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Urban Outfitters (UO) is an American clothing and accessories retailer; it operates in the US,
Europe and Canada – offering clothes, accessories, house hold items, footwear, as well as various gifts and novelties. The Brand is known for its regularly updated inventories and creative product ranges which are inspired from bohemian, kitschy, hipster, retro and vintage styles; they take influence from past decades and also include a vintage renewal section in their stores.
Urban Outfitters targets a very specific group of consumers, this has worked successfully when creating their unique clothing ranges. The executive creative director at UO explains they target,
“the incoming freshman, the struggling art school kid, the girl who dresses differently than her friends. The kid who has a band, anybody who has a band is our customer… it’s someone that just does something differently than others.” (Kevin Lyons, September 2012.)
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A Market Positioning and Fashionability Graph is a diagram that visually shows where brands sit in terms of price and how fashionable they are. Urban Outfitters is relatively expensive compared to its main competitors therefore it has been placed higher up than cheaper brands such as
Missguided, GAP and Forever21. These brands are known to sell items for a lower price to entice customers; however they are considered to be ‘less fashionable’ than the more popular high street brands such as Topshop and River Island. From the graph above you can see that Urban
Outfitters main competition in terms of Fashionability is Abercrombie&Fitch, All Saints, River
Island and Topshop. These are all brands that target a similar age of consumers, but Urban
Outfitters also has to compete with online companies. ASOS is a highly successful online brand that sells to consumers at a similar price to Urban Outfitters; both brands have a good fashionable reputation and regularly create new product ranges to lure customers into buying from them.
From the graph is it clearly shown that Urban Outfitters has to compete with both online stores and high street brands, however not all competition is harmful. There are several benefits to having intense competition e.g. it urges UO to improve their customer service and focus on their target audience. It will encourage the brand to pay better attention to their target market and help to create better quality ranges that are more in line with what the consumer wants.
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Below is a customer profile of a typical customer who would shop at Urban Outfitters.
Gender: Female
Age: 20
Clothing Size: 8
Social Class: Affluent student who is able to pay for the high living costs of studying in London.
Education: Second year art and photography university graduate; studying in London.
Life stage: Second year at university – aiming for a first degree in art and photography.
Geographical: Central city location, close to busy high streets and access to large shopping centres.
Marital
Status:
Single with no children
Income: University fees funded by parents; part-time work on the weekends as a Sales
Assistant
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Has a large interest in professional photography – regularly uploads to Facebook and
Instagram.
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Is willing to pay more for better quality goods that are ‘in-trend’.
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Often creates outfits and enjoys shopping at vintage markets/stores – styles outfits and uploads to a fashion/beauty blog.
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Fashion conscious and keeps up to date by reading magazines such as Vogue/ Grazia/ Look/
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 etc.
Busy social life – likes to dress unique and experiment with bohemian and ‘hipster’ clothing.
Interested in contemporary art, fashion shows, attending exhibitions and music.
Enjoys travelling and investing in cultural activities.
Music: Attends gigs/ concerts/ festivals – mainstream RnB/ alternative/ indie/ electronic and dance.
Socialising: Festivals/ holidays/ clubbing/ bars/ eating out/ social media/ blogs/ photography/ concerts and music scene/ art galleries/ fashion events/ catwalks/ exhibitions.
TV: Soaps and reality TV – romantic comedy/ action and drama films.
Ambitions: To have a large following from social media on blogs and photographic portfolio. To attain a job as a recognised and successful photographer.
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UO has a fully operation website which sells worldwide, however they must abide by international trade regulations. For example, they must treat customers equally and give them the chance to return or get a refund.
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There are many different environmental laws that will affect UO. One ecological law in particular is transporting or dealing with waste; laws on the safest and environmentally friendly way of disposing goods/produce must be abided by.
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Employees have certain rights which Urban Outfitters must take into consideration before hiring e.g. working hours, healthy and safety, sickness and absence laws and disciplinary and grievance procedures. It is important for UO to keep ahead of these employment laws to avoid penalties or being sued.
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There are a group of laws that have been designed to protect consumers, fair trade and unfair competition. These laws were put in place to keep ‘perfect competition’ in the retail industry i.e. fair competition allows for innovation and stops one brand from dominating the market. These laws will largely affect UO, as it will stop them and other retail brands from engaging in fraud or unfair practices that will gain advantage on competition.
