A&F’s pricing strategy: Brand integrity or bad timing?

There’s been a lot of discussion recently about Abercrombie & Fitch, and their well-publicized decision not to discount their product last fall in the midst of the consumer/retail meltdown. My perspective is that “brand integrity” only goes so far, at the expense of losing long-term market share to key competitors. Here are some other comments from Retail Wire:

When higher-end competitors like J. Crew and others are taking steps to be more value-oriented (adjusting their regular prices, running more in-store promotions), A&F sticks out like a sore thumb. It may be noble to stand for “brand integrity” by failing to offer cash-strapped customers better value, but A&F has made a couple of strategic missteps as a result. First, they have allowed most of their competitors to gain market share at their expense. Second, they have undermined their own message by painting their merchandise content as “too expensive” in the consumer’s mind. Third, they have done a disservice to their own shareholders by sitting on their hands, allowing a comp-sales and clearance meltdown to occur.


2 Responses to “A&F’s pricing strategy: Brand integrity or bad timing?”

  1. 1 Brian May 8, 2009 at 7:44 pm

    Hi Dick,

    These are some great thoughts on ANF, all of which I agree on. They have truly stuck to an ideology (aspirational no matter of the economic backdrop) at the expense of shareholders. I would love to include you in my distribution list for equity research reports, so please shoot over an email. I look forward to hearing from you.


  2. 2 Steve Biggerstaff November 3, 2009 at 8:42 pm

    Seems like A&F and others (see: classic lodging industry mentality) miss the boat when they define “brand integrity” as “we’re worth X whether people want to pay us or not.” Such an approach attaches their brand to fixed price points rather than to a value proposition that addresses customer needs and competitive offerings.

    I doubt if there’s a Webster’s entry for “brand integrity”, but savvy marketers might agree with – or improve upon – this one:

    “Developing a market-competitive business strategy and brand positioning; translating that into a compelling brand promise and messaging platform; and then delivering on the value proposition in such a way as to create customer loyalty and stakeholder value.”

    A&F’s use of the term “brand integrity” appears to focus on an abstract, fixed understanding of their positioning in a dynamic world that has reshuffled the deck. For those of us with a few more gray hairs, the ’90s taught us that American shoppers shift quickly away from mass “status” brands in favor of self-defined value – and the parking lots of Target and Wal-Mart are still full of luxury autos and SUVs. Clinging to price as the touchstone of value may actually be the antithesis of “brand integrity” in the years to come.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: