If I had a time machine, I’d go back to just two years ago, Q2 2022, and buy ANF stock when it was still under $20. Now, it’s hovering around $150, and some analysts are calling it the “comeback of the decade.” In 2016, the brand was considered “America’s most hated retail brand” by the American Customer Satisfaction Index. So, how did the company rise from the ashes to become a major success today?
I’m convinced that part of the answer lies in their digital strategy. Samir Desai, Chief Digital and Technology Officer, said, “The Abercrombie and Fitch Company business through COVID saw their business become 50%, almost 60% digital, so a big spike in digital.” As we’ll see in this brief overview, the company is doing a lot of things right. Let’s review their sales channels, policies, and marketing initiatives.
Overview of ANF and Q2 2024 Performance
Before looking into the brand’s impressive results, let’s take a moment to look at the brand’s history and its recent strategic shift. Abercrombie & Fitch is an American retailer known for its casual, preppy clothing targeting young adults. Founded in 1892, the brand gained popularity in the late 1990s and early 2000s for its exclusive image. At that time, A&F was all about the “cool, attractive kids,” with dimly lit stores, shirtless models, and loud music. I can still remember the overpowering cologne that was constantly sprayed around the store. However, this approach began to alienate customers as they started expecting more authenticity from brands.
In recent years, A&F has completely rebranded, moving away from its controversial image. The company focused on inclusivity, modernized its product offerings, and adopted a more diverse marketing strategy. This includes using real customers in campaigns and promoting comfort and versatility in its clothing lines. Additionally, and what matters to us in this article, A&F has improved its ecommerce presence and digital shopping experience, which has helped the brand reconnect with a broader audience and stay relevant in a competitive retail industry.
And this plan seems to be paying off: The stock has surged about 89% so far in 2024, following an even more impressive performance in 2023. According to Dana Telsey, analyst at Telsey Advisory Group, “While the market may have been looking for a stronger guidance lift for the year, given momentum across the business, we see a beat and raise as impressive given a moderating top-line outlook in response to a choppy macro environment across many of Abercrombie’s specialty retail peers.” Sales of the A&F brand increased by 26% in Q2 2024, and by 17% for its Hollister brand. The company expects an annual increase of 12% to 14%. However, Abercrombie CEO Fran Horowitz now warns of “an increasingly uncertain environment.”
I have no doubt that the company’s efforts in increasing their ecommerce sales contributed to this performance. A&F CFO Scott Lipesky explains, “Digital has been doing well in double-digit comps we’re seeing across channels […] Day in, day out, we are making investments in that experience across apps, across mobile web. And we are seeing that come through.”
So, what’s A&F’s secret to generating more online sales? Is it purely the product that is more attractive to customers, and mechanically increased online sales? And could there be room for improvement? Let’s look at a few key aspects of their online business and see what the brand is doing right.
Sales Channels Mix
It looks like A&F primarily operates through their direct-to-consumer (DTC) website and app, but some of their items can also be found on marketplaces. Let’s quickly cover these alternative channels before analyzing A&F’s own channels.
Marketplaces
When looking at the top marketplaces (excluding resale of used items on eBay or Vinted), it appears that A&F clothes are not listed—only their perfume and cologne are available. I see this as a positive: the brand aims to position its products as “entry-level luxury,” so it’s better for them to maintain control over the entire customer shopping experience. This way, they avoid the risk of sellers listing counterfeit or damaged items and potential customer service issues that could harm the brand. Additionally, A&F’s brand is strong enough to generate significant product searches off Amazon, allowing them to collect more data on their customers and offer a more tailored shopping experience. It was a smart move to have Amazon sell A&F gift cards, as this drives traffic from Amazon to the retailer’s own site.
I still think A&F should register their brand on Amazon and Walmart Marketplace—not to list their products and sell directly, but to have control over existing content. The listings for their colognes are controlled by third parties, and I believe it would make sense for the brand to manage these pages. When searching for “Abercrombie & Fitch Hoodie,” I don’t find their items, but I do see a brand with a similar aesthetic to some of their older collections. I wonder if this is an IP violation, but it could pose a problem, albeit nothing too serious. I didn’t see anything like that on Temu or Shein, fortunately.
Overall, A&F’s strategy regarding marketplaces is consistent, and I don’t think they should sell on Amazon or Walmart, as it wouldn’t align with their brand image.
A&F DTC Website
I won’t dissect every element of the UI of abercrombie.com, but I’d like to highlight a few key aspects. And let me tell you, I’m very impressed with what their team has achieved.
The website is overall clear, easy to navigate, and the aesthetic perfectly fits the brand, in my opinion. It’s easy to find the items I need, and the homepage does a great job of showcasing recent products, current deals, and other relevant information. Bonus points for the banner informing customers about the threshold for free shipping.
The product pages are just as good as the homepage. They offer clear navigation, with all relevant information easily accessible (size charts, shipping and returns info, details on materials used, etc.), and engaging visuals with a good mix of product and lifestyle pictures.
The shipping policy seems coherent, although the various delivery options can be a little confusing. There’s standard delivery, two-day, next-day, and sometimes same-day delivery available at different price points. I tend to prefer when retailers display specific dates rather than just how long it takes.