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A political impact on UO is government legislation; for example, a government may require
UO to disclose all the information they have on products, sales, revenue, etc. Having this information available online for customers and competitors to read can impact on business
 growth.
Both international and local pressure groups will have an impact on UO. A pressure group can persuade the government to stop production, which may be unethical or unsuitable. For example, “after a multi-state campaign led by an anti-drug group, Urban Outfitters has decided to pull a line of flasks, shot glasses and pint glasses that look like prescription pill bottles” (Mintz, Z. June 2013)
 There are policies towards unemployment, which could increase costs. For example minimum wage has increased in the UK from £5.93 in 2010 to £6.50 in 2014 for 21 and over. (GOV.UK,
2014)
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UO sells its products worldwide in different currencies; a change in the exchange rates will have an impact on the price of goods, therefore affecting the demand for goods by overseas customers. It can also affect import costs and the number of sales from UO’s online system.
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Economic growth is the increase in a countries’ production; this has a number of benefits to
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Urban Outfitters. For example, it can lead to lower unemployment and increased profits.
The current state of the economy will impact on level of consumer spending; during a recession, there are falling levels of spending and lower consumer confidence. However during a ‘boom’, UO will benefit from an increase in the level of consumer spending.
Consumer confidence will drastically impact on the sales at Urban Outfitters. When consumers are increasing the amount that they spend, the demand for UO’s goods will increase. However, when consumer spending is low, UO should introduce different pricing strategies e.g. offers, discounts and competitions that will help to encourage customers to spend.
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High availability of credit will increase consumer spending. Urban Outfitters target students from college and university; if there is a high availability of credit, students will be encouraged to increase spending in more expensive ‘fashionable’ high street stores such as UO.
Monetary policy will affect the way consumers buy; when interest rates are low consumers
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will have a higher rate of disposable income. This is a benefit for Urban Outfitters as their products are relatively expensive and sales will only rise if consumers have disposable income to spend on their goods.
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The ageing UK population and increased migration will have an impact on consumers spending behaviour. David McCorquodale, head of retail at KPMG explains, “The changing demographic profile of the UK is a major influence on consumer purchasing power, shopping behaviour and shopping preferences… its implications are important for retailers to
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
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 understand and anticipate.” (McCorquodale, D. 2014)
Income distribution (the growing inequality between the rich and the poor) leads to social impacts such as, increased crime rates and changes in consumer confidence.
There is an increase in the awareness of the importance of ethically manufactured products.
For instance, some consumers will pay more to support brands that produce clothes within good working conditions and use environmentally friendly materials. UO have been criticized for their production system, Ethical Editor Rob Harrison says, “companies like Urban
Outfitters… appear to have no policies in place to prevent abuses by suppliers.” (Harrison, R.
2009).
Family sizes have changed in the UK which impacts on the spending in the retail industry.
With smaller families living in the UK, consumers are less price-conscious and are more likely to ‘splurge’ on higher end products. UO has therefore taken advantage of this demographic change and targets its range on individuals who are prone to spending more than larger families.
Fashion trends and fads change quickly; items are considered ‘cool’ for one season and then become unpopular. The retail industry is dependent on the buying habits of the consumers therefore it is extremely important that Urban Outfitters regularly research what their target market wants.
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There is an increase in online shopping; although this means that Urban Outfitters can increase their sales to other countries, it also means they have more competition from etailers such as ASOS and Missguided.
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The creation of devices such as the iPhone allows consumers to purchase and browse goods
‘on-the-go’. This means that customers are becoming more ‘price-savvy’ by comparing the prices of clothes between competitors.
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Urban Outfitters entice customers through social media pages, regularly advertising on
Twitter and Facebook. This is due to the changes in information technology; customers are updated on new trends and ranges available through advertising on social networks.
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Technology is changing rapidly with the help from government and company research. An interesting new concept that could be used by brands such as unique retailer Urban
Outfitters is the creation of digital skin. Changes in material science will affect the way brands design, produce and sell their goods to consumers in the future.
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Costs and energy use will change as automated and mass production becomes more advanced; factory jobs are being replaced by machinery. Even in-store jobs are starting to be replaced by new technology. For example, scan and check out tills.
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The speed of technology transfers has increased; migrant workers can view and apply for jobs in the UK and easily send money back home. Technology advances allow for more information to passed between countries.
