Urban Outfitters’ Disconnect with Gen Z
Urban Outfitters, once a favorite among young adults for its vintage-inspired styles, has acknowledged its struggles in capturing the attention of Gen Z. In a recent earnings call, the company admitted to missing significant shifts in fashion trends and preferences among this demographic, leading to a decline in sales and a weakening connection with its core audience.
Understanding the Problem
Shea Jensen, president of Urban Outfitters in North America, pointed out that the brand failed to adapt to the “seismic shifts” in trends between Millennials and Gen Z during the pandemic. This resulted in Urban Outfitters losing new Gen Z customers while also becoming less relevant to the Millennials that had once embraced the brand. Despite these setbacks, the company is optimistic about regaining its footing and becoming a leading brand for young adults once again.
Sales Drop and Competition with Rivals
Urban Outfitters reported a 9.3% decline in sales for the second quarter of 2024, while other brands like Abercrombie & Fitch and American Eagle have seen significant growth. One of the challenges Urban Outfitters faces is its higher price points compared to fast fashion competitors like Shein and H&M. Additionally, the brand’s unclear positioning has made it difficult to stand out in the crowded retail market.
Learning from Abercrombie & Fitch’s Turnaround
Abercrombie & Fitch successfully evolved its brand strategy by shifting from a high school-focused image to one that appeals to adults. This change helped increase sales by 21%, with Abercrombie distancing itself from controversial past marketing. In contrast, Urban Outfitters has struggled to market itself effectively to today’s high school and college students, maintaining its youthful image without adapting to the changing times.
Urban Outfitters’ Recovery Plan
In response, Urban Outfitters has outlined a five-pillar recovery plan to re-establish its presence among young adults. The company’s strategy focuses on better understanding its target audience, expanding its product offerings, and reaching a broader customer base that includes suburban teens, college students, and post-college young adults.
The company is also adjusting store locations, refining the in-store experience, and resizing its brick-and-mortar presence to better meet the needs of Gen Z.
Changes in Product Pricing and Online Strategy
In an attempt to appeal to budget-conscious Gen Z shoppers, Urban Outfitters has prominently featured “New Lower Prices” on its website. However, some consumers have pointed out that the price reductions seem minimal, raising concerns that the brand is only creating an illusion of affordability.
The Challenge Ahead
Urban Outfitters now faces a critical challenge: reconnecting with the younger generation while competing in a highly competitive retail landscape. Its success will depend on how well it can adapt to the fast-changing preferences of Gen Z, while also distinguishing itself from its competitors.