The returns policy makes sense: a 30-day timeframe and a $7 fee for the return label. A&F makes good use of their stores, offering free in-store returns, which can drive foot traffic and increase customer lifetime value. I’d like to see the company offer the first return for free (it’s often difficult to pick the right size when ordering clothes from a brand for the first time), but overall, this policy is reasonable. Speaking of their stores, A&F allows customers to check an item’s availability at specific locations—a great example of providing a solid omnichannel experience, which is crucial for brands like this.
The “How to style it” section has become wildly popular in the fashion industry, and for good reason—it’s a great way to cross-sell products. I believe A&F could take it a step further by incorporating personalization and/or more engaging visuals, such as lifestyle images.
The reviews page is clean, seems authentic, and contains all the information relevant to the customer. I appreciate seeing user-generated content (UGC) and customers uploading pictures of themselves wearing the clothes, though I understand it might not fit within A&F’s website aesthetics. Perhaps a compromise could be made, where the brand selects which pictures to display on the site. It might reduce some authenticity, but it still shows the clothes on regular people in a regular environment.
Finally, the “Purpose” page is well-designed, easy to read, and conveniently displays a lot of real initiatives the brand is taking. However, it looks a bit too polished and might feel more authentic with some videos of the people involved.
Abercrombie and Fitch App
I downloaded the A&F app, and it’s just like their website: clear navigation and an aesthetic that fits the brand. The app crashed once, but other than that, it was easy to find the same content I found on my desktop. I also saw personalized recommendations relevant to my browsing history and the items in my cart, making for an enjoyable shopping experience.
Mobile drives a lot of revenue, especially among A&F’s target demographic. It’s no surprise that the company has invested in it. I’d like to highlight two innovative features that A&F has introduced. The first is called “This or That,” which allows users to pick two items in the app and send them to friends to ask for their opinion. I’m not sure about the adoption rate of this feature, but it seems like a relatively simple implementation that fits well within the app.
The second example is more significant and impactful. Samir Desai explains it well in an interview posted on the NRF website:
“One of the pain points we observed earlier on with our Hollister brand was that, you know, the primary target customer is a high school teenager. They love browsing our app. They look at product, but then they don’t have a credit card to buy. And so, they kind of hit a wall and they’re not able to transact. So they take screenshots, they text their parents, and there’s a lot of this offline activity (offline meaning off of our app activity) that’s happening.
We thought, how do we make this process seamless? So, we launched this feature that we call share-to-pay. And so, this high schooler can browse, select the items that they like, they can add them to the bag, and then they can share that bag directly with their parent, right from the app. The parent receives a link, opens it, looks at the items, and they can edit the bag if they like. They can remove items, add new items, and they can pay for that purchase. It’s been a wonderful feature and it’s been a big success for us.”
I found this innovation very clever and relevant to Hollister target demographics needs. Overall, I think the app is as good as the website, and I can see why customers may enjoy using it to shop.
Social Media and Digital Marketing
I’m not a social media expert, but it’s interesting to compare A&F’s follower count across various platforms. When I look at Levi’s (which I wrote about in July), it’s clear that A&F is behind, especially on TikTok. Both brands started posting on TikTok at the same time, yet Levi’s has significantly more followers and engagement. I wonder why that is. My guess is that Levi’s appeals to a broader audience, and A&F has only recently seen a massive increase in revenue. I also find Levi’s content more engaging and less sales-oriented, though that’s just my opinion. If someone with more experience in this field could shed light on A&F’s social media strategy, I’d be interested to hear it.
That said, it’s clear that A&F’s social media content aligns with their rebranding efforts. The company has moved away from its old image of exclusivity and shifted towards inclusivity, diversity, and body positivity. Their posts now showcase a wide range of models and customer stories, featuring diverse body types, ethnicities, and backgrounds. A&F is communicating its new values: self-expression, individuality, and authenticity.
The brand maintains a clean, modern aesthetic that fits with their updated image and appeals to their target demographic of young adults. They actively encourage customers to share their own content and collaborate with influencers. While I think there’s still room for improvement in terms of authenticity, they’re doing a good job overall. I also believe A&F could strengthen its social commerce efforts. While I understand why they avoid listing products on Amazon or Walmart.com, stepping up their social commerce game wouldn’t hurt their brand and could reduce some friction in the shopping experience.
Like many brands, Abercrombie uses email marketing with daily emails. These emails are fairly standard and look similar to what other brands send. I do appreciate the reminders to use their app, but I think A&F could benefit from more personalization (if they aren’t doing so already) and highlighting their best deals directly in the emails.
Conclusion
I believe Abercrombie & Fitch’s impressive comeback in recent years is largely due to their repositioning, combined with a well-executed digital strategy. Their shift to a more engaging online presence has paid off, as evidenced by the significant growth in their stock and revenues. With over 50% of their business now digital, A&F clearly understands the importance of ecommerce.
While I see some areas for improvement, for example regarding authenticity, I think the brand has done exceptionally well and remains highly relevant in 2024. Ultimately, this success wouldn’t have been possible without their successful rebranding and relevant product offerings. I’m impressed with A&F’s innovations in ecommerce and will continue to follow their progress closely.
https://www.cnbc.com/2024/08/28/abercrombie-fitch-anf-earnings-q2-2024.html
https://www.reuters.com/business/retail-consumer/abercrombie-
https://nrf.com/blog/inside-digital-transformation-abercrombie-fitch
fitch-lifts-annual-sales-forecast-betting-steady-demand-2024-08-28/