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There are high rates of technological obsolescence as new products are being created to replace the old systems. It is important when launching new systems such as a new website, that it is going to suit the customer.
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• Urban Outfitters is a well-known brand which sells to the US, Europe and Canada; they have a strong management system and employees which operate in 140 stores.
• They operate in large stores averaging 9,500 square feet and attract customers by keeping the décor in style with the ‘retro/vintage vibe’ that the brand conveys. (Wiki Invest – Mercer,
J. And Haring, A. And Chang, E. (2014))
• UO sells worldwide via their well designed website; they also keep in contact with consumers via social media. They have a large following on Facebook and Twitter, gaining high positive feedback. This has helped UO to maintain their strong brand image.
• UO have a USP; the brand has a distinctive style and a vintage renewal collection. They can utilize the brands strengths by producing unique clothing that meets the needs of their target market.
• Due to their large stock range, UO benefits from economies of scale. This means they can attempt to reduce costs in the long run.
• Urban Outfitters has a defined niche market; they combine their product ranges with the
‘shop experience’ to target the right customers and entice them into buying more.
• UO has the ability to charge higher prices without it largely affecting the demand for their goods; ‘pricing power’ means they have a large returning customer base who are willing to pay higher prices for UO’s goods rather than shop at cheaper competitors.
• The brand sells good fashionable products that are relatively high quality – their unique ranges appear on popular high streets and shopping centers such as Oxford Street and Westfield
Stratford Shopping Centre.
• There is an opportunity for UO to expand into new areas of the market, for example they currently do not have a kidswear range.
Entering new markets is crucial if they want to expand.
• Urban Outfitters appeals to a niche market; their goods are specific to a certain group of 18-
30 year olds, ‘hipster’ clothing may not suit everyone’s wants.
• They have targeted slightly younger people; which can be a weakness as their products are quite expensive compared to other competitors such as New Look and GAP.
• UO have been regularly criticized for their slow service, which can in turn, damage their reputation and cause customers to shop at competitors like Zara who are more respondent.
• The company has a weak cost structure compared to other similar brands, which means their costs are high which narrows their profit margin. Their profits have been cut according to key findings from WGSN, “Urban Outfitters’ profit slid 12% to $67,6mil/49 cents a share…
Gross margin fell to 37.4% from 39.3%” (WGSN
News Team, 2014).
• The brand charges high prices for their items compared to their competitors, it can be argued that their goods are not very good value for money however customers are loyal and often willing to pay extra to shop at UO for the brands ‘fashionable’ reputation.
• UO have a high staff turnover (they often hire part time staff and have to replace them regularly in stores). This can hurt their ability to compete because its increases the brands expenses to keep rehiring.
• UO has a very distinct style, which may not appeal to everyone. Consumers can change their tastes very quickly; especially as fashion trends can become unpopular within a year.
Therefore its important for UO to keep up to
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• Greater innovation and increasing technology could help UO to produce their unique products and improve the customer experience. For example many stores now have advanced instore technology that allows customers to view products and create outfits.
• An opportunity to branch into international markets could offer UO increased sales; their current website sells worldwide but trialing stores in Asia and other parts of Europe could make increase the brands popularity.
• Collaborations on new ranges with music artists and celebrities with similar ‘hipster and vintage’ style could improve sales. Customers who want to have the latest celebrity vintage look may be enticed and therefore increasing sales. date with their consumers wants.
• UO has to compete with hugely successful multinational brands, both online and offline.
This intense competition can lower their profits as brands such ASOS and Abercrombie&Fitch can entice customers away with superior products.
• The current financial climate can have impacts on sales; a recession will generally have a negative impact on most retail companies including UO as they sell expensive goods where customers can find a cheaper alternative.
• The high availability of substitute products from competitors at a cheaper price can be a threat to UO, as it will lower their ability to raise prices.
• UO has a successful vintage renewal collection within their stores; however sourcing vintage clothes can be difficult. UO needs to ensure they source high quality clothes and has reputable suppliers.
• Law suites, that have deemed certain products to be offensive or inappropriate, have often targeted the brand. For example, a shirt that seemed to promote anorexia. This has had drastic impacts on their business as it leads to unusable stock that increases costs; it could also damage their reputation.
