Abercrombie is making major changes to fix its biggest crisis yet

Abercrombie has been working tirelessly to transform its reputation.

Part of that transformation includes identifying who the target customer is - especially now that it has softened its frat boy image.

The company has now identified one major crisis - teens aren't hanging out in its stores anymore.

"Our customer used to hang out at the mall," Abercrombie's senior Vice President of digital and e-commerce, Bill May, said at the 2015 Shop.Org Digital Summit, via Digiday.

"Now, that's shifted to digital. It's affected both our business model and our marketing strategy."

It's true: teens - or Generation Z - does most of its shopping online, according to Piper Jaffray's semiannual report on teen spending. In Abercrombie's heyday, teens hung out at malls.

Fortunately for brands like Abercrombie, the survey noted that teens prefer to shop on websites that have actual, physical locations.

Teens also prefer to shop on their phones, Generation Z expert Nancy Nessel told Business Insider. Abercrombie is adapting to that.

"Shrinking desktop to mobile is the wrong approach," May said at the Shop.Org digital Summit, according to Digiday. "It's not enough to optimize for mobile, you have to transform for mobile."

These mobile features are similar to social media outlets that teens love, Digiday reports, including a heart feature - to indicate you "like" something - in the vein of Instagram's "like" feature.

Adapting to a digital mode is absolutely crucial, as it's one of the few ways for traditional retailers like Abercrombie & Fitch to save themselves from the dire future of shopping malls. (More than two dozen malls have shut down in the last four years, and another 60 malls are on the brink of death, The New York Times reported earlier this year, citing Green Street Advisors, a real-estate analytics firm.)

Given Abercrombie's continually plummeting sales, the retailer cannot afford to miss the boat on adapting to e-commerce.

"This is an important transformation," Digiday reports May said. "We're inviting everyone to the party, getting in every lane, and being open minded. That will enable us to drive a more relevant experience."

Abercrombie already has a lot on its plate as it fights to turn around its reputation. The brand has been long known as an exclusionary retail bully, largely thanks to its notorious former CEO, Mike Jeffries.

But so far, elements of the turnaround plan are working. The brand's latest fall collection was verified cool by Man Repeller, a popular fashion blog.