Have RadioShack, J C Penney and American Eagle Outfitters Lost Touch With The American Consumer?

During the 2014 Super Bowl, RadioShack Corporation (NYSE:RSH) was featured in a commercial that poked fun at its reputation as a company that had long since moved past its better days. Connecting the Houston-based electronics company’s brand with washed-up icons like Hulk Hogan and Alf, the store tried to send the message that it was saying goodbye to the 1980’s. For the embattled company, however, finding a niche in the modern day has been difficult.
 
Not only has RadioShack been harmed by the popularity of stores like Wal-Mart and Best Buy, but more consumers are now purchasing electronic items online. In an effort to differentiate itself from stores offering similar items, the company has initiated plans to implement same-day mobile repair services at its stores, which would help the electronics retailer to develop long-lasting relationships with its consumer base. Nevertheless, RadioShack could soon be facing bankruptcy and desperately needs a cash infusion from investor Standard General.
 
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If RadioShack is trying to move itself out of the 1980s, then J C Penney Company Inc (NYSE:JCP) must also move past its earlier glory days. The company, which saw its values peak during the 2000s, has been on the decline since 2007 and truly began to see its values plummet to new lows during the global economic crisis.
 
The store’s brand suffers from being slightly more upscale than a department store like Sears, but less high-end than stores like Saks Fifth Avenue and Nordstrom. JCPenney is not able to tap into the thrifty, deal-hunting consumer base, nor is it able to attract the more exuberant shopper that cares not for low prices. The Texas-based company is somewhere in the middle, unable to carve out a niche in the market.
 
It could be that JCPenney’s shopper base, the middle-class customer that cares for quality but doesn’t want to break the bank, was lost during the economic crisis. The company, which has since been removed from the S&P 500 index and closed thirty-three underperforming stores in January, has attempted to rebrand itself through its “stores-within-a-store” strategy.
 
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Like RadioShack and JCPenney, American Eagle Outfitters (NYSE:AEO) is also trying to move past an outdated image that no longer appeals to its customer base. The company is known for the popularity of its brand during the 2000s, a time when young men and women would pay an additional fifteen to twenty dollars for a t-shirt with the American Eagle logo.
 
Today’s consumer base, however, is far less interested in “fitting in” or looking like everyone else. Young people are now more interested in living in a unique apartment in the city, not in one of many nearly identical houses in the suburbs. This move towards originality and individuality is reflected in in their clothing choices, or lack thereof, with brands like American Eagle and Aeropostale seen as the main targets of this cultural movement.
 
Thus, it should come as no surprise that the Pittsburgh-based fashion company has demphasized the American Eagle logo in its advertisements and t-shirt offerings. Instead, the company has begun to showcase the quality of its products and recent fashion styles. Time will tell whether American Eagle’s new strategy will appeal to young men and women around the United States.
 
What Must American Eagle Do To Reestablish Itself As A Preferred Brand For Young People? Take A Look At Our Free AEO Analysis.

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