Martin + Osa = Success?

Adding to the discussion several weeks ago about American Eagle, I have some new thoughts. In the Grand Rapids Press today I found a small little blurb titled “Eagle Spreads Wings.” This article tells about how American Eagle Outfitters Inc. is planning a chain of stores to market to 25 to 40 year-olds. The new chain is supposed to be named Martin + Osa, named after a Kansas couple who were photographers in the early 20th century. The stores will feature casual clothing, denim, and sportswear.

This may be a good idea for American Eagle, who also has some Bluenotes stores as well. They want to expand their market with this new line of clothing stores. American Eagle clothing was mostly marketed to the high school and college-aged youth. Their advertising, workers, and models all make this apparent. But what happens when this age grows up? Most likely they will completely adjust their clothing styles to more professional clothing for work. However, they will probably still want comfortable clothing for after work, weekends, and for camping/vacations. This is where the new Martin + Osa clothing comes into play.

While I don’t really care for the name, I do think that it can work positively for AE. American Eagle has developed a name for having quality clothing that is comfortable, stylish, and moderately priced. Once people find out that Martin + Osa is an AE brand, I think that they will be attracted to it. No matter how professional a person becomes, they will still want their casual and comfortable clothing for after work. If Martin + Osa can truly market themselves to the target market that they say, they will become successful.

Franchising Rubio's

The other day in class we watched a video about the popular Mexican fast-food restaurant chain called Rubio’s. Rubio’s has been around for 18 years in Southern California, marketing specifically to the youth. Today they have 128 restaurants, and have recently become a franchise. Their restaurants really promote product turnover. They frequently look at their cost of inventory and take that into consideration. They also emphasize fresh products, rather than using leftovers.

I think that Rubio’s idea of a franchise for expansion is smart. Franchising is an excellent way for a retailer to expand beyond their normal trade area, or budget. One person or group of people can only do so much, but when they start franchising they can really expand their market quickly. For example, McDonald’s would NEVER have made it as far as they did without franchising. But since they chose to do that there are over 30,000 McDonald’s all over the world!

I had never heard of Rubio’s before I watched this video, but now I’m kind of excited about it. We may see a Rubio’s in the western Michigan area before we know it, and we’ll have the power of franchising to thank for it. I love Mexican food, and I’ll be one of the first ones to visit a Rubio’s if I hear of them coming to the area.

Just Can't Contain the SAS

In class today we watch two videos about companies that really stood out in my mind. The first company is The Container Store, and the second is SAS.

The Container Store is a unique employer. They take a look at the history of the different views of productivity/motivation and blend them together and customize them for an optimal working experience. Included in this list is Maslow’s Hierarchy of Needs.

At the Container Store communication is an important part of motivation. They have a very humanistic approach, which is greatly treasured by the employees. They understand that employees are an asset to the company, and pay them 50-100% more than their competition does because of that reason. They train all of their employees a little in every position so that they all have a basic understanding of each department. This results in employees who feel much happier and much more motivated about their job. They take jobs that would generally bring low morale and poor quality employees, and convert them into prestigious jobs.

The second company is called SAS. It began in 1976, and today is the largest privately held software company around. At SAS they emphasize quality rather than quantity from their employees.

They have full health care coverage, onsite daycare, and onsite health facility for their employees and their families to utilize. They, like The Container Store, also greatly value their employees and consider them assets. They have a very small turnover rate, and also have a great crew of employees. They will spend the time to make sure that they hire a quality employee, and not just someone to fill in. They expect that if their employees are satisfied, then they will stay at the company for a long time.

I think that these programs are working great for these companies. It pays off for the employer and employees. Why can’t more employers look to these companies as examples?

Genuine Customer Service

Today I stopped at Best Buy in Holland, and I was impressed once again. I have consistently had good experiences there with customer service. To start, a man welcomes me every time that I walk thru the door. Then, as I walk around looking lost, employees ask if they can help me. They lead me to the DVD players, and a man gives me his personal advice about my current broken DVD player- without pressuring me to buy a new one.

