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American Eagle (AEO) Reinvents Flagship Stores' Experience

Zacks Equity Research

After leaving a mark with the success of its Aerie brand, American Eagle Outfitters Inc. AEO seems to have pulled up its socks to accelerate growth at flagship stores across the nation. As part of its ongoing actions to revamp the American Eagle brand, the company launched interactive fitting rooms at its flagship stores across the United States. This innovation is receiving a positive response at NRF 2019 Retail’s Big Show this week.

Initially launched at stores in Boston, Las Vegas and San Francisco, these fitting rooms are equipped with an interactive kiosk from Aila Technologies. This custom-built software enables customers to easily scan items on a sleek, iOS-based device. Additionally, shoppers can search and request for another available size or style in the store, track the running total of items in their carts, get product recommendations — all without stepping out of the fitting rooms.

Importantly, this technology addresses several concerns — including device security, loss prevention, customer privacy and ease of integration. This tool also helps store associates to better serve customers as they can quickly pick up items requested and deliver to the fitting rooms.

Undoubtedly, American Eagle’s partnership with Alia should go a long way in enhancing in-store experiences for customers. American Eagle expects to expand this fitting room experience to more stores in 2019.

Shares of American Eagle reacted little to the news. However, this Zacks Rank #3 (Hold) stock has surged 4.5% in the past year, against the industry’s decline of 15.2%.

 



American Eagle has consistently been doing a good job to evolve with customers’ changing needs to enhance their experience. The company remains committed to adopting technological advancements such has Alia’s interactive kiosk to stay competitive in the evolving retail landscape. Notably, a winning marketing strategy in retail is providing the best combination of digital and physical store experiences.

Living up to this theme, American Eagle has been investing in omni-channel capabilities, which led both store and digital channels to deliver solid sales in third-quarter fiscal 2018. Digital business contributed about 27% to sales while in-store comparable store sales (comps) improved 6%. This was the company’s 15th straight quarter of double-digit e-commerce growth and fourth consecutive quarter of positive in-store comps.

Three Apparel & Shoes Stocks You Can’t Miss

Some better-ranked stocks in the same industry are Abercrombie & Fitch Company ANF, DSW, Inc. DSW and Shoe Carnival, Inc. SCVL, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Abercrombie & Fitch has gained 4.5% in the past three months. The company has long-term earnings growth rate of 12.5%.

DSW has a long-term earnings growth rate of 9%. Further, the stock has rallied 23.1% in the past year.

Shoe Carnival stock surged nearly 50.6% in the past year. Moreover, the company delivered average positive earnings surprise of 31.4% in the trailing four quarters.

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