For your consultancy project you can choose either an organisation you work for, have worked for in the past, or any other organisation you are familiar with in. Think of your consultancy project as a pitch of an innovation to a company’s Executive Team. You are expected to outline the most important business information that stakeholders need to know when considering investing in your project.

ABERCROMBIE & FITCH CO: PRODUCT INNOVATION JOURNEY THRUOGH AGUMENTED REALITY (AR) INTEGRATION By Name Professor Course Date Executive Summary A&F is one of the most recognized fashion brands worldwide. Founded in the 1800s, A&F is a signature fashion brand that challenged the status quo and made strategic advancements to remain progressive in the modern era. However, the contemporary era has become a combination of technology, social, and economic paradigms for the global fashion industry. Evolving technologies like AR and other virtual solutions increased customer involvement with competitors, questioning the long-term viability of A&F among stakeholders. Hence, A&F will undergo adjacent product innovation through AR integration. AR integration would offer customers a pre-purchase try-on feature and interactive interface to sustain brand engagement. The communication roadmap will push the brand’s innovation in the fashion market and emphasize creating a brand community for competitive advantage. Further, A&F will maintain a strict balance between profitability and sustainability using the TBL approach to navigate its CSF in the global fashion industry. A&F anticipates generating $750 million in digital sales in FY2025 through AR integration. Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc158200788 \h 11. Introduction PAGEREF _Toc158200789 \h 32. Business Case PAGEREF _Toc158200790 \h 42.1 SMART Consultancy Objective PAGEREF _Toc158200791 \h 42.2 Stakeholder Identification PAGEREF _Toc158200792 \h 42.3 Environmental Analysis PAGEREF _Toc158200793 \h 52.3.1 Political Insights – A Hostile Situation PAGEREF _Toc158200794 \h 52.3.2 Economic Evolution – Rise of Fashion Metaverse PAGEREF _Toc158200795 \h 52.3.3 Social Structure – A Paradigm Shift towards Technology PAGEREF _Toc158200796 \h 62.3.4 Technological Breakthrough – Revenue-Generating ‘Try-On’ Feature PAGEREF _Toc158200797 \h 62.3.5 Legal Landscape – Deploying Digital Controls PAGEREF _Toc158200798 \h 72.3.6 Environmental Performance – New Sustainability Initiative PAGEREF _Toc158200799 \h 72.3.7 Micro Analysis – Corporate Transformations and Financial Insights PAGEREF _Toc158200800 \h 82.3.8 Risk Analysis PAGEREF _Toc158200801 \h 83. Marketing Plan PAGEREF _Toc158200802 \h 93.1 Objectives & Key Results (OKR) PAGEREF _Toc158200803 \h 93.2 Marketing Mix PAGEREF _Toc158200804 \h 93.2.1 Product Strategy PAGEREF _Toc158200805 \h 93.2.2 Price Strategy PAGEREF _Toc158200806 \h 103.2.3 Promotional Strategy PAGEREF _Toc158200807 \h 103.2.4 Place or Distribution Strategy PAGEREF _Toc158200808 \h 113.3 Segmentation, Targeting & Positioning (STP) Strategies PAGEREF _Toc158200809 \h 113.4 Critical Success Factors (CSF) PAGEREF _Toc158200810 \h 123.5 Communication Plan PAGEREF _Toc158200811 \h 133.6 Marketing Metrics PAGEREF _Toc158200812 \h 144. Conclusion PAGEREF _Toc158200813 \h 14References PAGEREF _Toc158200814 \h 15Appendices PAGEREF _Toc158200815 \h 18 1. Introduction The global fashion industry is becoming more competitive due to macro environment shifts. Brands operating worldwide would embrace the changes and maintain their industrial position during competitive tendencies. According to Xue et al. (2023), ‘Augmented Reality (AR)’ is a robust product innovation in the global fashion industry, influencing purchasing behaviours and attitudes of customers toward fashion brands. AR allows brands to strengthen customer engagement and integrate sustainability into the business model. Generation Z (Gen-Z) shoppers could secure a pre-purchase experience by using AR while buying products throughout the Omnichannel (Xue et al. 2023). Abercrombie & Fitch Co (A&F) is a leading fashion brand operating globally in diverse markets. A&F uses Omnichannel to distribute and sell various apparel, footwear, and accessories for different customer segments, fulfilling Gen-Z customers’ dynamic fashion and lifestyle needs. The company was founded in 1892 by David Abercrombie as a high-street fashion retailer with a focused market space. However, A&F underwent a series of operational transformations, business model developments, market diversifications, and product innovations to become one of the largest fashion groups worldwide. A&F has a robust business network, which includes 25,000 associates to support the brand’s digital space and 750+ physical stores. A&F has three corporate facilities in London, Shanghai, and Columbus, representing the brand’s geographical dominance in European, North American, and Southeast Asian regions (A&F 2024). Table 1 in the Appendices indicates the product innovation A&F would embrace to sustain brand relevance among Gen-Z customers. A&F would improve the retail experience by integrating AR solutions. A&F will use ‘Adjacent Innovation’ principles to exploit the emerging opportunity in the global business environment while integrating AR solutions in the servicescape through smartphone applications. A&F is an experienced and financially sound brand that embraces product innovation and improves shopping experiences for Gen-Z customers. 