By Tricia McKinnon
If you are looking for a dress, or several, to wear Aritzia is a safe bet for something that is on trend yet affordable. The popular Canadian fashion retailer sees itself as an aspirational “everyday luxury” brand.“We like to be attainable to the vast majority of the population," said Aritzia’s former CEO Brian Hill "But we consider ourselves to be a luxury retailer.” Luxury has never been so affordable since shopping at Aritzia won’t break the bank.
The Canadian retailer started from humble beginnings first starting off inside of the Hill’s family department store in Vancouver. Then Aritzia opened its first standalone store in Vancouver in 1984. Nearly 40 years after opening that first store Aritzia passed the billion dollar mark in sales in 2022 making $1.4 billion. If you are curious about why Aritizia is so popular then consider these five elements of its strategy.
1.Make online and offline reinforce one another. One of the keys to Aritzia’s success is understanding how to capitalize on the synergies between brick and mortar and eCommerce. Aritizia has over 100 stores and sees its stores as powerful marketing vehicles that lure customers in who then either shop in-store or later online. If you have been to an Aritzia store then you will know they are artfully designed with the kind of vibe that invites you to stay for a while.
Aritzia also pairs thoughtful store design with good service.“As good as Aritzia’s e-commerce platform is, I must say that its physical stores are something special,”writesthe Motley Fool. “They draw upon the experiential factor, which is why the retailer has been such a hit among the millennial cohort. Clearly, management has invested a considerable amount in its brick-and-mortar locations. Not to take away from Aritzia’s incredible online presence, but in the post-pandemic environment, I think brick-and-mortar locations are well positioned to do some real heavy lifting.”
Hill, has had this tosayabout Aritzia’s stores, they are“fueling our famous, they’re making us famous and our e-commerce channel is facilitating a lot of these sales now.” Aritizia has proved that stores aren’t dead but play an important role, especially when a retailer’s stores have the right mix of product, design, service and square footage. As Hill has mentioned stores have contributed to Aritzia’s eCommerce success with the channel growing between 2016 and 2020 at an average annual rate of36%. Online sales are were 43.1% of Aritzia’s sales in its 2023 fiscal third quarter.
2.Leverage influencers effectively. Aritzia spends very little on digital marketing but it does invest in influencer marketing.In 2018 model Kendall Jenner posted photos of herself on her Instagram account wearing a pufferjacket from Aritzia. Those photos were seen by millions of Jenner’s followers, creating hype for the brand. Hillcalledit “an extraordinarily successful” campaign. “You’re going to get a certain amount of influence wearing your products organically, but if you really want to push something and get specific about a product, you’ll have to end up going with some paid influencers,”saidHill. In 2019, speaking about Aritzia’s approach to using influencers Hill,said: “I think we’ve done a great job with mega-influencers...and I think we still have lots of runway to go on the so-called micro-influencers. We’re working on a strategy around that now.” Since Aritzia is a Canadian company using influencers has been an effective way of boosting Aritzia’s awareness in the United States. Aritzia recently tapped popular influencer Emma Chamberlain to promote winter jackets.
Aritizia has also benefited from organic impressions when celebrities like Meghan Markle wear Aritzia’s clothing. Markle was first spotted wearing a beautiful burgundy Aritzia dress in 2017 during her first public event as Prince Harry’s girlfriend. She then wore an Aritzia trench coat in 2018. That jacket sold out insixhours after Markle was seen wearing it. That wasn’t just good fortune, if Aritzia’s clothing didn’t have an in demand aesthetic then its clothing would never have caught the attention of the celebrities that wear it.
3. Design and sell affordable on-trend merchandise. Most of Aritzia’s sales,95%, come from its own private label brands that itdesigns in house.Aritzia has around 10 of these brands including Babaton, Sunday Best, Wilfred, Tna and Super World. Havingdifferent brands allows Aritzia to target different demographics. Tna targets a younger consumer then those consumers can move on to Babaton when they are looking for career wear.
Aritzia has also opened standalone stores for its Wilfred, Babaton and Tna brands which speaks to Aritzia’s ability to create so many winning brands. Having its own brands allows Aritzia to have more control over product quality and pricing. One of the reasons Aritzia is so popular is because it is able to make on-trend items that are of a higher quality than what you can get at fast fashion retailers like Shein. But Aritzia’s clothes aren’t so expensive that mainstream consumers can’t afford to shop there. You can get a dress for as little as $30 at Aritzia. You can also get a pair of leggings at Aritzia for around $50 while a similar pair at lululemon will cost around $25 more.“Aritzia is positioned so well in the market, striking a strong balance between price and quality with clothing that appeals to a wide range of demographics,”saidJamie Murray, portfolio manager and head of research at Murray Wealth Group.
4. Conquer the United States market. Where many Canadian retailers like Tim Hortons have stumbled after entering the United States market Aritzia has found success.52%of Aritzia’s sales in the second quarter of fiscal 2023 came from the United Statesand before the end of this decadeAritizia expects to have more stores in the United States than in Canada. “Looking ahead, expansion in the United States will be a leading driver of our growth,”saidHill."We've been in the U.S. since 2007 and although we're growing every year, we've never seen growth like this,”saidHill in 2021. "There's a lot of great shopping districts and customers in the U.S. that we're not even tapping right now. We just don't see our expansion into the U.S. slowing and if anything, we see it continuing on the same pace it has. We're super excited about it." Aritzia president Jennifer Wong has also said that: “we are very well known and loved in Canada,” and now “we want to get famous in the US. It has really taken off in the last few years.”
5. Move into new categories. Aritziacontinued its expansion into menswear with its acquisition ofReigning Champ which it paid $63 million for in 2021 to acquire a 75% stake. Reigning Champ focuses on premium athletic wear for men. "Building on Aritzia's strong start to fiscal 2022, this acquisition meaningfully accelerates our product expansion into men's while bringing incremental growth to our already surging women's eCommerce and U.S. businesses,”said Hill. “Capitalizing on our world-class operational expertise and infrastructure, men's, merchandised independently, will become a meaningful part of Aritzia's platform through our Reigning Champ acquisition."
