A&F operates in and directly compete with them by offering similar

clothes with similar pricing structures. When participants were asked to allot an amount of time to

spend in 5 different stores it became clear that A&F had fierce competition. Of 100 minutes given

participants chose to spend only 3 of those minutes in an A&F retailer on average (Appendix F­5).

Other retailers such as Pac Sun, H&M, and Forever 21 had time allotments of nearly a half hour

showing that consumers would much rather spend time in stores other than Abercrombie and Fitch

retailers. This is also demonstrated by the answers to our question asking participants to rank 5

different retailers from least to most favorite. According to the data consumers ranked A&F at 3.1778

out of 5 on average showing that A&F is not viewed as a consumer favorite (Appendix F­1). We could

see that, when ranking apparel stores from 1 to 5 including A&F’s top competitors of H&M, Pac Sun,

Forever 21 and American Eagle, 15 ranked A&F as their favorite store and 10 ranked it as their least

favorite (Appendix f­2). Although this was surprising it showed that the consumers that truly dislike

A&F dislike it very avidly. We think that many may have ranked it high because of a sense of disdain

with all of A&F’s competitors. Some of these competitors are having problems similar to A&F’s with

reaching this target market.

What does the target market associate with Abercrombie & Fitch clothing?

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Abercrombie and Fitch’s target market thinks of the ambiance of the store when they see the

clothing. This would be good branding if the store atmosphere wasn’t so abrasive with the loud music,

low lighting, and pungent cologne smell. Most of their target market views them as outdated and

unattractive. They are currently trying to reach out to the wrong demographics and should focus on

younger generations and international consumers. These younger/international consumers have a more

promising view of the brand and are more likely to shop at A&F.

What is least appealing to the older half of the target market about Abercrombie & Fitch

brands?

The older half of the target market reported that they think of middle school and high school

when they see the brand name or logo. This outdated clothing line has already lost most of its older

demographic, so it would be wise for the company to stop trying to satisfy the market that it has already

lost. They also said that they didn’t like the fact that Abercrombie and Hollister uses their clothing to

advertise by putting huge logos and brand names on them. In our research, we found that four people

took into account how fashionable the clothes is, as well as the brand image when making the decision

of how they feel towards the Abercrombie Co. (appendix g­3). If they are going to use their consumers

as walking billboards, the clothes should be cheaper for the consumers to acquire.

What do college­aged people look for in a retail store and clothing?

College­aged people are much more cost­conscious than the younger part of the target market.

This turns them away from the high prices that Abercrombie Co. offers. When asked how they feel

towards the Abercrombie brand, the majority of participants reported that they took price into

consideration (appendix g­3). These college­aged people look around for the best prices before making

a final purchase decision. It is well known that prices online are most likely cheaper for the same

products that are found in physical stores. This is a big threat to the two Abercrombie brands, because

both Hollister and Abercrombie & Fitch operate on an excluding platform by strategically pricing their

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products higher than the competitors. We asked a few questions to specifically see how much time this

age group allocated to shopping for every two weeks and how much money they had per month to

spend on shopping. This helped us determine what this age group really looked for in a retail store in

order to fit with their resources. We found that 24 of the research participants only had a budget of

$0­100/month to spend on clothing (Appendix c­2). 17 of the participants shop only one time every two

weeks and 16 shopped only 2­3 times per week (Appendix c­1). This showed us that college students

are looking for clothes that are cheap and quick to buy. This showed us that A&F is mispositioning

their brand by being more expensive and by being more of a brick­and­mortar store. This age group

does not put aside a lot of time or money to shop and wants something fast­­such as an online based

store.

Demographics of Research Participants

Our research participants were mainly in the age range of 18­26. 29 of the 46 participants were

21 to 22 (Appendix b­1). This meant a full 70.7% of our research group was in this age bracket. 7 of the

participants, or 17.1%, were 19­20 and 5, or 12.2%, were 23­26 (Appendix b­1). Our research group

was closely split between females and males. 61% of the participants were female and 39% were male

(Appendix b­2). We purposely worked to make most of our participants in this age range so that we

could see why this group specifically was not purchasing from the A&F stores. This is why in our

hypothesis testing there did not seem to be a relation between age and coolness rating (Appendix h­1).

We had to accept our null hypothesis that there was no relationship between age and coolness rating.

This is because almost all of our research participants agreed that the coolness rating of A&F is very

low since they all were in the same age range.

6. Recommendations to Client

In regards to pricing, we believe that Abercrombie Co. should lower their prices to match their

competitors. This would allow more of their target to afford their clothes and give them a greater

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competitive advantage than they currently have. Although this will lead to a decrease in profits, it will

allow the company to regain some of its lost customers. In order to capture even more of the market,

Abercrombie Co. could offer a bigger line of clothes to make the brand available to overweight people.