2. Business Case 2.1 SMART Consultancy Objective A&F is recommended to use the SMART principle to formulate a sustainable objective while undergoing product innovation and making servicescape robust for the customer base. The SMART principle makes objectives specific, measurable, achievable, realistic, and time-bound for companies and individuals. The SMART principle measures the challenges and opportunities emerging in the micro and macro business environments before formulating a progressive goal for an organization to achieve sustainability (Awwad & Lafi 2023). A&F’s C-Suite Board would use the SMART principle to embrace adjacent product innovation and maintain competitiveness in the global fashion industry. The proposed objective for the board is as follows: “A&F will introduce AR technology in smartphone applications to increase existing customer engagement by 50% and generate $750 million global revenue until FY2025.” 2.2 Stakeholder Identification Stakeholder identification is a strategic prospect for a brand to increase vigilance toward micro and macro environments. Brands identify stakeholders to measure influences, interests, and interventions from counterparties that could support or halt ongoing business strategies in the long run (Park et al. 2022). The internal stakeholder portfolio includes individuals and companies directly interested in brand actions. The segment consists of employees, customers, investors, suppliers, business associates, and vendors who directly engage in the brand’s operational functions. On the contrary, the external stakeholders indirectly influence the brand’s operational roadmap. The portfolio includes competitors, regulatory bodies, legislation, activists, and societal representatives. A&F must align the interests and influences of both segments to remain sustainable while pursuing its long-term objectives. 2.3 Environmental Analysis 2.3.1 Political Insights – A Hostile Situation Reuters (2024) confirmed that the geopolitical exchanges between China and the United States of America (US) are unfriendly due to recent conflicts and accusations. China specializes in manufacturing technology solutions and equipment at affordable prices. Most European, Southeast Asian, and Middle Eastern countries acquire technologies from China with cost-effectiveness. However, the political ties between the US and China prevent such international trade. Instead, the Federal Bureau of Investigation (FBI) confirmed that China’s technological equipment is spying on American communication systems, raising concerns about national security (Reuters 2024). Hence, A&F could experience poor cost efficacy while integrating AR since China is an unfriendly trading partner for the US. 2.3.2 Economic Evolution – Rise of Fashion Metaverse The global fashion industry has evolved into Metaverse for modern shoppers, offering convenience, pre-purchase product experience, and brand interaction. CMI’s (2023) market report confirms that the Metaverse retail will grow at 12.4% CAGR annually until FY2032. The market size is anticipated to reach $9.9 billion due to modern shoppers’ robust acceptance of Metaverse. Large-scale luxury brands like ZARA, Dior, Versace, and Nike dominate the Metaverse experience to maintain control of industrial market share. The luxury fashion labels push products among Gen-Z customers to extract lucrative revenue (CMI 2023). A&F must embrace product innovation by integrating AR features in the smartphone application to offer a similar proposition and maintain brand relevance among Gen-Z customers while competing with luxury labels. 2.3.3 Social Structure – A Paradigm Shift towards Technology The social landscape exhibited a paradigm shift in the global fashion industry. Statistical insights confirm that 40% of Gen-Z customers know about virtual experiences and transformations while purchasing fashion products. Gen-Z customers are familiar with the AR feature, allowing them to maintain brand engagement throughout a fiscal period. Luxury labels also indulge in continuous technological improvements to maintain relevance with the social structure. Gen-Z customers also support retention with virtual-oriented brands by repeatedly purchasing (Sabanoglu 2023). Considering the rising demand among Gen-Z customers, A&F must redirect its product innovation efforts to AR integration to improve market presence. AR technology influences the purchase decision, improves brand interaction with customers, and fosters a sustainable relationship throughout the purchase journey. 2.3.4 Technological Breakthrough – Revenue-Generating ‘Try-On’ Feature McDowell (2021) explored the technological functions in the global fashion industry, reporting a significant influence on brand relevance and customer’s purchase decision. The report suggests that virtual technologies like AR offer a ‘try-on’ feature, which comforts customers to make repeated and unplanned purchases. Customers could scroll through the product portfolio, virtually try the fashion relevance, and make satisfactory purchases. Virtual propositions through AR integration allowed brands to generate frequent sales and attract more footfalls throughout the Omnichannel. As a result, luxury brands shifted focus toward technology more than marketing efforts to achieve profitability breakthroughs (McDowell 2021). A&F should consider the emerging opportunity and embrace virtual orientation to secure higher market share while competing with giants like ZARA, Nike, and other luxury labels. 2.3.5 Legal Landscape – Deploying Digital Controls Nonetheless, the technological advancements made regulatory bodies and legislation proactive in deploying monitoring controls. Legislative bodies are concerned abou...