Aerie final book

Professor Grace Canepa Non-Traditonal Retailing 415 Whitney Dore, Amanda Liffers, Burke Price, Janis McKenzie Shane

Table of Contents I. Company Overview II. Current Target Consumer III. Omni-Channel Audit IV. The Initiative V. Market Analysis VI. Proposed Target Consumer VII. Communications and Promotional Plan VIII. Financial Plan IX. Conclusion X. Appendix

Company Overview

I.

History 1977:American Eagle Outfitters was founded in Pittsburgh, PA by the Silverman Brothers; beginning as an active-wear apparel company.

1992: American Eagle Outfitters was repositioned to focus on private label, casual apparel.

1993: The company went Public on the New York Stock Exchange 1998: American Eagle Outfitters launched an E-Commerce website 2000: American Eagle Outfitters moved into the Canadian Market, marking the first international expansion.

2006: Aerie was founded as the first Sub-Label.

2010: American Eagle Outfitters expanded into the Asian Market 2014: The #aeriereal campaign began which marked on of the first companies to stop retouching models in advertisements.

Mission

Honest.

Fun. Relaxed.

Sexy.

Natural.

Strong.

Real.

Aerie is bras, undies, swim, and so much more. We are committed to making girls of all sizes feel good about their real selves.

Current Ownership In 1994, American Eagle Outfitters went public with 167 chain retail stores and 9 outlet locations in 34 different states. Formerly the company had been owned by the Silverman Brothers and then sold to the Schottenstein Family. Today, 26 percent of the company’s stock is owned by the Schottenstein family. Jay L. Schottenstein is the current CEO of American Eagle

Current Revenue Aerie is 9% of American Eagle’s total sales For the first quarter of fiscal 2016, Aerie's sales increased by 23% American Eagle annual revenue for 2016: $3,282,900,000 Aerie estimated annual revenue for 2016: $295,461,000

Future Growth Plans Aerie is planning on expanding their brick and mortar stores both domestically and internationally. Specific areas of focus will be South America and Mexico. Aerie also plans on the continuation of #Aeriereal campaigns.

SWOT S

W The Brand has a strong social media presence Lots of selection within products offered

Aerie has a great understanding of their target customer

Under-performing stores within portfolio need to be addressed Consistent promotions train customers to only purchase items on sale, never buy at full price

Open up to more demographics (Men, older female consumer)

Increase in niche lingerie brands coming to market

Increase active products offered

Well known brands with a strong customer base, such as Victoria's Secret

Expand further into international markets

O

Quality Control of products

Other companies also capitalizing on the “Real,� no retouching campaigns

T

Price Matrix

Current Placement

Aerie operates on a Direct to Consumer model.

They have 88 Aerie side-by-side with American Eagle Outfitters locations. There are also 102 Aerie stand alone stores.

E-Commerce accounts for 30% of the total sales for Aerie.

The American Eagle/Aerie App has a POS By the end of 2016, there were 176 internationally licensed stores.

CRM Activities

Credit Card American Eagle and Aerie offer a store credit card and also a Visa credit card. These cards also double as rewards cards. The customer can earn discounts and promotions just for card holders.

Rewards Card American Eagle and Aerie also offer a rewards card. This enables the customer to earn points towards coupons.

Monthly Direct Mailer The monthly Mailer gets sent to the addresses of the customers who are brand rewards and credit cards holders. These have coupons included and also inform the customer of upcoming sales

Daily E-Mail Blasts Daily E-Mail blasts are sent out to customers who are on the e-mail list, have a rewards card, or have a credit card. The e-mails inform the customers of sales or new merchandise.

Advertising "We left beauty marks; we left tattoos — what you see is really what you get with our campaign"

American Eagle spent $104.1 million in fiscal 2016 on advertising Social Media, Internet Ads, and In-Store Marketing are the main forms of advertisements that Aerie uses The Hashtag Campaign, #aeriereal, has been hugely successful for brand and has gotten a lot of media attention for its unretouched photographs

Current Target Customer

II.