• Problems with manufacturing are a threat to
UO, which they cannot control; they should plan for when costs may increase out of their control.
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UO’s USP is a ‘quirky’ range of designs that is available targeting the outgoing young adult. Their core product category is Womenswear where they sell everything from dresses to jeans to jewellery to coats and jackets. They have a large in-store collection, which keeps in style with the bohemian/’hipster’ theme.
UO has created stores in over 140 locations that are edgy and enticing; you will find their unique clothing ranges available in a very similar setting in store. The upbeat ambience and vintage décor found in every UO store appeals to all potential customers. UO also encourages online sales through the use of their retro inspired website, designed to target bohemian online shoppers to browse their collections.
UO have less markdowns and promotions, instead they have invested in a new rewards program which has been put in place to encourage tech-savvy customers to sync their social networking profiles with the store; UO distributes reward to customers who mention the brand on Twitter,
Facebook or Instagram.
Urban Outfitters aim, as a brand is to create fashionable clothes with a unique and ‘funky’ style.
Although considered quite expensive for the value of the goods, they have creative and innovative designs that keep customers enticed into regularly buying from them. UO have a niche market of customers but could aim to lower prices by cutting costs in the future to expand their target audience.
UO have a hiring process designed to ensure every employee will fit in well within the brand and will provide excellent customer service in stores, which creates a positive experience for all customers.
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High quality and relatively expensive compared to other high street stores; they sell unique and fashionable products that appeal to the ‘alternative style’ customer.
Their goal is to, “offer a product assortment and an environment so compelling and distinctive that the customer feels an empathetic connection to the brand and is persuaded to buy.” (URBN Company Profile, 2014).
They target 18-30 year olds with a creative, distinct and unique sense of style. They target affluent people who live nearby cities who are enticed by ‘hipster’, retro, vintage, bohemian and alternative trends.
Dresses, swimwear, tops, bottoms, bags, outerwear, accessories, and intimates. They also sell gifts, novelties and homeware.
They price their goods at the upper end of the high street.
Their main competition is from Abercrombie & Fitch, All Saints,
River Island and Topshop. They also compete with online brands such as ASOS and Missguided.
The sub-brands sold within Womenswear are; Little White Lies,
MinkPink, Pins & Needles, Staring at Stars and Vagabond
Stores have been set up in large metropolitan areas – located in
North America, Europe, UK and Canada. Approx. 9,000 square
UO successfully display their funky vintage and hipster style within their stores. They aim to create a store that is a brand new experience for each customer.
They have a large, well designed and creative website that sells worldwide; they also sell via catalogues and have a large following on social media.
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Bloomberg Business Week - URBN: NASDAQ GS (2014) http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=URBN
(Accessed on 24 th September 2014)
California Transparency in Supply Chains Act (2014) http://urbn.com/doc/California-Transparencyin-Supply-Chain-Act-URBN.pdf
(Accessed on 24th September 2014)
GOV.UK (2014) https://www.gov.uk/national-minimum-wage-rates (Accessed on 27th September
2014)
Harrison, R. (2009) http://www.ethicalconsumer.org/mediainfo/pressreleases/clothesshops.aspx
(Accessed on 29th September 2014)
Helixa – Strategy Design Firm (2013) http://www.slideshare.net/Helixa/urban-outfittersgroupcasehelixa (Accessed on 1st October 2014)
http://www.buzzfeed.com/sapna/the-entertaining-and-cringe-inducing-ways-urban-outfittersd#4ufoti (Accessed27th September 2014)
Mintz, Z (June 2013) http://www.ibtimes.com/urban-outfitters-pulls-prescription-pill-bottle-linepoliticians-cite-national-health-crisis-teen (Accessed 27th September 2014)
Tutor2u (April 2012) http://www.slideshare.net/tutor2u/buss4-business-cycle-economic-growth
(Accessed 29th September 2014 )
URBN Company Profile (2014) http://www.urbanoutfittersinc.com/profile/ (Accessed on 24 th
September 2014)
WGSN News Team (2014) http://www.wgsn.com/blogs/intelligence/urban-outfitters-profit-dips-oncosts-signature-brand-weakness (Accessed on 25th September 2014)
Wiki Invest – Mercer, J. And Haring, A. And Chang, E. (2014) http://www.wikinvest.com/stock/Urban_Outfitters_(URBN (Accessed on 25 th September 2014)
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