Repositioning strategies and organizational change

Repositioning

Three firms engaged in mass market clothes retailing are American Eagle, J.Crew and Burberry. Among the three, Burberry has the oldest demographic. J.Crew has the most upscale positioning and American Eagle caters to the youngest, most mass market crowd. Both J.Crew and AE market to kids, but whereas J.Crew and Burberry extend into adult markets (J. Crew in particular), AE maintains a youth-oriented target market. They also operate two other brands, Aerie (also targeted towards teen girls) and 77 Kids (aged 2-10). This leaves the firm with an opportunity to undertake a repositioning and slight image change in order to continue to grow. Demographic charts illustrate that the baby boom echo is presently moving through American Eagle's target market, and is beginning to move beyond young adulthood. As a result, American Eagle can make a repositioning effort to retain its customers as they move into their mid-20s and beyond.

In order to do this, American Eagle will need to make some changes to its marketing mix. One aspect of the repositioning will be with respect to product. American Eagle will need to extend its lines out to include mature clothing options, but they can also add more high-end designs to its roster as the new demographic has greater financial means. Placement is another area in which American Eagle can make a change. They can open new stores that offer a slightly less intense shopping experience, and position those stores in a more urban setting than their current suburban base. American Eagle's repositioning should not come at the expense of its current positioning as a relatively fashion-forward mass marketer. The new target market will respond to this, especially the members who have already been shopping at AE. With respect to price, marketing to consumers that have now entered the workforce will give AE the opportunity to move into higher price points. The production costs on the new goods will not likely be significantly higher, so the result will be improved margins.