MARKET WATCH: I Don’t Hate Hollister
Jeff Harbaugh
- October 01 2008
- 939 views
- 26 comments
I wrote this and posted it on my blog back in August or early September. I just read it again and decided I still liked it. Since Transworld Business has graciously given me space to write pretty much anything I want (so far) I thought I’d throw it out there and see what the response was.
Transworld Business’s highlights its main story in the August issue on its cover by stating “Everybody Hates Hollister.” But the subtitle is “What You Can Learn….” And that, indeed, is what the very well done story is about. I recommend it to everybody.
The thing is, I don’t hate Hollister. I admire the hell out of them. Back around 2000 (before that actually, as the first store opened in 2000) somebody at Abercrombie and Fitch actually recognized a market opportunity/niche nobody else had spotted and they’ve taken amazing advantage of it. My hat’s off to them. I like how they’ve done their stores for all the reasons the story discusses.
The actual title of the story is, “How Hollister Stole Surf.” I’m not quite so sure they stole it. In fact, I’m worried we gave it to them. Because we wanted to be “core” maybe? Because we’re a little too incestuous as an industry and talk to ourselves too much? Because if an industry company had opened a clearly “fake” Hollister style store, the rest of the industry would have been mad at and laughed at them?
Even in 2000, we knew that most surf customers didn’t surf and we were counting on that non participant customer for growth. When you think about it like that, what Abercrombie did with Hollister just makes sense.
They are apparently giving the customer what they want. And the customer always gets what they want. Somebody makes it for them if enough of them want it. Ask the snowboard and skate industries.
As an industry, surf made a decision, implicitly or explicitly, that the market segment represented by the Hollister customer should want what the traditional surf customer has alw
ays wanted. Or maybe a better way to put it is that we believed our aura of legitimacy, as the official representatives of surfing, was what all customers and potential customers should want. There’s a tiny hint of arrogance in there that I’ve seen in just too damn many industries when they are on top. Microsoft? General Motors? Customers have a funny way of not listening to an industry tell them what they should want or where they should shop.
Without the Hollister type of customer, where does growth for the surf industry come from?
There’s a sense in the article that Hollister is attacking “our” market. And there’s the usual question asked about, “How can the endemic market defend itself against such a powerful opponent.
Three comments: First, if all we can do is “defend ourselves” then we’re too damn late, aren’t we? Second, the industry can’t defend itself, but individual companies can and will and are adjusting their strategies to account for Hollister. Don’t wait for “the industry” to do something. Finally, I’d note that nobody, not one damn person in the whole article from the endemic market, suggested that maybe we should consider learning from Holllister and even (gasp!) think about adopting some of their ideas. The implication is that we don’t want the customer they have.
The exception, I guess, was PacSun, whose recent changes are clearly being made with the Hollister model in mind. I hope our “core” shops will consider thinking like that
Jeff Harbaugh is a consultant for the action sports industry and works with companies to identify and focus on critical business issues and opportunities fundamental to the bottom line.
For more information, visit www.jeffharbaugh.com.
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October 1st, 2008 at 10:06 pm
do they give the customer what they want? or feed it to them? did the market for fake surfwear always exist? or did they create it? big marketing money plus cool stores and reasonably well designed and made stuff = success.
October 2nd, 2008 at 5:48 am
I don’t know. But I do wish that the companies and people who are responsible for the success and growth of the surf market were selling their products to the customers Hollister is selling to instead of Hollister. But Hollister figured out something that they couldn’t or didn’t figure out. As a business person, I admire what Hollister did even as I wish they hadn’t done it so well.
October 2nd, 2008 at 6:03 am
I think the title should have been how “Hollister Sold Surf”. Simple. What did they steal an how does it represent surfing in anyway. Just because they have a surfboard in front of the store, it makes it surf. I said it in original post Hollister is just the Gap with a surfboard on the wall and moodier lighting.
October 2nd, 2008 at 1:09 pm
But does Hollister do anything for the industry?
People love to call out Pacsun & Zumiez but at least they are doing a ton of good stuff for their consumers such as sponsoring teams (usa surf team, donating the X-Games ramp to the YMCA down in SD) and the Couch Tour etc that stoke the consumers out with participation in the very sports & culture they are selling. So what does Hollister do for the consumers again??
