American Eagle Outfitters’ Executive Chairman and Interim CEO Jay Schottenstein has said this year that he wants the company to bring back fun and innovation to build more customer engagement, better customer experiences, and brand loyalty.
During the company’s Dec. 4 third-quarter financial results conference call, Schottenstein returned to that customer loyalty goal.
“As I said at the beginning of this year we need to bring fun and innovation back to our company,” he said, according to a Seeking Alpha transcript. “I think we made headway on this front. Our marketing events and lease volumes are more compelling; our stores both AE and Aerie reflect higher energy, stronger outfitting ideas, improved color palette, and overall better merchandising. This is an ongoing effort as we strive to continuously stay connected to our customers and build a better brand experience.”
Schottenstein likes where the company’s brands are positioned in today’s marketplace.
“We will stay true to the AE heritage lifestyle while continuing to increase our speed to market and improve the customer shopping experience across stores and digital channels,” he explained. “Aerie has been a standout performer. They have achieved positive comps and stronger profitability, which has continued into the holiday season. We have a highly capable team led by Jen Foyle. Now we need to keep the momentum going as we evolve the assortments and further expand the Aerie brand. On the technology front, we continue to drive advancement in omni-channel. Approximately 15% of digital sales are fulfilled through our ship-from-store capability, which is now in about 530 stores. We’ve seen faster merchandise shipping times and better inventory utilization. BOSS will expand to all stores next year. We also look forward to launching reserve online, pickup-in-store, providing additional shopping alternatives for our customers. We’re also seeing benefits from our new distribution center, which is cutting our average delivery time in half. We continued our global expansion strategy. In November, we opened three new stores in London to an encouraging customer response. We will selectively pursue new growth opportunities while staying focused on strengthening our brand domestically.”
American Eagle Outfitters has handled operational challenges very well, Schottenstein said.
“For example, we successfully managed through the West Coast port slowdown with no major disruption to our holiday flow or cost increases,” he said. “Although we’ve made progress this year we continue to face weak traffic in a highly promotional sector. In addition, as we cycle against our own of history of heavy promotions, it’s been difficult to achieve consistent sale performance. Our strategy has been to maintain price integrity by reducing promotional activity. We strongly believe this is the right approach. We’ve seen some success, yet have plenty of room for improvement. It goes without saying that this is made possible only with great merchandise, the right balance of quality and value, strong inventory controls, and engaging customer experience, all major priorities as we move forward.”
Roger S. Markfield, the company’s Vice Chairman of the Board and Executive Creative Director, said AEO is uniquely positioned as the casual youthfully optimistic American inspired lifestyle brand, “which ranks high among our customer base. The emphasis we place on being true to our brand image is a very important distinction from how we have operated in the recent past. And in my view, it’s the change, that when executed well, will successfully lead us into the future.”