Urban Outfitters faces a crucial challenge: effectively marketing to Generation Z. The young adult retailer, known for its unique and vintage-inspired fashion, admits it has struggled to connect with this demographic.
As a result, the company is strategizing a turnaround to emulate the success of competitors, while recognising the distinct qualities and preferences of Gen Z customers. This effort highlights the changing landscape of retail and the need for brands to adapt swiftly.
Understanding the Generational Shift
Urban Outfitters has acknowledged a misstep during the global pandemic by not keeping pace with the “rapid and seismic shifts” from millennials to Gen Z. Shea Jensen, North America’s Urban Outfitters Brand President, stated during an earnings call that focus was lost on their core customer.
The consequence was an inability to attract Gen Z while losing millennial customers. Now, the company is optimistic about becoming the “definitive brand for young adults,” but realises this requires a keen understanding and response to the generational differences.
Competition is fierce among retailers targeting the fashion-forward youth. Companies like Shein and H&M offer lower price points, while Urban Outfitters, priced in the middle range, aims to redefine its appeal without compromising its unique style.
Learning from Competitors
Abercrombie & Fitch provides a model for successful brand transformation, with their focus on evolving alongside their customer base through strategic core value adjustments. Their journey included renouncing exclusionary practices and embracing versatile clothing for adults.
Urban Outfitters has maintained a youthful image, but missed the mark in appealing to today’s high schoolers and college students. Jacqueline Babb, a Northwestern University marketing professor, emphasized the importance of overhauling company values to engage effectively with new generations.
Focusing on Target Customers
Urban Outfitters plans to rebuild by identifying and catering to a broadened customer base: suburban teenagers, college students, and young adults.
Jensen noted that “the Gen Z consumer is significantly different” from previous generations. The company now embraces diverse customer profiles, offering more sizes and categories, moving beyond just alternative aesthetics.
The focus is on addressing the importance of pricing, selection, and physical retail experiences. The brand is restructuring some stores to be closer to their target demographics and resizing underperforming locations to better align with Gen Z expectations.
Adapting the In-Store Experience
In-store experiences remain crucial for Gen Z, despite the digital age. Urban Outfitters is closing underperforming stores and relocating others to align with their target audience.
Changes are already visible, with stacks displaying “New Lower Price” tags, an attempt to appeal to value-conscious students. Yet, some sceptics on social media suggest prices have not significantly changed. The perceived price reduction strategy is under scrutiny as a potential marketing tactic.
Building a Winning Strategy
A successful turnaround lies not just in product offering, but also in strategic positioning and brand communication.
Urban Outfitters acknowledges the need for a nuanced approach to both product and perception management in a competitive market.
Navigating Challenges Ahead
Urban Outfitters aims to leverage its strengths, such as the absence of past controversies faced by Abercrombie, while also addressing pricing and diversity.
The company remains confident yet cautious, understanding that adapting to Gen Z requires ongoing effort and vigilance.
Urban’s success may hinge on their ability to authentically connect with young consumers through relatable marketing and relevant offerings.
Urban Outfitters is embarking on a strategic journey to reconnect with Generation Z, acknowledging past mistakes while looking to the future with a careful recalibration of its brand identity.
The retailer’s commitment to understanding and meeting the unique preferences of Gen Z will be crucial in achieving a successful turnaround. The path forward is challenging but holds promising potential if executed with precision.