October 2nd, 2008 at 5:06 pm
Simple facts:
If your product is better than other product, it will sell!
If your marketing is great it creates demad for the product and drives sales.
Regardless of price, if there is a price to value relationship that makes sense to the consumer, the product will sell.
Put that inside a nice retail environment and you have Hollister, or apple, or porsche… Many examples of successful companies using someple prinicples of business.
They are in business so they care about making money first, they’ll let the whole industry fight over who is core, and sell clothing to anyone who can fog a mirror. You can’t hate them, you have to beat them.
October 3rd, 2008 at 7:55 am
The bottom line is it will be tough to compete with Hollister until the endemic companies change their supply chains and long term busines strategies. Hollister is a verticle retailer and they have a gross margin advantage that will be tough to overcome. They also have a supply chain advantage as they can produce based on POS data and have the right product on the store shelf earlier then our industry which leads to lower carrying costs and quicker turns. Also like Zara, H and M and now American Apparel they can have refreshed product on a weekly basis which we cannot do even though we stagnate ship dates. This leads to consumers going to the stores more often as they will see new product. This creates the compliance gaining tactic of scarcity to come into the picture which drives sales and more frequent visits. Not to mention they have the prime real estate to drive traffic and drive sales and their value proposition at times is far superior to Pac Sun due to their divergent strategies.
I agree in that Hollister is not a benefit to our industry as a whole as they do not give back however it took Pac Sun a while to figure this out.
October 3rd, 2008 at 8:16 am
Do you even want that customer to be associated with your product? I don’t. The fact that they are not wearing your logo/clothing, is the main reason why your logo/clothing is cool. For something to be cool, something has to be uncool. Sure we (as an industry, or a brand) could go after the customer but really isn’t that the definition of selling out? Doing something that you know is not cool, just so you can make money?
Further what happens to the industry when that customer decides that MMA is the new cool thing? That customer is not a surfer they are just following a trend. Trends change, and if all the brands just follow the trends, What will be left?
October 3rd, 2008 at 8:22 am
Let’s take a step back, one of the main reasons Hollister is in this position is because of the unmatched investment and lack of competition. Pac Sun & Zumiez can’t really compeat because there name and image sucks! (There so bad they need to do all there private label merch under different names) Our industry from brands to retailer’s have been under capitalized from the start, most of us do it for passion, not always profit. Hollister looks at it as profit and there model shows it. If any mega rich investors want to go and attack this direct to consumer market in this industry in proper fashion it could be done (with the right resources, vision, & capital) someone just needs the balls to do it!
I’m up for the challenge! Any taker’s?
October 3rd, 2008 at 9:20 am
this industry needs to wake up. IF you see an opportunity in the market, you need to take it before someone on the outside does. Maybe we dont want to serve the “trendy” or “poser” community, but someone has to sell them clothes and shoes.
When we finally wake up and sell to everyone we will allow the consumer to follow the link from the Hollister style store to the core parent company. The core company will make more money in the long run and be able to continue to support core consumers and athletes.
Anyone who is hating on Hollister should be hating on themselves for not being proactive
October 3rd, 2008 at 9:58 am
What is Hollister’s brand worth? I’m not talking about how much it would cost to buy Hollister, but what worth does it have in the eyes of the consumer? How long will the consumer stay with the brand once another also-ran comes along? In comparison to surf-brands (Rusty, Quik, Billa), I can’t see how the long-term advocate surfers are of their “own” brands parallels the “fad chasers” Hollister’s customers are. BTW- Trends are long term, fads are short term. Every brand knows it costs less to keep brand advocates than try and sell their brand to new ones- 6 times less.
I do not encourage brands to be Hollister. Just like I don’t encourage surf shops to be Wal-Mart. You’re not. Don’t try. Be true to your brand. Also, if we were to ask Hollister’s clients what they think Hollister stands for what do think they would say? “The beach”, not surfing, and then probably draw a blank. And there is no way you’re going to stop people from liking the beach. Take care of your own clients, let Hollister worry about themselves.
