Why Retailers Are Missing Out on Mobile With Millennials

Chains Like Abercrombie, American Eagle, Aéropostale Simply Adapted Desktop Sites for Phones. Now They're Playing Catch-up.

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Credit: Courtesy American Eagle Outfitters and Abercrombie & Fitch

Millennials are having a party, but it seems the invitations for most teen retailers never hit their mailboxes. Perhaps that's because such invites would've been issued via mobile phone.

At a time when younger generations are spending upward of 80 hours a month on their mobile devices, several apparel brands are missing out on a commerce opportunity that led to $35 billion in U.S. sales last year. Such brands have been slow to enter and innovate in the mobile sector, a sluggishness that experts say could be costing them sales. Retailers including Aéropostale, Abercrombie & Fitch and American Eagle Outfitters are now scrambling for relevance among their tech-minded consumers. Some have recently added e-commerce capabilities and curated music through their mobile apps, though others haven't gotten even that far.

"Most aren't ready to tackle this," said Julie Ask, VP and principal analyst,
e-business and channel strategy, Forrester Research. She noted that many teen retailers haven't invested enough in mobile and have simply shrunk their desktop sites. They don't offer a comprehensive experience that includes merging brick-and-mortar stores with mobile apps, a rather expensive endeavor. These brands "have fairly early-stage, simple mobile experiences," said Ms. Ask.

The stark simplicity of the teen brand app experience is amplified when compared with shopping apps from retailers such as Target, Home Depot and Sephora. Those brands have invested huge amounts in infrastructure for loyalty-rewarding coupons and virtual reality elements that are winning over consumers. Earlier this year, Sephora rolled out to its already-popular app a virtual try-on feature for lipstick.

With a growing population of mobile shoppers -- 40% of consumers used their phones last year to search for what they wanted, compared with 36% in 2014, according to Accenture -- there's quite a bit at stake. And convincing a consumer, especially a notoriously fickle teen, to download an app and dedicate precious phone storage to a brand is difficult. The majority of shoppers, 73%, have two or fewer retail apps on their phones, online coupon site RetailMeNot found in a recent study.

"If they're willing to download and give up more space on their phone, there's a value trade-off -- they're looking for increased relevance," said Billy May, senior VP-direct-to-consumer, digital and customer marketing at New Albany, Ohio-based Abercrombie & Fitch, which counts 4 million downloads to date on its namesake and Hollister apps.

Teen-focused brands understand the issue, but are still playing catch-up; they're reluctant to devote big dollars to mobile. The Aéropostale app, for example, seems to be exactly the same as the brand's mobile site, though it, oddly, features a different logo -- a bare-bones endeavor.

Abercrombie's app offers a slightly more optimized experience, with some branded photography and an easy-to-find playlist with its own tab. American Eagle offers the most feature-rich experience. The app is more brand-immersive with photography, and also dabbles in omnichannel capabilities by providing a bar-code scanner for in-store items. Like Abercrombie, the app has its own radio station, but the button is hard to find.

Shoppers would likely need a more compelling reason to download any one of these apps -- radio is nice, but it doesn't help a brand stand out. Ideally, an app should showcase a strong brand voice with contributions from fans via social media, and also offer integrated features for brick-and-mortar shopping.

Abercrombie and American Eagle are working on such ideas. New York-based Aéropostale, which has used social and mobile messaging in the past to market its brand, declined to comment. The struggling retailer -- Aéro has reported two consecutive years of losses and recently said it will lay off 13% of its corporate workforce -- has made few recent updates to its three-year-old app.

Abercrombie, which works on its mobile initiatives in-house, added native commerce last year to its five-year-old app and is ramping up its personalization features. It's also testing some loyalty tools and omnichannel features. Roughly 60% of the brand's web traffic is mobile, equal to a nine-figure business. Earlier this month, the retailer's Hollister brand partnered with Snapchat on a selfie initiative.

"It's definitely around customer value and not only measuring that over time but measuring that across channels -- in-store, mobile, web or the app," said Mr. May. "We're most concerned that we are developing relationships and driving greater value."

Like most of its competitors, American Eagle works on its mobile offerings and marketing in-house. The brand has made a point to incorporate discounts and promotions into its app, which has helped propel total downloads to around 7 million.

After adding touch ID and radio last year, American Eagle plans to incorporate more editorial and social content into its app for a more cohesive branding experience. The main goal, said Senior Director of Mobile Jeremy Xavier, is to strengthen relationships with shoppers by engaging them. This could mean adding imagery of customers wearing American Eagle clothing, or providing a platform for feedback on music or products.

"We're a lifestyle brand and it's not about our lifestyle, but about our customers,'" said Lance Wills, American Eagle's VP-digital technology. "Giving them an opportunity to participate in what defines our brand, like our music set, is continuing to allow that customer to own how we develop the brand."