Abercrombie & Fitch’s younger sibling Hollister Co. has evolved from a surf-inspired brand to one that’s broader in focus, encompassing the California teen lifestyle where denim is also a huge component of the merchandise offerings.
That evolution is squarely thanks to former brand president Fran Horowitz, who has since been elevated to chief executive officer of Hollister parent, Abercrombie & Fitch Co. Under Horowitz’s direction, the brand also developed a playbook, one that puts the consumer first and was so successful in evolving the brand that it now serves as the format for evolving the core Abercrombie brand.
Horowitz joined the company in October 2014 and the first order of business was revamping the brand’s look. At the time, her mantra for Hollister was that “customers come first.” Now that’s shifted more to: “Customers are at the center of everything we do,” the new signature tag line for the company. Horowitz not only visited stores, but spoke with store associates and even shoppers during her visits, considering what parents wanted, as well as how to give teens a brand that resonated with their needs.
“When I first arrived at Hollister, there was significant opportunity to improve the product and to differentiate the brand from A&F,” Horowitz said. “The brands were too similar in the mall, so we set down separate paths and a large part of that included shifting the focus to put the customer at the center of all that we do.”
Focusing on the customer, along with teen feedback, led to an overhauling of the product line that included both fit and the merchandise that they actually wanted. “At the same time, we aligned our voice and experience, and we’ve continued to evolve our playbook over time. We have seen continued success when we get the product, voice and experience right, and coming off nine straight quarters of positive comps, we know the approach is working,” the CEO said.
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Shifting the store experience
The feedback, according to Horowitz, also meant Hollister needed to create more welcoming and inclusive stores.
According to the Horowitz, “With feedback from the teen customer, we realized the need to create more welcoming and inclusive stores.” The company also began a test of the store concept in May 2015, updating the look with typical retrofitting elements in store design, from adjacencies to fitting rooms and even simple adjustments like brightening up the store with more lights.
“One story I love to tell is [about] a store visit in Germany-it was in my early days and I was asking associates about customer feedback. One manager mentioned how dark it was and suggested turning on the stock lights. I asked the team to do that and when they did, customers began applauding in the store. After that, I told our team back home to have all stores turn on the lights across Europe and they have been on ever since,” Horowitz said.
And there were other changes afoot. Instead of a dark beachy, hut-like entrance, clear glass became the new storefront, which made it easier for outsiders in the mall to look all the way to the back of the store and see the merchandise on display. And the updated displays even took into consideration how consumers–think mom and dad–shopped. Waistbands for bottoms were rotated to the front of the shelves so no one would have to dig their way to the back to check labels and hangtags. Now close to 45 percent of the store fleet has been updated with the new format, and more will follow.
Along the way, Horowitz became president and chief merchandising officer at the parent corporation, and then ascended to the role of CEO. And Kristin Scott, who was brand president of Hollister Co., became president, global brands of both Hollister and A&F in November.
Reinvigorating relevance
Scott, who joined the company in 2016, has taken Horowitz’s playbook and evolved it further. While the merchandising has to be on point, the brand also needed to be relevant to its teen audience, and part of its plan to tackle that had to do with taking stands on anti-bullying and inclusivity.
Last fall, at the start of the new school year, Hollister partnered with Sit With Us, an anti-bullying app created by Natalie Hampton to help students find allies they can sit with during lunch time. And Hollister brought in singer-songwriters Khalid and Noah Cyrus to collaborate on raising awareness of bullying at school and furthering its goal of inclusivity. It also has partnered with Snapchat to better communicate with teens, as well as give them another outlet to communicate with each other.
“When I came in, I wanted to make sure that people understood what it means to get close to the customer,” Scott said. “We take it literally to [become] immersed with the teen’s life-what turns them on, what turns them off and what inspires them. We continue to evolve that every year. The tactics just keep evolving as we accomplish more. What our teen is telling us becomes just part of our vocabulary for what drives us every year.”
The brand team at Hollister knows its teen Gen Z customer inside out, according to Scott, and has just started studying Gen Alpha, often referred to as the children of millennials. “We are finding that Gen A is an amplified version of Gen Z….They are accustomed to things like voice, Ask Siri, and so we’ve got to be ready for them. As much as Gen Z cares about causes and…how they spend money with brands, Gen A is more extreme than that. We need to make sure we are set to please them as well,” Scott said.
Going social
Social media has become a major component of Hollister’s marketing to its teen customer. The brand team is constantly on the look out for new platforms that teens “digitally” congregate on so Hollister can stay relevant to its targeted audience. But it also does that through its authenticity in its outreach to teens, whether it be the anti-bullying and inclusivity platforms or new opportunities surrounding issues like mental health. Because of their digital native ways and social media usage, many are more stressed out than their counterparts in generations before them. According to Scott, that’s one more opportunity—and even accountability—for the brand to help them out.
At the teen level, and even Gen A as they get older, the use of social media is less about actual buying of product and more about the discovery of fashion and trends.
“Technology is all about being in their discovery zones. Teens and Gen A do a lot of research, discovering brands in different places. It’s more about being in their discovery set,” Scott said. “That’s how they fall in love with brands, so it’s not about them buying but about them taking us into consideration.”
By the numbers
So far, Hollister has been resonating with teens, and helping to give the corporate parent a boost with earnings results.
Earlier this month, Abercrombie & Fitch Co. reported fourth quarter results that saw net income jump 30.6 percent to $96.9 million, on net sales that slipped 3.1 percent to $1.16 billion due in part to the calendar shift at retail that saw one less week of sales versus the same 2017 quarter. Hollister sales rose 1 percent to $713 million, representing 61.7 percent of the company’s total net sales, with comparable store sales up 6 percent. Over the longer haul, the teen brand has done consistently better than its older sibling, but that’s in part due to a turnaround plan that began first at Hollister before the parent company began tackling the needed changes at A&F.
Product play
“It was another record year for Hollister in denim. Lots of exciting things were happening in denim and bottoms, and [also] the rise that consumers wanted. We also saw the re-emergence of the skirt business, and in denim skirts,”Horowitz said on Hollister’s fourth-quarter results. Teens also liked the new fashion trend of having side stripes on jeans, she said.
Scott echoed that, and elaborated on how denim plays a big role in the California lifestyle: “They’re looking for comfort and feeling confident in setting out to do what [they want] to do. Jeans are big part of that, and they really love jeans.”
Hollister also has a genderless collection called HCo that it is testing. The “For Everyone” concept is based on gender-neutral basics, such as tees, hoodies and baseball caps. Sizes range from XXS to XXL, with prices starting at $19.95 for the cap and can go as high as $39.94 for a hoodie on average. There is a relaxed denim Trucker jacket retailing for $69.95, and two options for a color-block windbreaker jacker that was $69.95 and is now at $41.97. Scott said so far the response has been “great.”
As for expansion plans, the company-under Scott’s leadership-re-introduced Gilly Hicks in 2017. The intimates brand is now in all stores, and it too is evolving as the team learns more about what resonates with the teen customer. While there is a core look and feel to Hollister, the team is still making adjustments where needed to suit a store’s location, knowing that there are variances to what the teen in China wants that might be different from his or her counterpart in Germany. Taking into account nuances in each consumer market means creating different experiences for the consumer, and so far the hard work seems to be paying off.