Aeropostale Reaches Down to Tweens
By Tom Ryan
Aeropostale has launched a new concept, P.S.
from Aeropostale, aimed at the tween market, a demographic that has been
a challenge for many retailers.
The concept targets kids seven to 12 versus
the chain’s 14- to 17-year-old core customer. The store carries graphic T-shirts,
jeans and dresses similar to the 900-store flagship chain with some exceptions,
such as school uniforms for the elementary-school crowd. Ten stores will
open this year with a long-term goal of having more than 500.
“We have watched with amazement for years [the
way] moms would come to Aeropostale with an older and a younger sibling,
with the younger sibling desperately trying to fit into the merchandise that
was obviously too big for them,” said chairman and CEO Julian Geiger, on
the company’s fourth-quarter conference call. “We are expanding and extending
all of the things we’ve done well for the high school student to the elementary
school student. We are enormously focused on this.”
Eighteen months were spent hosting events and
focus groups to explore the concept, including finding out whether it would
turn off existing customers. At the store, a floor-length mirror with a built-in
camera allows shoppers to take their own pictures and see them displayed
instantly on screens. Text messages such as “You look GR8 :)” and “Luv U” adorn
the walls. To make sure the jeans are more acceptable for moms, their rise
was lifted by about one inch compared with the older Aeropostale chain.
The launch comes as Aeropostale has lately been
handily outperforming rivals with 11 straight months of comp gains. Although
some observers believe its budget positioning (i.e., two t-shirts for $20
promotions) has worked well in the recession, Aeropostale believes it’s also
benefitting from a cutback in SKUs to focus on best sellers and on-trend
product.
But many chains have struggled targeting tweens,
a demographic seemingly caught in an awkward age between having their moms
dress them and wanting to dress like their older siblings. Tween Brands is
converting its Limited Too concept to its lower-priced Justice concept, and
just reached an agreement to be bought by Dress Barn. Saks discontinued its
Club Libby Lu chain late last year. Abercrombie & Fitch’s kids concept,
abercrombie, reported a 19 percent comp decline in 2008.
Others competing for the tween dollar include
GapKids and J. Crew’s Crewcuts concept. American Eagle opened 77kids, targeting
two- to 12-year-olds, as an e-commerce site last year and stores are expected
to open in the second half.
Some analysts believe if Aeropostale follows
a similar formula of focusing on value-oriented and trendy-but-not-risqué offerings,
P.S. might just work with the slightly younger crowd.
“From the store environment they’ve hit it,” Customer
Growth Partners’ Craig Johnson, who toured the stores with the company, told Dow
Jones. “It creates something fun for kids to stay
in stores longer. It’s mom-friendly. But I’m not convinced that this can
go to 500 stores.”
Discussion Questions:
What will define the success of the P.S. by Aeropostale concept? Why
has the tween opportunity been such a challenge for retailers?
The tween opportunity has been such a challenge for retailers because tweens are subject to changing their minds about every 5 minutes! In better times, many parents would just indulge and let them satisfy the apparel need du jour. Harder than ever now to get it “fashion right” with less money and a shopper mentality that it must be on sale.
Aeropostale should do well in this market. They’ve positioned their core brand well to compete in the market between Old Navy and Abercrombie and this is a natural extension. The key will be the in-store environment and it appears they’ve done their homework to make sure that it has the right image that will appeal to the kids and the parents who pay. A lot of parents will like that the brand and the clothes will not be as risque as the Abercrombie brand, and the prices should appeal to them as well.
The fundamental challenge with concepts catering to tweens is that ‘tweens’ aspire to be ‘teens’ and would much rather shop in the teen market stores. You might catch the 7 to 9 year old in a tween concept store, but I think the older tweens would much rather shop in the ‘cool’ older teens store.
Once again a retailer has chosen to focus their marketing efforts trying to appeal to a demographic that changes their minds with the changing of the tides.
While their ideas sound great in theory, I have to wonder whether the focus groups allowed Aeropostale to see changing trends, or to just get a snapshot of what’s hot at that moment.
I think we can predict two things. Somewhere along the way Aeropostale will be hot, and somewhere along the way they won’t. The key of course is to be hot more often than not, and I believe they can do so.
Aeropostale is focused, doesn’t overreach, and have shown consistent growth in their stores. They know that tweens will run hot and cold, but if you create that consistent store experience for both the tween and mom they’ll keep coming back.
They should do well. The real opportunity here is to capture sales away from department stores like Sears, which are convenient but style-deprived. Aeropostale has shown that it understands style at the right price; aiming younger will not only bring new customers, but will train those customers to look for the Aeropostale brand as they get a little older.
This looks to be right on the mark. Their business strategy is sound in that they are committed to a significant number of doors to test, and the niche is right. Mom & Dad get the sense that this is OK from a shopping, styling and price perspective and perhaps would allow the kids to shop there on their own. Kids get on-trend, but not too forward merch and there seems to be emerging cachet to the Aeropostale brand which reinforces the new P.S. extension. I’ll be watching this one.
Tweens are challenging because tweens are challenging. That said, the strategy seems like one that will be more positive than not.
Well, everything’s “overestimated” at the moment, except Walmart, of course. Anyway, the best chance this new P.S. concept has right now is to take a close look at the Forever 21 model and hit that hard–there’s still room there, market-place wise, especially with Express and others stuck in the 80s. The “Forever XXI Model”?–Stick to the open market in terms of product, make your stores fun vs. formulaic and think “flea market” at all times and you’ll win big.
Having said that, being like F21 will be a hard task for Aeropostale as, from what I’ve seen, their “success” formula has been based on price alone, not on fashion so, the jury’s out on this idea, we’ll have to wait and see. And in this environment, you won’t have to wait long.
One of the big differences between 7 to 12 year olds and 14 to 17 year olds is that the 14 to 17 group buy on their own and the 7 to 12 group has their parents in tow or maybe vice versa. Aeropostale has the unique opportunity of turning off the parents and kids at the same time.
Targeting a demographic that is only a couple of years removed from a retailer’s existing base seems frivolous at a time when seemingly more grounded spin-offs have been falling right and left (Abercrombie’s Rhuel being the latest to follow Pac Sun’s Demo and others). Color me concerned.
The challenge of the tween market is that you have two distinct customers, kids and their parents, involved in the buying decision. Not only do the kids change their minds more frequently than the older demo, but kids and their parents are too often at loggerheads about what’s acceptable and what’s not. This leaves retailers trying to thread a constantly moving needle.
Buying decisions…for the tween market they change fast. The tween brands need to have the Zara model; fast and fresh. They also need to be value priced–as the saying goes, everyone loves a hot dog…and a hot dog price. The Abercrombie & Fitch core is shrinking; the market for value fashion and change is in the air.