Teen retailer American Eagle Outfitters goes mobile, revamps site

American Eagle Outfitters is looking to hook up more often with teenagers on the Internet and through their smartphones.

The South Side-based retailer is revamping its website to work better with phones, rolling out robust apps and integrating mobile sales within its physical stores to capture more business from tech-savvy teens.

Mobile offers “the flagship opportunities for almost all retailers” and the company's success in this area will define the brand, said Michael Rempell, American Eagle's COO, at the Oppenheimer Global Consumer Conference in Boston on Wednesday.

“We want mobile and we want digital in general to be the best expression of our brand,” Rempell said. “The most complete expression of where you can see our best assortment, where you can get the best view of our lifestyles and where our customers can have the best shopping experience.”

The teen retailer is following a trend among the younger crowd. Millennials, who grew in the digital age, are opting to do more of their shopping online and through their smart phones, cutting back on their visits to physical stores and shopping malls.

Retail sales are poised to grow 4.1 percent this year, according to the National Retail Federation, which doesn't have a comparison of online growth versus shopping at physical stores. But other evidence suggests digital channels are pulling an increasing share of traffic.

Retail sales through smart phones increased 87 percent last year from 2013 and sales via tablets grew 52 percent, according to Forrester Research.

“It's one of the few growth opportunities, frankly, that are out there,” said Eric Beder, an analyst at Wunderlich Securities in New York, noting that mobile is an increasingly important sales channel for the reeling, teen retail industry.

Mall-based teen retailers have struggled to adapt to fickle consumer tastes and changing habits, as its teenagers spend more time buried in their phones than browsing the latest styles in stores. Some companies have gone bankrupt and others have seen profits dwindle amid tight competition for customers. Just this month, Gap announced that it was closing 175 stores.

American Eagle has emerged better than many competitors, posting a 7 percent increase in same store sales in the first quarter. But it still has struggled to attract shoppers. The company is in the midst of closing 150 locations to “rationalize” its fleet, said CFO Mary Boland.

Meanwhile, the company has shifted focus to digital sales by offering more functions and frequent updates to its mobile app. Mobile app sales have doubled in the past year, Rempell said.

Last week, the company started a reserve service through its mobile app, in which customers can click a button and have an item held at a store for 24 hours until they can get there. The service is still being piloted, but will be rolled out more expansively by the end of the year.

“I'm optimistic that it's going to be a big deal for the company,” Rempell said.

Mobile devices also are gaining a stronger presence inside stores. By the end of the year, sales staff will carry iPads. If a customer can't find what they want, the salesperson can order the item from the floor and have it shipped to the customer's home. In the past, customers had to go to the check out register for that service.

“If we have that size or that style anywhere in the company, we'll be able to service that customer and close that sale,” Rempell said.

Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or cfleisher@tribweb.com.