October 3rd, 2008 at 10:37 am
Okay…first of all Hollister is successful because they’ve invested their resources in 1) researching the market/their customer and 2) building an engaging, dynamic retail environment. Say what you will about it not being “core” or whatever…the stores deliver a unique buying experience for the customer and it’s pretty clear the formula is working. Not to mention, when those mall doors close, employees are there–in some cases until 2am–making sure that retail space is dialed in…down to the spacing between close hangers on every rack. It?s a totally different buying experience when compared to your local surf/skate shop.
Second, Hollister has a ton of competition–American Eagle, Abercrombie, GAP, Old Navy to name a few–just few are listening as closely to their customer. This, in my opinion, is the biggest lesson to be learned. You want to win the war???? LISTEN to your customer, adapt methods from other successful retailers (regardless if they?re ?sell outs?) and stop thinking your brand is too cool to look beyond the industry for help, guidance and inspiration.
Third, this thinking of, ?if they shop at Hollister we don?t want them anyway? mentality is exactly the kind of arrogance that gets many retailers into trouble. You can still stay ?core? by modeling your strategy after successful ?non-core? retailers.
And finally?.really??? Most of you do this for passion, not always profit? Give me the name of one company that enters the market because they’re passionate about putting clothes on the backs of kids…..for free. You go into business to make money and you?re not around very long if don?t.
October 3rd, 2008 at 12:24 pm
Nobody is telling anyone to “become” Hollister. Rather, look at what they’re doing, figure out why their formula is successful and then adopt similar strategies. Bottom line…we’re all selling a similar product; shirts, shorts, hats, etc.
“Take care of your own clients, let Hollister worry about themselves.” Great approach. Let’s just sit on our hands while the market changes all around us. Our surf shops may fail, our brands my go under…but at least we’re not selling out. Give me a break. Get off the “industry high horse” and start making changes or you’re all gunna end up at TJMaxx next to the Ed Hardy trucker hats.
October 3rd, 2008 at 3:15 pm
I think we’re misdirecting our energy here. Is Hollister the one ruining “core” shop business? No, it’s Zumiez, Pac Sun, and companies who open their own stores who is ruining “core” business. Forget Hollister and all their tweens and their kooky mom’s. If companies weren’t so interested in chasing big box stores, giving them deep discounts, and selling out the little guy, the whole industry might be healthier, but that’s a tough argument in a tough economy.
Hollister stealing a few surfboards and trying to take our soul? hahah. it’s just window dressing, who cares, when I see people wearing Hollister wetsuits in the water I’ll be really surprised, then you can slap me on the back of the head or try to gauge the bottom of my board with your rail.
October 3rd, 2008 at 7:09 pm
money, money, money!! it`s always about that, It`s funny to live in a city where there`s no ocean and still every body wear hollister, and they think they can rip!!! and more fun that those fuckers don`t know about real surf brands!!
hollister=sellers=kooks=posers=offices rats.
I know the others brands they love to sell to, but still they are in the water!!!
October 4th, 2008 at 8:51 am
If it was only about making money, I’d be working for haines and selling tshirts to wal-mart. It has to be about passion, maybe not passion for “putting clothes on the backs of kids” but passion for what we do. Surf, skate whatever. If it wasn’t for passion this message board would not exist, and no one would care. Obviously we are all pasionate about this “industry”(or the lifestyle this industry supports). And sure business means making money, but how much money do you need? How big does your company have to be? We are surf brands, this is the surf industry. Why are we trying to sell tshirts to people who will probably never surf and have no idea? Poser companies, for poser customers. Do we really need the money that bad?
October 4th, 2008 at 9:03 am
But we do need to take care of our own clients. We dont need to pander to kids in the midwest. The clothing market is changing, not the surf market. Surf clothes were cool, then motocross clothes were cool. Now MMA clothes are cool. This is the surf industry, not the cool indusrty. Sometimes surf is cool and we can make some extra cash, great. Sometimes surf is not cool and we can only rely on our core customer. Whatever, that is what we signed up for when we started working in this industry. Ride the wave, its not gonna last for ever. That is just the way it works. And have you been to TJ MAXX? Its already full of surf stuff.
October 6th, 2008 at 9:56 am
HOLLISTER. SEX SELLS MARKETING + SURF MARKETING + GREAT QUALITY PRODUCT = MASS APPEAL.
