For Abercrombie & Fitch, Buzz + Value = Loyalty

At the height of the recession, things looked especially bleak for teen retailer Abercrombie & Fitch. Long known as the priciest of a crowd that includes brands like American Eagle and Aeropostale, cash-strapped teens took Mom and Dad’s money elsewhere. These days, A&F’s customers aren’t just enthusiastic, they’re rabid -- propelling A&F to the top of the specialty retail sector in Brand Keys 2012 Customer Loyalty Engagement Index.

In fact, Robert Passikoff, founder and president of Brand Keys, tells Marketing Daily, keeping its prices high is likely what is fueling that loyalty. “I would call what they did an investment in their brand,” he says. “And yes, in a way, this was a game of brand Russian roulette, and at that time, everyone in the retail world was in this desperate panic. And while they did adjust their pricing somewhat, there was not an air of desperation about it. That seems to have paid off, and it reinforced the positioning of this brand as being worth the money.”

Of course, it helps that the retailer is so shrewd about managing buzz, too. Back in August, the company got a lot of ink by offering to pay “Jersey Shore”’s The Situation not to wear its clothes. That announcement, and the legal maneuverings that followed, served to generate more buzz among young trendsetters, a move Passikoff describes as “brilliant.” But mostly, he says, A&F’s move to No. 1 comes down to understanding the way consumers perceive value: “They think A&F’s clothing is worth the money.”

Among specialty retailers, Victoria’s Secret came in at No. 2, followed by L.L. Bean, J. Crew, H&M, PacSun, American Eagle Outfitters, Old Navy, and the Gap.

Similarly, he says, masterfully working the brand-value equation is what propelled Costco to the top of the warehouse category for the year. “People like this brand because it offers them a good value on brands they already want; it’s all about the merchandise.

They are called price clubs, not 'the cheapest crap I can get’ clubs.”

Dillard’s came in first place among department stores, and again, Passikoff says, it’s due to perceived value. “It’s given them an edge over Macy’s, which is always marking things down with its red-star specials.” Three value retailers came in next: T.J. Maxx ranked No. 3, followed by Kohl’s and Marshalls. “JCPenney came in sixth out of seventh,” he says. “Only Sears ranked worse.”

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