PLUS: American Eagle marks 30 NYSE years with a record stock high. CMO Craig Brommers discusses Gen-Z trends and collabs with Coco Gauff and Trevor Lawrence.
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00:00That was American Eagle ringing the bell here at the New York Stock Exchange and celebrating
00:1330 years as a publicly traded company, the Gen Z focused clothing retailer stock at an
00:19all time high during COVID when malls were supposed to largely die out.
00:24But as Mark Twain once said, the reports of my death have been greatly exaggerated.
00:29The same be said of the American Shopping Mall.
00:32It's Ask American Eagle Chief Marketing Officer Craig Brommers.
00:35Craig, good to see you, sir.
00:37So malls were supposed to die in COVID and you guys are largely mall anchored.
00:41What happened?
00:42You know, it's funny.
00:43Everything old is new again.
00:45And I often say that Gen Z are social creatures and of course they're on their phone, they're
00:50on social media all day, but they're social creatures like teenagers have been forever.
00:55And to your point, foot traffic has come back in a big way to the American Mall.
00:58It's a really kind of refreshing thing to see.
01:00I have three teenagers who love going to the mall.
01:03So your CEO recently said, from our standpoint today, we're a $5 billion business.
01:08We think the next few years we can be a $10 billion business.
01:13No pressure, Craig.
01:14No pressure.
01:15Oh, what gives him so much confidence?
01:16What message or clearly the clothing is resonating with this generation?
01:21Well, I think there's a couple of things.
01:22First of all, American Eagle has a best at category.
01:25That's jeans.
01:26It's literally the number one seller of jeans in America to women of all ages and the dominant
01:32force in terms of jeans for Gen Z.
01:35And when you have that best at category, especially such an American staple, you can command some
01:39price dominance in the marketplace.
01:42I think the second thing that we have really evolved into is it's not a customer relationship
01:46anymore.
01:47It's almost a customer partnership.
01:49We've vastly expanded our loyalty program.
01:51We're highly active on social media.
01:53We have 40,000 store associates that help people get into the clothes that make them
01:58the most confident.
01:59I'm curious what social media platforms you take most advantage of.
02:04For Gen Z, TikTok and Instagram are definitely the one to power punch.
02:07I will say Snapchat is also a pretty strong effort.
02:11But in my long, long, long retail career, I don't think I've seen anything like TikTok
02:15before.
02:16When something goes viral on that platform, it truly affects our top line.
02:22I always get the call from our chief digital officer of, hey, this thing is selling fast.
02:26It must have been on TikTok.
02:28I've never seen any social media platform move product, elevate businesses.
02:33Are you disturbed by this potential U.S. ban they're arguing before the courts right now?
02:38My feeling is, no matter what happens, there's going to be a market for short form video.
02:46And so, of course, we're paying attention to what's happening.
02:48But listen, we're active on TikTok, we're active on Instagram.
02:51We're active on Snapchat.
02:53We will be fine.
02:54You didn't mention Twitter now called X.
02:57Why not?
02:58You know, retail has never had that much success on Twitter now X.
03:02I think that we'll be curious and open minded to hear about their plans as we hit important
03:07Q4.
03:08But for such a visual industry, which retail is, those visual platforms seem to do better
03:13for us.
03:14Does the toxicity of their CEO, Elon Musk, some of the messages, some of the misinformation
03:19that's out there, scare a chief marketing officer?
03:22You know what?
03:23I think every platform has some bad actors, and I think we have to be aware and willing
03:29to pivot if we encounter some of that.
03:31So I don't think that's honestly just about X.
03:33I think that's everywhere.
03:34Indeed.
03:35So we're back to school now a couple of weeks.
03:37How pivotal is this time of year for American Eagle?
03:40We call it our Super Bowl.
03:41It's a really important few weeks.
03:44And as we talked about in our Q2 earnings call, it's been a pretty strong start for
03:50the brand.
03:51And it only gets bigger from here, right?
03:52Q4 and holiday is going to be very important.
03:54Listen, I've been doing this for a while, and I believe that the best brands win mind
04:01share and market share during uncertain times, of which American Eagle definitely is.
04:06You said earlier, what's old is new again, and back after 20 years is live your life
04:11as a slogan.