Demographics and Psychographics

The Aerie customer is technologically savvy. They tend to fall into the Early Majority.

They are opened minded when it comes to their beliefs. Social Media use is daily and takes place on multiple platforms. They hop online and in stores and have an overall active lifestyle.

The Aerie customer is a women. She falls between the ages of 15-24 and is likely a student. She makes $30,000 or less a year.

Customer Profile

Lucy Grippo 19 years old Attends UNC Chapel Hill for English Wants to become a Middle School Teacher Sometimes shops online but prefers to try clothes on Training for her first marathon Favorite food is Hawaiian Pizza Wants cute, affordable underwear that is not overly sexy but is not boring

Omni-Channel Audit

III.

Aerie Aerie has a strong omni-channel presence. In terms of Social Media, Facebook and Instagram are their most powerful platforms. Facebook has the most followers while Instagram has the strongest content. The content on all of their social media accounts is a mix of original material and also customer submitted material. This allows the customer to feel further connected to the brand. Aerie also does a fantastic job with their Youtube account. They consistently post original and unique videos on fashion, lifestyle, and body positivity. An opportunity Aerie has is pertain to their website. Since they are a label of American Eagle, Aerie is simply a tab on the American Eagle e-commerce site. It would be more powerful to the consumer if they had a separate home with easily navigable links between the sites. The Aerie Brick and Mortar stores went through a remodel in 2014. The stores are very clean with modern, minimal lighting and light wooden fixtures. It allows the often saturated product to be the focus of the store environment.

Facebook | 1,794,930 Twitter | 105,000 Instagram | 686,000 Pinterest | 33,900 Youtube | 8,337 Snapchat | Yes Tumblr | Yes

Competition Victoria’s Secrets’ Pink has an approach to social media that is focused on their target customer and they feature content that shows their typical “college girl.” Their social media pages are very uniform and post the same content across platforms. This could hinder customers from following the brand on all of their platforms. Their Facebook is their most popular platform and they are very active in the comments because this is the main place where people use feedback. Their Twitter posts could be stronger, because they mainly just post the same photos as their other platforms. Twitter offers a good opportunity for them to create posts that help their customers better identify with the brand.

Instagram is their second most popular platform. The Brick and Mortar store is very saturated with color and branding, giving the store a very youthful environment. The e-commerce site is similar.

Free People’s approaches social media with their customer in mind. The brand’s most popular platform is Instagram. This where they attract more of the followers with their curated content. Free People’s content across all social media platforms similar in style but the posts are unique to each platform. This entices the customer to follow Free People on multiple platforms. Free People has done a great job of capitalizing on Pinterest, a platform that is largely ignored by many retailers. Their Brick and Mortar environment is in-store is just as engaging as their online content and is curated just as well. Both reflect the current collections and the featured theme of the season.

The Initiative

IV.

Aerie would like to use 3D body scanning in order to create bespoke bras for women.

This will help expand Aerie’s target consumer base by attracting customers who are looking for a custom fit bra at an affordable price.

Almost 75% of women are wearing the incorrect bra size. This results in symptoms such as back pains and also back problems. For an item of apparel that is worn everyday by a almost all woman, this is a severe problem and needs to be addressed.

The Technology The technology that will be driving the initiative is 3D body scanning. The company that we will be using for our body scanning technology is called Size Stream. This company has created technology that is able to scan the body and produce exact measurements of the person that it is scanning. The system then produces a 3D avatar of the person to allow for a better view of their measurements. The size info that is gathered from the machine will then connect with Aerie’s database of sizes for their product pieces. Size stream will be able to display, based on the sizes of the scan, which sizes the customer will need for each piece of the bra.

Operations We would like to create custom bras for the aerie customer.

Bespoke bras have never been made on a mass scale before. In order to execute this initiative, we will need body scanners and also a sewing workshop in order to create the bras.

There will be deconstructed pieces of existing Aerie bras styles of varying shapes and sizes. Individual bands, cups, straps, and clasps will all be available in an array of sizes. Three colors will be offered: white, black, and grey.