This goes against the desired target market, but Abercrombie Co. needs all of the help it can get during

this period of decreasing profits. The store atmospheres could also use a lot of redesigning. We think

that it would be beneficial to make the entrance more inviting by opening it up and showing some of

the products in the windows. The loud music is very abrasive and should be turned down. It is bearable

to stand to be in a store with bad music if it is faint, but if customers don’t like the music that is blaring

out of the store, they will not go inside. The low lighting of Abercrombie Co. stores make it difficult to

see the clothes as it would be in normal lighting. This might lead a customer to buy something and

decide that it is not the color that they expected. This leads to more returned products and profit loss. If

the company kept the same models and put company clothes on them, I think that it would attract more

customers. The beefcakes and female models make average people feel insecure and unworthy of

wearing the brand. As the industry continues to change, Abercrombie & Fitch needs take notice of its

competitors and adapt to more modern pricing and advertising strategies in order to stay successful in

the retail clothing market.

After analyzing our data, we found that their is a significant relationship between a student's

nationality and their perception Abercrombie & Fitch’s “coolness”(Appendix G.1). This leads us to

believe that Abercrombie should be focusing a lot more of their resources in foreign markets to help

raise revenue. Investing in foreign markets such as the Asia Pacific geographical could help get

Abercrombie & Fitch back on their feet.

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7. Research Limitations

The biggest limitation that we had while conducting our research was our sample size.

Theoretically, we should have surveyed 3,012 people to get an accurate depiction of how the market

feels about the Abercrombie brands. However, we were only able to reach out to 46 people, which does

not accurately represent Abercrombie Co.’s entire target market because all of these respondents were

between the ages 19 and 25. We distributed the surveys through text and Facebook. However, if we

would have had more time and money, reaching all 3,000 people would have been more viable. The

survey was distributed to about 60 people, 14 of whom serve as our non­response bias.

20

8. Appendix

a. Questionnaire

21

22

23

24

b. Participant demographics

1.

2.

25

c. Participant shopping habits

1.

2.

26

d. Participant Abercrombie & Fitch store specifics

1.

2.

27

e. Likelihood to buy another product from an Abercrombie & Fitch

store

1.

Descriptive Statistics

N Minimum Maximum Mean Std.

Deviation

On a scale of 1 to 5,

how likely are you to

buy another product

from inside of an

Abercrombie store?

23 1 3 1.39 .656

Valid N (listwise) 23

f. Abercrombie & Fitch ranking against competitors

1.

Descriptive Statistics

N Minimu

m

Maximu

m

Mean Std. Deviation

Rank the following

apparel stores in

order from 1 to 5 (1

Least Favorite; 5

Favorite)

American Eagle

45

1.00

5.00

2.7778

1.14592

Pac Sun 45 1.00 5.00 2.6444 1.19003

Abercrombie 45 1.00 5.00 3.1778 1.58529

28

H & M 45 1.00 5.00 3.1111 1.40166

Forever 21 45 1.00 5.00 3.2889 1.64624

Valid N (listwise) 45

2.

3.

ABERCROMBIE N Min Max Mean Std

.

De

v

Match your feelings towards each brand as a whole using the smiley face ratings. Abercrombie

40

1

5

4.15

1.075

29

To what extent was your decision made based off of the following: How fashionable the brand is?

4

1

1

1.00

.000

The price? 6 1 1 1.00 .000

The quality? 5 1 1 1.00 .000

The advertisements? 1 1 1 1.00 .000

The brand image? 5 1 1 1.00 .000

Valid N (listwise) 1

4.

30

5.

Descriptive Statistics

N Minimu

m

Maxim

um

Mean Std.

Dev

If you were told you must spend 100 minutes total at the

following apparel stores, how much time would you

spend in:

Pac Sun

4

1

.00

100.00

28.41

46

29.674

04

Forever 21 4

1

.00 100.00 26.59

76

25.178

67

Abercrombie 4

1

.00 25.00 3.658

5

6.4142

8

American Eagle 4

1

.00 50.00 12.31

71

14.409

09

H & M 4

1

.00 65.00 29.01

22

19.857

77

Valid N (listwise) 4

1

g. International students vs. American students on A&F “coolness”

1.

N Minimum Maximum Mean Std.

Deviation

31

Where would you mark your satisfaction

with the Abercrombie brand based on

your perception of 'coolness?’

3

9

1 4 1.67 .898

Valid N (listwise) 3

9

2.

Group Statistics

Select your

classification.

N Mean Std.

Deviation

Std. Error

Mean

Where would you mark

your satisfaction with

the Abercrombie brand

based on your

perception of 'co...

American 37 1.57 .801 .132

International 2 3.50 .707 .500

h. Age range and nationality in relation to A&F “coolness”

1.

1) H ₀= There is no relationship between age and “coolness” rating

1) H A =There is a relationship between age and “coolness” rating

2) H ₀=There is no relationship between national classification and “coolness” rating

2) H A =There is a relationship between national classification and “coolness” rating

32

Coefficients a

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1 (Constant) ­.884 .919 ­.962 .343

Select your age range. .180 .233 .112 .771 .446

Select your

classification.

1.923 .583 .478 3.299 .002

a. Dependent Variable: Where would you mark your satisfaction with the Abercrombie brand based on

your perception of 'coolness’

33

References

Abercrombie and Fitch Co, “Form 10­K”, UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Years 2011­2014

Abercrombie and Fitch Co, “Investor’s Presentation”, New York, Years 2011­2014

34