Zara'S Performance Is Slowing Down. Why Can Urban Outfitters Go Against The Trend?

Fast fashion winter is coming. In the days when Zara are in jail, Urban Outfitters, which is always on the same commercial street with Zara, is upstream.

According to the fashion business bulletin, driven by online sales, Urban Outfitters parent company URBN group grew 5% in holiday sales last year, of which Free People increased by 6% compared with retail sales, Urban Outfitters sales increased 5%, Anthropologie Group increased 4%.

In the 11 months ended December 31, 2018, URBN group's sales grew by 10% year-on-year, and its sales increased by 9%. During the period, its sales in digital channels and physical stores achieved a strong two digit growth, while wholesale channel net sales increased by 10%.

In the changing market environment of consumer habits and ideas, fast fashion brands have already left the golden age, and the performance of Zara has slowed down. The Topshop, New Look and Next from the United Kingdom announced large-scale closes. Sweden's fast fashion giant H&M closes its Cheap Monday and restores its new brand Nyden. The US Forever 21 will completely withdraw from the French market.

At the same time, when competitors began to sway their own palace, early targeting young people's community culture, and actively using the advantages of digital marketing channel Urban Outfitters began to become more obvious.

Urban Outfitters and Zara were created almost simultaneously.

In 1970, Richard Hayne, Judy Wicks and Scott Belair set up a retail shop called Free People for the entrepreneurship course project of University of Pennsylvania, then renamed Urban Outfitters and registered in 1976, only one year later than the one founded by Amancio.

The group later developed into a multi brand group including the same brand, and Free People, Anthropologie, Terrain, BHLDN and The Ventri Group.

In 1970s, hippie culture prevailed in the United States. Young people who rebel against customs went to San Francisco to find free life. They used communal and vagrant lifestyles to combat social values.

Urban Outfitters predecessor "Free People" is also a direct reflection of the cultural environment at that time.

Rooted in the core of hippie culture, the group has established the tone of Bohemia, retro rebellion and independent rock as a whole. The specific style is differentiated according to the brand.

It is noteworthy that, unlike the fast fashion brands with a unified label, the main brand Urban Outfitters is more like a buyer shop, and its internal brands are very complicated, including BDG (Bulldog), Silence + Noise, IETS Frans, etc.

And the price span of products is also very large. Some shops have young designers' sections, including some styles of brand new designers such as Angel Chen, Maison Margiela sub line brand MM6 and so on.

Because each product has a smaller stock and stores do not do mass advertising, the brand has become the favorite of deviant young people.

With its unique style, Urban Outfitters has expanded rapidly worldwide. The average sales scale of Urban Outfitters increased by 44% between 2003 and 2006.

Urban Outfitters has gradually developed into a comprehensive lifestyle retail group with multiple brands. It covers women's wear, men's wear, sportswear, underwear, footwear, accessories, household products, electronics and beauty products.

The main brand of the group not only sells clothing products, but also "folds" a large number of product categories.

For example, apart from Urban Outfitters, the Anthropologie brand mainly sells household products, ornaments, beauty products, ladies' casual wear and accessories for women aged 28 to 45, and has 626 stores worldwide.

However, as the rapid expansion and brand niche positioning began to clash, the brand became overly mainstream, and the situation of Urban Outfitters was on the decline. In 2012, its same store growth rate was only 0.9%, all of which came from online sales, but the fast expansion of the world's stores did not contribute.

In order to reverse the situation, Urban Outfitters began to explore how to balance business operations and keep consumers fresh.

In addition to catering to the fast fashion trend and accelerating the new cycle, Urban Outfitters has also made many more important innovations in terms of the core competitiveness of the group.

In fact, this is also the key to making Urban Outfitters "cool up" and still catching up with young consumers 50 years after its establishment.

From the point of view of the brand itself, the internal product system of Urban Outfitters's main brand and the selection system of the buyer system provide a variety of advantages for the product, so that the freshness of the brand can be maintained in a sustained and vigorous state.

Many consumers will feel the strong feeling of being surrounded by merchandise in Urban Outfitters shop.

Such a "big and complete" experience may lead to consumers who are keen on precise consumption and advocate minimalist lifestyles. But for another group of sensitive consumers, such consumption experience is unforgettable.

In this sense, while Urban Outfitters has eliminated some consumers, it has grasped another group of young consumers.

At the same time, brands and FILA, Vans, Nike and other brands have launched exclusive cooperation series for a long time, or have launched a series of cooperation with stars such as Lady Gaga.

