Neil Tenzer, vice president of corporate strategy and customer insights at Abercrombie & Fitch—which operates its namesake brand, abercrombie kids and Hollister—spoke with eMarketer’s Tricia Carr about the changing role of the company’s brick-and-mortar presence and how it keeps up with what its customers want.
eMarketer: What’s the state of the apparel sector today?
Neil Tenzer: It’s bifurcated. There are two places to be in the market—you can be on the price-focused side or the innovative side. Amazon and Walmart have been huge disruptors in the more commoditized, price-sensitive apparel space. They’re taking share from retailers who offer the same product but have been less able to adapt.
On the branded retail side where the space is differentiated and emotional attachment to a brand is a big part of the purchase decision, the shift to digital has been slower-paced—it’s still tremendous, but a bit slower. These retailers have taken a different path to innovation and figuring out how to connect with their customers.
eMarketer: For branded retailers on the more innovative side of the spectrum, does the physical store still play a role in serving the customer? Or is it all about digital?
Tenzer: There's this narrative that the store is dead, but that’s completely false. The way customers shop is evolving and therefore the role of the store is evolving as well. We've been proactive in reducing our store fleet to respond to our customers as we create an omnichannel experience. It's an ongoing shift as we invest in digital and optimize our store footprint based on where our customers are shopping.
eMarketer: What will be the new role of the store?
Tenzer: The role of the store will become clearer as customers show us how they want to use it. In the future, a store probably won’t be viewed as just a volume driver and it won’t be measured by dollars per square foot. It'll be a place for discovery, trial, assistance, fulfillment and living the brand experience.
Our products, our voice and our experience need to sync across the entire brand, and the store is where it all comes together in a tangible three-dimensional experience.