Here is the case study :)
Urban Outfitters Continuing Case Study
Marketing a Business
We believe to the core of our being that scarcity creates demand...
-Glen Senk, CEO of Urban Outfitters
Unlike other retailers, Urban Outfitters' marketing nearly begins and ends with the shopping experience itself. The company does little if any advertising, in print or otherwise. Nearly everything rides on producing a unique experience.
Urban Outfitters has been a consistent winner with tight marketing and storefronts that completely set it apart from other retailers. Typically a niche company finds a narrow category in the broader industry where it can outperform larger retailers. Once the consumer is singled out and approached with the right sort of attention, that consumer will respond to the brand. For Urban Outfitters, this meant understanding the psychology of a very specific group of customers and then doing something a big retailer literally could not do: be small and exclusive. But Urban Outfitters did it on a not-so-small scale and without much traditional marketing.
From the beginning, Urban Outfitters used location, the shopping experience, and a certain sense of fashion to sell to people who were somewhat counterculture and certainly not looking for conformity. Originally thought of as the "hip" college crowd, the typical Urban Outfitters' customer is looking for a sense of differentiation. By all indications, this conception was accidental; when Hayne opened his first 400 sq. ft. store, he probably had no illusions of "chipping away" at JC Penney's or Sears' market share. All the same, Hayne essentially invented a category, and discovered that his customers would be willing to pay for that differentiation. His customers not only wanted a unique shopping experience, but to come away with a special or obscure "find."
Originally, Urban Outfitters' stores were all located near colleges and universities. The location reinforced the brand image. Even when Anthropologie, an offshoot brand targeted at an older market, was introduced, the company deliberately avoided malls to keep the brands unique. Today, Urban Outfitters has stores across the U.S. and around the world but no two stores are the same. Even within the company's distinct concepts, the stores are all different. Each store is designed to be as authentic to the targeted consumer and location as possible. The London store is different from any of the New York stores, reflecting the different tastes and preferences of Londoners compared to New Yorkers. But even in New York City, the East Village store and the Soho stores are uniquely designed to reflect their specific neighborhoods. Each store has a design team that keeps the store looking different, and marketing people collaborate with product designers on the look of each store as well.
From the beginning, Urban Outfitters offered a unique shopping experience, even if the target market changed. Urban Outfitters started out selling unusual products to college students who might or might not have much money. Today Urban Outfitters sells to the upscale market, and primarily to women rather than men - 80%-20%, respectively. Research shows that women generally enjoy shopping; it has an undeniable entertainment value in and of itself. (In contrast, Richard Hayne has said, "Hell for a man is shopping for clothes on a Saturday afternoon.") If the shopping experience is unique enough, then customers will gravitate towards the better experience. The value of the product is associated with the experience of finding that product. To keep this sense of having "found" something unique and valuable, Urban Outfitters provides each store with only small quantities of any given product. Even wildly popular items are stocked in small quantities, thus reflecting what Senk meant when he said that "scarcity creates demand." Stores are also encouraged to take markdowns quickly to keep products moving and the shopping experience fresh.
The dictionary defines "fashion" as "a distinctive or peculiar ... manner or way." In light of this definition, Urban Outfitters takes an aggressive approach to fashion, particularly catering to those who see themselves as on the cutting edge. To accomplish this, product lines are broad and shallow. This means that a wide variety of products are made, but in relatively small quantities. Then those quantities are spread across multiple stores so that no one store has more than a few of any given item. In the end, customers not only get a unique shopping experience, they are confident that whatever they purchase will not quickly become ubiquitous. Equally vital is feedback from the staff. What is hot and what is not is manifestly more intuitive to the younger managers, buyers, and sales force than it is to middle-aged CEO Haynes, so he actively encourages commentary. Forward-looking research is key as well: fashion hunters prowl the streets of hip cities worldwide to divine fashion trends. But even with the occasional fashion faux pas, the shallow product lines mean that mistakes can be cleared quickly.
Urban Outfitters' success depends on creating a shopping experience unique to each location as well as a strong sense of fashion. While it might be tempting to milk each fashion hit as it comes and fill each and every store with a popular product, Urban Outfitters instead keeps it products scarce and in demand.