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American Eagle’s Guide to Staying Relevant in a Disrupted World

It isn’t easy staying young, but the latest moves by American Eagle are helping the 40-year-old teen denim and lifestyle retailer stay relevant.

The brand’s new retail concept, an ever-evolving product line and a public stance on youth-centric issues like diversity, body positivity and even gun control, are revitalizing the brand from the inside out.

“In order to be successful, you have to have great product, a strong brand proposition and a fantastic experience in store and online. We’re obsessed about customers, what they want and what’s next for them,” Chad Kessler, AE global brand president, said Tuesday at WWD’s Menswear Summit in New York City.

For American Eagle, denim is the fountain of youth.

As a youth-centered company, AE has maintained a focus on jeans, which Kessler said are an “eternal part of young culture.”

“We believe in individuality, self-expression and youth empowerment,” he said. “We believe that there’s a terrific intersection between jeans and the position of youth culture and this platform of empowering young people.”

Kessler explained how AE used its own platforms, and the size of its customer base, to amplify the March of Our Lives’ message last weekend, and to get as many people out as possible to the worldwide march for gun control. For AE, the march—which was organized by survivors of the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida—was personal.

“The reality was we couldn’t be silent…we saw pictures of kids leaving the school, some of them wearing American Eagle,” Kessler said about the effect the tragedy had on the AE team.

And the recent Time magazine cover with survivors of the shooting “could have been a picture from an American Eagle campaign,” he continued, adding that some of the kids were actually wearing the brand.

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“But the idea is that these young people are our customers and represent our customer demographic. The fact that these kids are forcing a national dialogue on a topic that’s important to them is something that we thought we had to support,” he said.

That’s not to say American Eagle’s stance on gun control didn’t get some backlash and unfollows. On Instagram, commenters suggested that the company “stay out of politics” while others called it “un-American.”

“It’s something we thought about a lot before we sent out a message about the march because not only do we have our customers we’re speaking directly to, but oftentimes the parents are the ones doing the shopping, and we have 850 stores across the country, so we clearly are in areas where the march is well received and in places where the march wasn’t as popular,” Kessler said.

However, the positive comments outweighed the negativity. Kessler said AE saw “really nice, positive engagement” across its social channels and a positive response from its associates, both in stores and in its offices.

“They’re really happy that we’re standing up for our customers and for young people across the country,” he said. “We’ll continue to look for ways that we can be inspired by young people and make their messages more resident.”

Jeans make for good business, too.

Above all else when it comes to product, AE leads with indigo.

“We sell full lifestyle product. We outfit our customer from top to bottom, but first and foremost we’re a jeans brand,” Kessler said. “We’re actually are the no. 1 specialty retailer in total in jeans in America. The only store that sells more jeans than American Eagle is Wal-Mart and we’re pretty confident we’re going to catch them soon.”

As such, the company prides itself on carrying everything its customer might want.

“Jeans drive traffic, jeans drive customer loyalty. And we believe we have the best jeans because we’re constantly focused on innovation, fit, quality and value,” Kessler said. Each season, he said the brand works to expand its assortment so it has the right fits, washes, sizes.

 

The American Eagle brand did more than $3 billion in sales last year. “We’ve emerged as the clear leader in our space,” Kessler said. “We’ve had several years in row with positive comps and we’re driving positive traffic and positive comps in our stores and in our digital channel.”

Adding to that, Kessler said, “Our website did over a billion dollars in sales last year—that’s over 25 percent of the total company’s volume,” And the brand is finding new opportunities on mobile, as well. “Today, we get 75 percent of our traffic and almost 50 percent of our digital sales on a mobile device. It’s really astounding to see how that has shifted in the past couple of years.”

Make them never want to leave.

That’s no small feat as a primarily mall-based retailer. The store has thrived during a time when mall traffic has tanked. Despite that, however, Kessler said the brand is experimenting with new retail concepts. Stores, after all, drive brand awareness, customer acquisition, customer retention and for AE, creates a “huge digital halo” he explained, adding that AE’s digital sales tend to spike in the vicinity of new stores.

“I firmly believe that a well-curated, physical experience for the brand is the most powerful way you can drive customer engagement. I think there’s no better way to get customers to understand what you believe in, what your brand is than having them stand in your store and be immersed in your environment,” he said. “It’s also a great marketing tool.”

For its 40th anniversary last fall, the company unveiled AE Studio located in New York City’s Union Square, as a prototype store designed to engage and enrich customers’ experience with the brand. “I don’t think there’s any cookie cutter approach to how you can drive customer engagement. You have to understand your brand and your customer in order to do that,” Kessler said.

The store is a showcase for AE’s denim collection and an experimental hub for the company. “We use this as a platform to test, to learn, to see what we can take out to other stores,” Kessler said, adding that it will open a mall-based version this spring.

During the design process, AE realized that it didn’t have a single store that could house every fit, wash and choice of its men’s and women’s jeans in one location, so it designed that into the store. A jeans gallery at the entrance offers men’s jeans on one side and women’s jeans on the other, with every fit framed so the consumer can see what they look like.

The breadth of the store’s technology and services runs deep. Fitting rooms are equipped with systems that allow the customer to request additional styles and sizes. A customization station offers customers the chance to put their own stamp on jeans. Meanwhile, an in-store laundromat caters to the store’s New York University clientele.

“We figured, why not give the kids a place where they can do laundry. So, if you have a valid college I.D. you can bring in your dirty clothes, you can wash and dry them while shopping for a new pair of jeans or hanging out with your friends,” Kessler said.

Upstairs, the store has social areas, including a hangout space, charging stations, a water bar and room for activations.

The shop also acts as AE’s social media hub. The company moved its social media team to the store floor so they could “engage in real life with real customers.” Like a true Gen Zer, Kessler said, “They’re really experiencing the brand physically while they’re expressing it digitally over our platforms.”