CORE = NONE
STYLE = NONE
CONTRIBUTORS TO THE SPORT THEY SELL = NONE
BRILLIANT = NO
LUCKY = YES
CONSUMING MARKET SHARE FROM CORE SURF BRANDS = YES
LONGEVITY = MY GUESS 5 MORE YEARS, WE’LL HAVE TO WAIT AND SEE.
STILL FROM OHIO = YES.
October 6th, 2008 at 10:28 am
Everyone needs to wake up and climb our from under the “cool rock” you are all living. When we all see a so called “new” trend/direction/style in the action sports community, we instantly lay clam to it and thing its unique and ours, when in fact so much of the direction and style in action sports was taken from another industry ie fashion, hip hop, etc and we just used it as inspiration to sell to our customer and promote it through our vehicles, surf, skate, snow. Yes, there are a few exceptions to this and there have been some unique styles and direction that have come 100% from action sports, but there have been the majority that we all have borrowed from other industries and made our own, just like the poeple at Hollister and other companies have done and we can’t seem to stand it. Spend some time coming up with new ideas instead of bitching about somehting you do yourself!!
October 6th, 2008 at 8:51 pm
In surf, skate, snow, we were too cool for our own good.
A&F made some smart decisions jumping into surf. Other lifestyle activities… MLB, NFL, etc, have zero issue selling gear to people who don’t play baseball or actually drive a race car. For a long time action sports did and now we’re letting other guys take our customers…. but only if we want people who don’t participate as customers. Fans some people call them.
Does everyone who wears a Tap Out shirt get in an Octagon?
If the industry (man, I was so tempted to use quotes there) wants to, it can take back the Hollister customer, but it’s going to take work and strategic decision making.
Help customers differentiate authentic from fake. Would anyone wear a baseball t-shirt from a fictional team?
Make action sports more approachable. Little league and Pop Warner are breeding grounds for future fans. Surf/skate/freestyle flower growing doesn’t need to go that far, but consider ways to make it easier for Mr & Mrs Smith to accept their kid is choosing skateboarding over lacrosse… or wants to do both.
Lastly, step up in retail. When I worked in NYC, I went into a pretty big local chain to buy grip for a new board. I had a corporate gig at the time, tie, slacks, etc. As I was checking the wall of completes (for no reason other than to kill time), he offered to sell me a board at a discount “because it was scratched,” I’d guess because of how I was dressed. The same thing happened in San Diego at another chain, where I was offered a tapered snowboard “for guys like me.” Both times this happened without even asking me a single question about how I ride, if I ride, if I was getting back into…
There’s a lot we can do if we want to take back the customers Abercrombie created. We just have to own up and do it.
October 7th, 2008 at 11:30 am
Good point, I never looked at it like that. I hate it when I go into a shop and don’t see anything I like and when I go back in a month or so I see the same crap but only less of it. Then I never want to go back.
October 8th, 2008 at 10:27 am
I wouldn’t say you’re wrong. My point is just that if your business is interested in any of those customers that Hollister has, it might make sense to figure out what they did right- whether you hate them or love them.
October 8th, 2008 at 10:29 am
For all I know, Hollister may not do anything in the sense that other retailers do. But whatever they are doing, or not doing, at the moment the customers seem to like it. Just because we who are close to the industry think that’s important doesn’t mean Hollister’s customers do.
October 8th, 2008 at 10:31 am
Hey, that’s pretty well said. Somebody at Transworld Business sign this person up for a column. Uh, but not instead of mine of course.
October 8th, 2008 at 10:33 am
Hollister does indeed get serious advantages by being part of Abercrombie & Fitch.
October 8th, 2008 at 10:40 am
As a retailer or a brand you may want the Hollister type customer or you may not. You may want to give up some sales to stay “cool.” It seems to me that each business has to make it’s own decisions about who it’s customer is or should be and why they want or don’t want that customer which I think is what you’re saying. But please don’t approach it as being or not being cool and selling or not selling out. That kind of generic oversimplication won’t help you figure out how to compete.
November 19th, 2009 at 10:29 pm
AberCrombie and the other major chains started getting stale. Everyone wants something new that's cooler than their old stuff, or your old stuff for that matter. Hollister had an interesting look with a beautiful interior. People enjoyed going in and enjoyed buying the clothes they found there. For a few hours that they were shopping they were in a different place. They felt like different people. Combine clothes shopping with escapism and you have what you need.