Urban Outfitters has also opened up new product categories such as household products and beauty products, and even bought pizza chain store Pizzeria Verti in 2015 to set foot in the catering industry and launch a concept store integrating coffee shops and pizza shops.

But it is worth noting that Urban Outfitters seems to have gone further than other brands in the "sideline". For example, in 2014, it has become the world's largest seller of black Greco music. In the market of physical music retail, it has already entered the cold winter market. Why is the black vinyl album selling well in Urban Outfitters? Why do the young people who are used to digital music buy the vinyl discs in the fashion shop? These problems are very important for the retail industry today.

Analysis shows that the fact that Urban Outfitters has sold a lot of vinyl records shows that in the eyes of many buyers, this is not about function, but about lifestyle.

Urban Outfitters CEO Richard Hayne said in an interview in 2015, "the real shopping experience of consumers is beginning to become diversified, and now the retail brand must become a lifestyle brand."

It seems to be a consensus among many brands to become a way of life, but there are few brands that really realize this abstract concept.

Urban Outfitters has become a real lifestyle brand, and the core reason is to clearly understand the consumer psychology of young consumers online and offline.

When the three elements of product, consumer psychology and consumption scene are unified, the retail links are opened up, and online and offline logic can also achieve self consistency.

The store and the electricity supplier are the two legs of the fashion clothing brand. The instability of the center of gravity will seriously affect the speed and rhythm of the brand's progress.

Urban Outfitters is a rare online and offline brand. Its number of offline stores is far behind that of fast fashion stores, but its store experience is permeated in every store.

When consumers enter different Urban Outfitters stores, they often feel the difference between each store, which is obviously different from the traditional standardized store design.

Because the brand added home decoration, clothing customization, beauty salon and technology interactive blocks, such as placing big stickers in the physical store, the interesting shopping experience continues to attract consumers to shop.

The advantage of creating experiential shops is further reflected in its brand Anthropologie, thanks to its unique mini home showroom concept, which has achieved a two digit growth in the first half of last year.

The experience of "big and complete" may lead to consumers who are keen on precise consumption and advocate minimalist lifestyles, but are very popular with other consumers who are sensitive to new things.

In the words of retail expert Jan Rogers Kniffen, Urban Outfitters built "the coolest consumer place".

As more and more brands begin to be in the pilot concept stores and time Limited stores, Urban Outfitters has infiltrated the unique consumer experience into every store, and the unique experience of each store has become a scale advantage.

It also explains why a highly standardized Zara entity will become a cumbersome group, but the entity store in Urban Outfitters can add points to the brand.

On the other hand, Urban Outfitters also locks the consumption psychology of young consumers online.

Young people's pursuit of experience and convenience is the same on line and offline, but only in different forms.

In the early days when the brand changed from online to online, the brand was able to catch the signs accurately. It used social media to monitor young people's preferences and cultivated consumers' habit of shopping on their APP very early.

The fact that Urban Outfitters has sold a lot of vinyl records shows that in the eyes of many buyers, this is not about function, but about lifestyle.

In online competition, Urban Outfitters cut the demand of young consumers for convenience of content and shopping.

That is to say, in the past, consumers obtained fashion information through fashion magazines and content platforms, and then chose to provide the brand of their favorite products. But nowadays, the direct flow of content by brands has become a more direct way, and consumers want to buy them immediately after they see the trend in social media.

The degree of integrity from social content to online business is the convenience of online brand experience.

After seeing this demand, brand building online community and deep tillage social media become the most direct solution.

Urban Outfitters, which rarely invested in advertising budget in the era of physical retailing, has caught the free promotion resources of social media. The marketing industry media Marketing Dive earlier said that Urban Outfitters mainly collects consumer shopping preferences and habits through app to conduct precision marketing.

The brand focuses on the preference of the target customers, and builds strong brand communities with social media.

The use of Snapchat to track consumers is a classic example.

According to official data of Urban Outfitters, the brand Snapchat ratings increased by 25% in 2016.

In a May 2016 report, L2, a digital research firm, mentioned that Urban Outfitters is the most prolific brand on Snapchat. It has released 458 snapshots, 83% of which are featured by video content, and invites users to explore new products, and can measure which products are popular through screenshots.

In addition, the company also uses Instagram to invite consumers to share their shopping experience and lifestyle on the platform, and interact with consumers frequently.

According to data from TINT, a consumer survey, 80% of millennials believe that user generated content is an important indicator of brand quality.

