Abercrombie & Fitch SWOT & PESTLE Analysis

Strength

1. Digital and omni-channel capabilities: Abercrombie & Fitch has worked towards optimizing its global store network. It has rightsized its store fleet and is adapted to the evolving role of the store due to changing consumer preference. It also tries to create best-in-class experience for the customer which would also increase the profitability across the multiple channels that it operates through. It tries to increase the speed and efficiency of its concept-to-customer product life cycle. It invests in increasing its supply chain capabilities for greater speed and flexibility. Leveraging data and analytics helps the company to offer the right product at the right time in the right place to the customers hence giving them more value and better experience. As of Q2-FY20, the company operates 850 retail stores and has the capability to ship merchandise to roughly 120 countries. The company also recorded digital net sales of over $1 billion in fiscal 2019 and 33% of fiscal 2019 net sales were derived internationally. Mobile engagement has also witnessed a steady growth, with moe than 80% of the apprel retailer’s digital traffic clocked from mobile devices in fiscal 2019. The American retailer continues its strive to enhance and expand mobile capabilities, including seamless checkout processes and smooth navigation of products, to improve the overall mobile experience.

2. Strong customer engagement programs:Abercrombie & Fitch has undertaken multiple initiatives for its transformation. It has improved its customer engagement through its various loyalty programs and market optimization. Using data science, it is now in a better position to leverage data including its multiple loyalty programs. This helps the company to engage with the customers across various channels. This gives the firm a better hand in understanding the customer insights. It also helps in driving more efficient and effective marketing spend. In order to improve customer engagement, it also launched two new offices with regional headquarters in London and Shanghai. Loyalty programs are rolled out in China also. Data analytics has helped in getting useful consumer insights which drive improved responsiveness to customer demands and also introduce additional personalization.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Focused on conserving energy and reducing water wastage in internal operations: Abercrombie & Fitch focuses on reducing the energy consumption and has taken various measures regarding it. It also works towards renewable energy opportunities in green power resources like wind, solar, biomass, geothermal, biogas and low impact hydro power. It works towards identifying opportunities to procure green electricity for operations. The American retailer also quantifies market based purchased electricity emissions to set scope 1 and scope 2 carbon reduction goal. The Company also identifies supply chain scope 3 emissions and associated goals. It is committed towards reducing water usage and has taken initiatives like installing automatic faucets and toilets, limit water and energy use by combining teams’ wash loads and automated irrigation system to optimize water distribution.

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