After I talked to that man for a while, I walked over to the software department. I was interested in buying a quality, easy-to-use program for video editing. I didn’t know which one to choose, so I talked to another employee. While that employee didn’t know the best program to use, she referred me to a Geek Squad employee. That man spent some time with me, discussing the positives and negatives of each program. Finally he gave me his recommendation, and I agreed with his decision. Later at the checkout, he gave me advice on how to complete the rebate.

Customer service really makes a difference for me. I know that I can go to a place like Best Buy and get quality advice on subjects that I don’t know much about. I trust their advice, and best of all they don’t pressure me to buy since they are non-commissioned. They help me find answers to my problems, which is much more valuable than trying to convince me to buy something that I don’t want.

Places like ABC Warehouse should consider being non-commissioned as well. If they could lower the pressure that they put on people, and put their efforts into quality advice then people might be more willing to shop there. I know plenty of people who wouldn’t even consider going there because of the high-pressure salespeople. I know that they are this way so I don’t ever let them talk me into anything, but I talk them down to a low price instead. It’s sad that the only good thing that I can think about ABC Warehouse are the low prices, but maybe they can shift their image by concentrating more on customer service like their competitors.

Location, Location, Site Selection!

I enjoyed reading chapter 8 from our Retailing Management book. Chapter 8 is about the site selection for a retailer. I now see how complicated it can be to choose a site for a business. There are several things that retailers consider when assessing the attractiveness of a particular region, market, or trade area, and I will only discuss some.

For one thing, they want to know about the people living in the area. For example, what are their lifestyles, or how expensive are their homes?
Second, is the area growing, and does it have an ideal business climate?

A third and very important part to consider is the amount of competition in the area. A safe strategy is to be in an area with little competition. The only times that retailers should locate in an area with heavy competition is if they believe that their retailing format is better than their competitor’s.

Another factor that must be considered is the location’s accessibility. It needs to be easy for customers to come to the location. Several factors are taken into consideration such as road pattern, road condition, and natural and artificial barriers. Also, visibility, parking, congestion, and ingress/egress are all important as well.

So now I will consider all of these factors when I am shopping at the River Town Crossings Mall, or driving past some of my favorite retailers in Holland.

Fierce Rivalry of A&F vs. AE

While our group project was still on my mind I figured that I would put my thoughts in a blog. Both Abercrombie & Fitch and American Eagle have been nose to nose competing largely against the same target market for some time now. However, I feel that Abercrombie & Fitch is in a more competitive position over American Eagle. A&F has been around for over 100 years, so that gives them more of a history than American Eagle has. I did some quick internet searches and it seems that from surveys taken, teens more often recognize Abercrombie & Fitch as their first choice over American Eagle stores.

There are over 500 A & F stores, 150 abercrombie children stores, and a new chain of 32 Hollister stores targeted at high school students. On the other hand, American Eagle has over 600 stores in the U.S. and Canada. They acquired two Canadian specialty stores and changed Braemar locations to American Eagle, while Thriftys were changed to Bluenotes stores.

Abercrombie & Fitch is on the right track with their stores, but they should be careful with their line of children’s clothing. They ultimately wanted to appeal to teenagers and college-age girls and guys, but their children’s stores obviously don’t do that. All of their sexually suggestive advertising that is targeted at the youth may very likely offend the upper 20s to 40s that would actually buy the children’s clothes for their kids. A&F needs to make a decision whether to keep the abercrombie children’s stores and change their advertising scheme, or to concentrate on the A&F and Hollister stores with their current advertising.

A&F is already a well-known brand name that will essentially sell itself right now. As long as Hollister becomes well-known that it is an Abercrombie store, it will also be successful. Abercrombie should focus on these new Hollister stores and get them on their feet. They are significantly cheaper than Abercrombie & Fitch, which is very attractive to their 14-18 target market.

American Eagle is also in this market, but it is viewed as a less expensive imitator to A&F. Many people shop at American Eagle who like A & F’s clothes, but can’t afford their high prices. If A&F really promotes their Hollister brand to compete directly with American Eagle, then I expect that they would be successful. I suspect that many American Eagle shoppers will make their way into Hollister. If they do this, then they can still maintain the A&F name as an upper-end clothing line for that target market—thus getting the best of both worlds.