As the first generation of electronic technology, millennials are easiest to pursue new trends, so they are more likely to be attracted by strong brand names, which means that brands that spend time interacting with them at the personal level are more likely to win their loyalty.

Therefore, by creating product related topic tags and encouraging cross platform users to generate content, Urban Outfitters has gradually established an online fan community, creating a word of mouth marketing, which not only effectively reduces the company's marketing costs, but also improves the brand's trust and goodwill through the way of word of mouth.

The brand Instagram fans exceeded the 5 million mark in the second quarter of 2017, an increase of 65% over the same period last year, and the number of new fans increased at a rate of 200 thousand per month.

At present, the brand has 8 million 300 thousand fans on Instagram.

Even in the membership plan, Urban Outfitters continues to focus on lifestyle and community experience.

Unlike just exchanging samples or offering discounts by integrating points, Urban Outfitters also aims at the millennial generation's hobby, allowing members to exchange points to get tickets for artists, celebrities, signature products and other personalized prizes.

Another brand, Free People, has also implemented the core purpose of content and community.

Brand precise positioning of female students around the age of 20, the use of its own social media platform FP Me, to establish and maintain its fans community.

Through FP Me, users can share how they design their own clothes and get inspiration from photos of other girls. When the platform understands user styles, they can also make relevant suggestions.

In addition, the platform can also share relevant blog content, Daily editorial recommendation, new music and so on.

Some analysts believe that when Free People launches clothing products, it develops FP Me into a content community, which effectively increases the viscosity and sense of belonging of consumers.

In fact, according to a survey conducted by College Fashionista and Goldman Sachs, the popularity of the brand seems to exceed that of the giants Zara and Forever 21, and 13% of American female college students believe that Free People is their favorite brand, while the other two share 6% and 7% respectively.

In fact, Free People has always been a cash cow of Urban Outfitters.

According to the data, from 2014 to 2015, the brand had achieved two digit growth for 14 consecutive quarters.

This is mainly due to its wholesale business and international expansion.

In 2014, European sales increased by more than 200% due to the consumption of Britain and Germany, while in Asia, Japan and South Korea's strong consumption contributed more than 100% growth.

In order to seize this big cake in Asian market, as early as October 2014, Free People co operated with IT group of Hongkong trend buying shop to open the first store in mainland China.

Similar to Urban Outfitters, IT is also a fashion group that focuses on young people's personal taste and trend culture, and takes multi brand collection shops as the main ecology, and even Urban Outfitters's competitors.

But when we first entered the Chinese market, Free People chose to cooperate with the IT in the local market to find out the preferences of young people in China, reflecting the long-term thinking of the group.

Although the store was closed later, the decision logic of the brand when choosing partners is worth learning from.

Compared with many fast fashion brands, Urban Outfitters appears slow in entering the Chinese market.

In order to test the water market in China, the brand has entered Tmall platform at the end of 2016.

But the brand currently exists outside the United States in 50 physical stores, all in Europe.

In an interview with Fashion Network in early 2018, Stefan Laban, director of international development, revealed that the ultimate goal of the group was Asia and to consider setting up a joint venture in China or adopting a direct sales model.

The group hopes to open a physical store in China or Japan in three years.

But before entering Asia, it will first enter the Near East and the Middle East as the first development goal beyond the European market.

When Zara and other brands are eager to get rid of the physical shop burden and enhance the business channel, the Urban Outfitters walking on two legs is not fast enough, but appears to be more solid, and produces more power of original development through content and creativity.

David McCreight, President of Urban Outfitters, emphasizes that brand vision is strategically extended to specific categories based on consumer buying behavior and grows in the current age and interests of customers.

Tightly around the young people's psychological adjustment of brand development logic, so that the brand avoids many trial and error risks, and also take a lot of detours, and this is perhaps Urban Outfitters in the changeable retail environment to do the most correct thing.

Of course, the success of any fashion brand is mixed with luck. The recent strong growth of Urban Outfitters also needs the help of time and place.

The fashion trend is constantly changing, and the Urban Outfitters, which insists on restoring the ancient hippie style from its birth, has just welcomed the popular resurgence.

What it should worry about is that once the trend is faded away, the brand must be separated from the golden age like Zara.

The fashion brand born out of the social and cultural wave seems to have a natural sensitivity to the minds of young people.

In the past 50 years, Urban Outfitters still has great attraction for young people nowadays.

After all, there are young people in every era. Perhaps there is no difference between the 70s hippie community and the young people who are now gathering in social media.