Michael Leedy's eventual successor as chief marketing officer at American Eagle Outfitters should consider boosting the brand's digital outreach while doubling down on simple, honest messages like the acclaimed "Real" campaign for its Aerie lingerie in early 2014.
So say retail watchers in the wake of the company's announcement yesterday that Leedy would step down on Sept. 15. No reason was given for Leedy's impending exit, but the search for a new CMO is underway.
"American Eagle has managed to make a comeback with its focus on e-commerce and emotional marketing like the Aerie 'Real' campaign featuring nonphotoshopped models," said Brooke Blashill, senior vice president of The Boutique @ Ogilvy PR. "With the departure of its CMO, the brand will need to continue to build on these assets, especially as it heads into the holiday buying season."
By some estimates, 85 percent of teens start their shopping online, so "continued focus on omnichannel marketing will be critical," said Blashill. Creating campaigns that speak to young people in their own language, about fashion and body issues important to them, is paramount if AE is to maintain its hard-won momentum, she said.
Leedy earned praise during his four years as CMO for helping establish a more modern, vibrant brand for the teen-oriented clothing and accessories retailer. Following a protracted slump, the chain's fortunes have seen an upswing in recent quarters. On Wednesday, the Pittsburgh-based company reported fiscal second-quarter net income of $33.3 million and a profit of 17 cents per share, beating analysts estimates. Sales rose to a record $797 million, a 12 percent gain compared to the same frame a year ago.
"AE has done a better job than its peer-set competitors—Abercrombie & Fitch and Aéropostale—in the past couple of years" through a mix of marketing and "coward-fashion improvement," such as focusing on denim and other trendy fabrics, said Mary Brett Whitfield, a senior vice president at Kantar Retail.
American Eagle can keep climbing "if it establishes itself as a destination brand for teens, setting itself apart by a compelling brand story and promise," said Tessa Tinney, founding partner of brand consultancy at Monaco Lange, who adds, "A change in CMO is a great opportunity for a fresh new look at what the brand represents."
Leedy hired New York agency Translation last year as his lead creative resource. The shop's music-video-style back-to-school campaign for 2014, "Portraits," was generally well received.
Scott Davis, chief growth officer at Prophet, a brand consultancy, injected a note of caution about making change for change's sake. "Both the company and the incoming CMO need to be careful and pragmatic about how they move forward with the brand," he said. "The tendencies of many new CMOs is to initiate a reboot with new agencies, new campaign creative and new media. But since America Eagle is experiencing so much success right now, I would advise that they resist that temptation."
So, what's his advice for Leedy's successor?
"When a company is doing a well, the CMO has the ability to focus on the growth strategy, as opposed to spending all their time trying to fix what's broken," Davis said. "Companies such as Coke and Allstate have been able to successfully transition between CMOs because they stuck with what was working and didn't change the ad or media strategy. Instead, they focused on innovative strategies that can support growth for the brand—not just for the next quarter but in the long term."