It's no secret that Abercrombie & Fitch has been struggling to stay relevant and hold on to its teen customer base amongst competition from fast fashion retailers. And while the company kicked off 2014 with some pretty significant upper-level restructuring, its latest hire may contribute more directly to its future success.
It's brought on tech firm First Insight Inc. to help solve some of the product and pricing problems that have caused the retailer to lose touch with its customers, not to mention profits.
The firm, based in Pittsburgh, PA, analyzes online consumer data to predict the best products for a retailer to introduce at the best time. It sounds like it offers services similar to a consultant or a trend forecasting company, but uses fancy technology to make those predictions. According to its website, current customers include Saks Off Fifth, The Limited, Avon and Pacsun.
With First Insight's help, Abercrombie says it will be able to test new products in every category each week -- months before those products are launched -- as well as decrease promotions. “By using First Insight to identify more winning products and price them appropriately, we are increasing speed to market with the right styles which will yield increases in sales and margin," explained Gillian Galner, GVP of Abercrombie & Fitch in a statement. "After evaluating the solution for an extended period, we have confirmed the solution will deliver a strong return on investment.”
It's interesting, and a little funny, that teen shoppers are so fickle that retailers need advanced technology to figure out what they want. It also means, presumably, that A&F is willing to make pretty fundamental changes to its product and prices, which, regardless of how well this technology works, is what they'll have to end up doing.