Urban Outfitters has become a global icon and their operations were converted into upscale stores. Companies that are able to sell retail clothes at premium prices have higher profit margins. The counterculture that was built by the company occurred through many years of hard work and focus on the executive management team to build up the value of brand of the firm. One of the most amazing features of the Urban Outfitters success story is that the firm was able to achieve tremendous growth with minimal advertising and marketing budgets. Word of mouth advertising was critical to the success of the counterculture image the company built. Word of mouth advertising can be defined as the unpaid spread of a positive marketing message from person to person (Marketing-made-simple).
Big box stores such as Sears, Wal-Mart, or JC Penney could not sell merchandise identical to Urban Outfitters due to the strategic and operational approach of the companies. All large retailers pursue the same strategy of taking advantage of their buying power to achieve economies of scale in their purchasing function. Economies of scale are critical to the success of large retailers because it keeps the cost of clothes merchandise low. Urban Outfitters focuses a lot on differentiating their clothes. The company has different clothes at each of its stores due to the fact that each store is customized and designed based on the local preferences of the neighborhood.
The firm does an outstanding job of performing market research in order to satisfy the unique needs of its customers. The approach Urban Outfitters uses is to buy clothes in small quantities in order to provide a greater product variety than large retail stores that purchase in bulk. Over the years Urban Outfitters has adapted to new trends such as its customer base becoming mostly of women instead of men. About 80% of the firm’s sales are of women clothing and other accessories. The company seeks to achieve differentiation in its overall shopping experience. The shopping experience at Urban Outfitters is superior to large retail stores.