Market Research for Urban Outfitters

Market Research

Company Analysis

A place where college and graduate students could purchase inexpensive clothing and décor for their apartment, Urban Outfitters was just an idea for a school project before it became the unique and well-known retail store that it is today. Richard Hayne and his old college roommate, Scott Belair were just college students when they conjured up the idea of Urban Outfitters in 1970, the same year they opened the first Free People store in Philadelphia.

10 years later, the store’s accumulation of sales reached $3 million in revenue

which induced Hayne to open another store in Massachusetts near many colleges. In 1987,

Hayne brought on Kenneth Cleeland to manage bookkeeping and to manage the shoplifting

problem that the stores were having. Due to the new way of managing theft in store, profits

increased which helped Cleeland assist Hayne in being able to borrow three million dollars to

open six stores within a three-year time span. In 1991, URBN sold shares for $18 a piece, today

the company is traded on the Nasdaq Exchange. By 1995, there was an Urban Outfitters in many

major cities across the United States. Urban Outfitters was the first of the brands to make it across the Atlantic in 1998, and found itself on Kensington High in London. In 2000, Urban opened its official online store. Little over 40 stores were opened within the years of 2000 and 2002 and by 2005, there were over 75 stores within the continental US.

Hayne and Belair’s vision for Urban Outfitters was to give college kids a place to shop where they could feel comfortable in their own skin The unique look of their stores with exposed brick and stripped walls gives Urban Outfitter their own personal flare and unique character, keeping the atmosphere fresh while still preserving the history.

To its young adult shoppers, Urban Outfitters sells products that are the perfect mix of nostalgia and trendy. The retailer has successfully produced collaborations with companies that were big 10, 20, and even 30 years ago by managing to keep them relevant. Because of the success of these collaborations, the company is able to sell their merchandise at full price, “thanks to the right mix of exclusive brand partnerships and its own proprietary product” (Mau, 2016, para. 2). Popular retro collaboration collections have included 90’s-tinged Calvin Klein products, original Adidas and Fila pieces, and a throwback Wrangler jeans collection. There is a reason that “Urban’s most successful product may be from bygone eras” (Mau, 2016, para. 5). With their target consumers being ages 18-28, Urban Outfitters has been successful in implementing Nostalgia Marketing, which taps into “positive cultural memories from previous decades” (Friedman, 2016, para. 3). Millennials look for meaning in the products they buy. When they are able to connect to their purchases on an emotional level, companies have found success in what they’re doing. Friedman writes, “In an age of impersonal digital media, building social connectedness through nostalgia is an easy way for companies to leverage the optimistic feelings that often accompany walks down memory lane” (2016, para. 6). Urban Outfitters has managed to capture this essence in their successful collaborations.

Urban Outfitters has also seen great success from their 90’s inspired pieces. This throwback trend has been riding a high the past couple of years and the company has hopped on the bandwagon. From retro collaborations to choker necklaces to denim jackets and even to mom jeans, the company has capitalized on the growing desire for the 90’s style. Items on their bestsellers list are a great reflection of this trend. There’s the BDG Cream Corduroy Jacket, Reebok Club C 85 White Leather Trainers, Tommy Jeans Collegiate Logo T-Shirt, BDG Bleached Light Blue Mom Jeans, and the BDG Boyfriend Medium Wash Denim Jacket (“Women’s Bestsellers”). While scrolling through the bestsellers list, shoppers will wonder if they’ve been transported back to the 90’s, not just with the styles but with the pattern and color choices as well. While these items have great popularity with Urban Outfitters’ consumers, the company’s sales haven’t fared so well with graphic tees. Much of the controversies facing the company have stemmed from inappropriate t-shirts and, even with the 90’s repeat in America, the graphic shirts have not made a comeback. Some of that could be attributed to the cultural deafness presented on many graphic shirts, which is discussed in the following paragraph.

The company has experienced their fair share of failures as well. Most recently, a particular shampoo caused a social media uproar in the United Kingdom, leading to Urban Outfitters pulling it from all shelves across the country. The shampoo in question, “Peachy Head Peach Shampoo for Suicidal Hair”, was heavily criticized for being “irresponsible” and “out of touch” (Thompson, 2016, para. 5). In response to the backlash, the company released a statement saying, “Although the product’s name is a humorous attempt to market a shampoo for hard-to-manage hair, we reevaluated and felt it was not appropriate and it was pulled from the Urban Outfitters website” (Thompson, 2016, para. 8). This is not the first time the company has had to deal with insensitive products. In 2015, the company was forced to pull a striped tapestry that was eerily similar to the uniforms worn by gay prisoners under Nazi ruling. In 2014, the company released a limited-quantity “Vintage Kent State Sweatshirt” that appeared to be blood splattered, reminiscent of the 1970 Kent State Massacre that killed four students. The company has also been called out for t-shirts with offensive sayings like, “Eat Less” and “Depression” (“15 Controversies”, 2016). Urban Outfitter’s products have been known for offending people groups as well. A Navajo collection, which was later renamed, led to a lawsuit from the Navajo Nation who hoped to lay legal claim to damages from the products (Davies, 2016). The company hasn’t been quite able to erase these controversies from consumers minds and their image has suffered as a result. Run a quick Google search with the term “Urban Outfitters Controversy” and the 361,000 results are dedicated to ways the company has gone wrong and why consumers now refuse to do business with them.

Last year, Urban Outfitters began an advertising campaign called “The Class of 2017” to promote changing the way we view our society and the world around