Anthropologie: Deepening Its Connection to Its Customers
Under the leadership of Tricia Smith, global chief executive officer of Anthropologie Group, the Philadelphia, Pennsylvania-based retailer is firing on all cylinders.
Anthropologie has successfully navigated through three decades of innovation and has managed to grow and stay relevant. The brand, which opened its first store in 1992 in Wayne, Pennsylvania, from a converted auto body shop, was founded on creativity, community and creating a sense of discovery for its customers. In fact, Anthropologie was an experiential brand before anyone ever even used that term.
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In a conversation with James Fallon, editorial director of WWD, Smith said their direct-to-consumer channel (web, catalogue and app) is a substantial proportion of their total business, penetrating at more than 40 percent. The brand operates more than 230 stores around the world and is the largest division of Urban Outfitters Inc. In Europe alone, the business operates 22 stores, primarily located in the U.K., in Central London, with two stores in Paris and one in Amsterdam.
She said when the business thinks about the next 30 years, it considers, “How do we create that same sense of discovery, and that same feeling, and that same inspiration through creativity that got us to this point?”
Anthropologie’s teams work out of the same building in a Navy shipyard in Philadelphia. They’re sewing, they’re building visual prototype sets, and they’re sitting right across from her office.
“That celebration of creativity, it’s real….It’s part of what drew me to the brand,” Smith said. She added many of their team members have been with the brand from the early days. Anthropologie also recently published a book with Rizzoli about its 30th anniversary.
Anthropologie is working to strike the right balancing of ensuring it protects the experience for loyal customers while thinking about how that experience might change for a new generation of customers. “That’s always a challenge, but I think it’s a fun one. And we’re making a lot of progress in that, particularly within the last couple of years,” she said.
While Anthropologie started with fashion, the brand has been moving more into furniture, and the AnthroLiving home business has now grown beyond the size of the apparel business on the company’s direct-to-consumer channel. Anthropologie also has partnerships and collaborations with ceramicists, artists, interior designers, “so that there’s constantly always a story evolving, and there’s that sense of discovery,” she said.
She noted that during the pandemic, while a lot of stores were closed, “our home business was explosive and continues to be. Almost 90 percent of the business is online,” she said.
The BHLDN wedding concept is doing well, too, she said, as weddings resume after a pandemic slump.
There’s also Terrain, the outdoor home and garden sister company. The business mostly has stores in Pennsylvania, “so I’m not sure very many people have been to one, but there’s an incredible farm-to-table restaurant, where they really created an incredible experience of discovery of a true kind of nature garden,” she said.
While it’s a separately operated company, Anthropologie sells Terrain product on its website. The brand does almost half its digital business on anthropologie.com, but the retail shopping experience is independent, unlike BHLDN where it’s part of the Anthropologie stores. The BHLDN locations at Anthropologie can take care of many needs for brides and bridal parties and help acquire customers.
The company will begin opening Terrain stores along the East Coast before working their way across the rest of the country, Smith said.
When Smith joined the company as CEO in April 2021 after 26 years with Nordstrom, she got the senior leadership team together to discuss the values of the brand. She also gathered longtime employees and newer ones, to allow workers to co-create the brand going forward, she said.
She said the 30th year anniversary has also helped, and the visual team did an event at the New York Academy of Art in celebration of the milestone.
“It was an interesting time for me coming into the brand midway through the pandemic,” she said. “I think one of the things is how do we now take all the rigor applied to our digital channels, the entire organization — we have 350 employees who have been focused on the digital channel for the last couple of years — how do we make sure we invest in the store experience and the digital experience and continue the success we’ve had on digital? We made a deliberate decision that magic that happens comes to life in our stores, we didn’t want that watered down when customers were ready to return to stores. We invested in that and prioritized that,” she said.
She said she wanted to make sure their teams were ready to welcome customers back to the stores, and that customers are enjoying their time there.
In order to translate those values onto computer screens, the company’s creative teams work to craft a sense of discovery that comes through in every image, e-mail and home page in a way that inspires customers, Smith said.
“That’s been the challenge, but it’s the fun part too,” she said.
Now that the customer has occasions to shop for and return to office, the company is seeing significant growth through fashion and apparel both in store and online. She said it’s no secret that the apparel business, which is the core of the business, can be a bit cyclical, but the company’s marketing team is doing hyper-targeted campaigns to younger customers who haven’t shopped Anthropologie before, “and the results have been remarkable.”
Known originally for its bohemian-chic style, Anthropologie has grown into a complete lifestyle brand. It has done designer collaborations with Amber Lewis, Mark Sikes, House of Hackney, Christiane Lemieux and Ilse Crawford.
Smith said the U.K. buying teams partner closely with the U.S. teams and the assortment includes styles sold in the U.S., as well as some that are exclusively U.K.-based and thus regionally relevant.
In stores, about 60 percent is its own designed product, and 40 percent is U.S. brands for the North American stores and site, while for the U.K., about half the merchandise is U.K.-sourced.
During the question-and-answer period, Smith was asked about the age of their core customer. She said the brand initially targeted a mid-30s customer who was established in their lives. “As we launched new categories, we continued to engage with younger customers,” she said, including with the home category.
“As we were thinking through how to come through post-pandemic and thinking about economic impacts on customers, I think it is around that sense of discovery and not underestimating that customer’s appetite for something that feels new and inspirational.…What creates the whimsy? What’s the smile factor? What brings joy to customers and it’s more around the unexpected. How do we make sure that real thoughtful design shows up in a way you can see yourself. That happens with the creative teams, the photography, the assets. I think our team is really proud when we’re reviewing what that looks like,” Smith said, asked about the theme that unites Anthropologie’s different areas of business.
“The thread that pulls through across all the categories is around that newness, that sense of discovery. And we made some bold choices that may or may not resonate with most customers, but I think that the theater of it, the excitement of it, the newness of it draws customers in and they appreciate that from us,” Smith said.