American Eagle CMO shares why the future of retail will take more than a 'let's just put some technology and screens up' approach

Business Insider Finance 2 months ago

American Eagle Outfitters has become a bright spot amid the carnage of the retail apocalypse — thanks largely to its investment in experiential retail, according to Chief Marketing Officer Kyle Andrew.

Speaking at the UBS Future of Retail conference in New York City on Monday, Andrew acknowledged that while not every strategy has been a win, innovating around failure has been key to the brand's success. While stunts like offering laundry at a store near New York University or radically changing its physical store design haven't always translated directly to sales, it helps the company understand what works.

"You have to try some stuff and fail because it gives you so much information to then try something else," she said. "American Eagle is very good at that. We're investing and researching, we're trying different things both online and offline, and we're trying to get more nimble and move faster."

An American Eagle concept store in NYC.

American Eagle has established itself as one of the few mall brands that have managed to stay afloat and avoid mass closures in recent years. In September, the company reported its 18th consecutive quarter of positive comparable sales, with an increase of 2% in the second quarter of 2019. Aerie in particular continues to shine, posting 16% quarterly growth and ongoing national store openings.

Recent initiatives like the American Eagle Youth Council — a group of teenagers who regularly consult with the corporate team on clothing styles and company efforts — have also helped build brand cachet, Andrew said. So too have outspoken efforts against topical issues like gun violence and testing models like buy-now, pay-later.

"Back in the heyday, it was all about Abercrombie and American Eagle telling people what they should look like, what's cool, and what you need to dress like," she said. "Now we're really taking very different tactics ... our advantage is we've gotten so good at understanding our customer. We built a really strong database. We mine for information day in and day out."

When it comes to innovation, however, she cautioned against rushing to integrate technology into physical stores merely for the sake of trying to appear modern.

"The digital piece has to enable the experiences you're trying to create versus digital being the 'thing,'" she said. "A lot of [retailers] fall into that trap of, 'Let's just put some technology and screens up.' It doesn't work that way."

Kambiz Hemati — vice president of global store design at Foot Locker, who also spoke at the UBS event —echoed Andrew's sentiments.

"Every time we tried to incorporate digital in stores that turned into just a giant iPad on the wall it was a failure," he said.

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