04:12Why?
04:13I grew up on American Eagle as a kid.
04:16Now it's fully back.
04:18What's old is new again.
04:19Why is this resonating?
04:20Why bring it back?
04:21Well, of course, we did all of this customer research to tell us what Gen Z and soon Gen
04:25Alpha wants to hear from our brand.
04:28And the biggest unlock was, unfortunately, this mental health crisis that is happening
04:32right now.
04:33And we thought, what an amazing opportunity to bring back actually a phrase we own.
04:37We literally trademark live your life 20 years ago.
04:40And live your life is a call to arms of let's get out and be in the real life and experience
04:48real life again.
04:49And so far, the campaign and the platform is off to a great start.
04:53And it's off to a great start because of some faces, Coco Gauff, the tennis legend.
04:58Trevor Lawrence, the Jacksonville Jags QB.
05:01Why are sports stars the right fit in this moment?
05:04You know, American Eagle has always been at the center of culture, and there's no doubt
05:08that sports and athletes are having a moment.
05:10And our focus is less about what Coco and Trevor and athletes are doing on the court
05:15or on the field.
05:16It's actually off the court because they've become style icons.
05:20Coco, on the cover of Vogue magazine this year.
05:22Trevor, you know, the highest paid NFL quarterback, definitely doing those tunnel walks before
05:27the game.
05:29These are athletes that are setting the tone for culture, and it's really been fun to work
05:33with them.
05:34Interesting.
05:35And you guys don't just guest.
05:36You do your homework.
05:37You have a panel where you talk to more than 2,000 15 to 25-year-olds.
05:41That we can all appreciate.
05:43You want to hear from the source.
05:45What are you hearing from this generation in terms of what they want, what they need
05:48from a brand?
05:49One thing we've learned with Gen Z as our target audience is you have to be nimble and
05:54flexible because trends are moving so darn quickly.
06:00And so when we hear from Gen Z about this back-to-school season or the holiday season,
06:05quality, value, an enduring brand, and values that reflect their own values are what Gen
06:13Z is voting for.
06:14What are those values?
06:15Well, for us, it's all around self-expression, community, but inclusivity, and that's something
06:20really that has set our brands apart from others in the marketplace.
06:24Our sister brand, Aerie, the very first to market around no retouching for women and
06:29all around women's empowerment.
06:31American Eagle, obviously, was the antithesis to the old-school Abercrombie & Fitch back
06:35in the day, more inclusive, more reflective of what Gen Z looks like.
06:40Interesting.
06:41I have three kids.
06:42I need your research to try to understand them better.
06:44You'll also be popping up at college football games around the country.
06:48Why do you have to, why do brands say they need to do activations, not just sit home
06:53and market on social media?
06:55I think in real life, activations are where you get to truly connect with customers.
07:01And so when I think about modern national campaigns, yes, there's talent, yes, there's
07:06media, yes, there's creative, but the true connections come in real life.
07:11College football, all about community and bringing people together, and we want to be
07:14part of that.
07:15You've talked about the importance of entertainment for a brand.
07:19Talk about that.
07:20Why?
07:21How'd you come to that conclusion?
07:22You know what?
07:23I believe that retail is actually not about retail anymore.
07:25Retail is an entertainment business, and we're battling for mind share of consumers just
07:30as much as we're battling for their credit card.
07:34And so we actually build out story arcs throughout a season, almost like a TV show, and of course
07:41we give ourselves some flexibility, but the reality is we are developing almost 500 pieces
07:48of content every single week, and so we need to think like a programmer, and we do.
07:53Lastly, can I pull off the jean jacket, because I'm not the coolest guy in the world.
07:59You rock it right now.
08:00Well, I appreciate that, but listen, I'm a dad of two Gen Zers myself.
08:04I think you can pull this off.
08:05This denim on denim on denim is happening.
08:08That's what I was wondering, because I remember a time that that was no longer cool.
08:11Is it back?
08:12It's hugely back.
08:13Denim is having a massive year.
08:15Can you layer it?
08:16Does it have to match the denim?
08:18That may be above my pay grade, but I feel comfortable in this, and I think you can pull this off.