The customer will step into the SizeStream booth and have their figure scanned. An attendant will be monitoring the computer system. They will then analyze the measurements and collect the individual pieces that will construct the custom bra size for the customer. Next the attendant will bring the pieces of the bra to the seamstresses where they will assemble the bra on location. This gives the customer the opportunity to watch.

Because the experimental nature of this initiative we are going to first create a pilot pop up shop. This will allow the opportunity for any problems that need to be worked out before it is initially implemented into flagship locations. Aerie has a semi-permanent location in SOHO, New York that will house our initiative. We will reconstruct a section of the store for our scanners and our workshop.

There will be ten employees who will be trained for the initiative.

Four of the employees will be trained to work the scanners and six will be trained to create the bras. They will be scheduled based upon the demand.

Our plan for integrating this new technology into our stores is to first start with placing it in the Aerie New York pop up shop. Because this is a long term pop up, there will be no added costs. The initiative will be in the pop up for a month. After that it will enter a revision phase, and then will be placed into two existing Aerie stores. The first of these two stores will be the flagship store in Times Square and also in Emeryville, California, right by San Francisco. Slowly, over the course of the next year, we will be placing our new technology into more Aerie stores across the country. We will focus on placing them not only in areas that we believe will get a lot of foot traffic, but also where we believe that the customers would be open to spending a little more to get a custom bra.

The Aerie Custom bra will retail for $74.50. The most expensive bra that is currently offered within their assortment is $49.50. The price is reasonable because pieces of existing Aerie bras are being used to create the custom one. The price also cannot be so high that the core customer will no longer be able to afford it.

Market Analysis

V.

Current Competition The current market for custom bras is very niche and there is very little competition. The competition that is out there is a much higher price point than we would like to sell our bras for. The methods used to create the custom bras are also traditional methods and do in incorporate modern technology in order to refine the process. The biggest competition that we face is called “Cupperwear,” which models itself after “Tupperware” parties. A representative travels to the destination of the party and all of the woman in attendance get measured and have a bespoke bra made for them. It cost around $250 per bra.

Future Competition If Aerie were to implement an initiative such as the one that we are proposing, it would be very easy for Victoria’s Secret to do something very similar. Other more niche retailers could also create something similar, but perhaps even a bit more boutique. Victoria’s Secret would be the most worrisome in terms of potential competition because they have the ability to implement a similar practice that would be around a similar price point. Victoria’s Secret also has a wider customer base than Aerie does which could potentially impact the market share and customer base that Aerie is hoping to gain through this practice. It would take a little bit of time for Victoria’s Secret to get a practice like this to market unless it were already in the planning stages.

Proposed Target Customer

VI.

The Aerie’s target customer is traditionally a young, female demographic, but we see the opportunity to expand that customer base that will benefit every age group of women. It will correspond seamlessly with the main Aerie campaign, #AerieReal which promotes body positivity. For Aerie stores we want to implement a 3D Body scan technology that would help girls just starting to wear bras all the way up to senior aged customers. Every woman needs a great fitting bra that is comfortable. This scanning technology will make sure that every women will have the accurate fit for their undergarments.

Proposed Demographics and Psychographics

The proposed new customer is more conservative and traditional. They are less likely to shop online, especially when it comes to bras. Their over all technology usage is less frequent and they use multiple social media platforms on a weekly basis.

They tend to fall into the late majority.

The new initiative will still target women as the main consumer. The ages of the new customer will range between 24-65 years old and the overall income will be anything above $30,000. Education levels vary. The new customer consists of adults who are looking for the correct fitting bra.

Aspen Ollie 45 Years Old Atlanta, Georgia Senior Manager at Jackson/Spalding PR Firms $100,000/year Favorite book is Slaughter House Five Loves swimming laps and being outside with her children Strives to be comfortable with her undergarments as she works long hours Uses technology to better enhance her daily life with her family Vals | Achiever

Olivia Clements 30 Years Old Berkeley, California Teaches English at Maybeck High School $55,000/year Favorite band is Iron and Wine Loves Yoga with Friends on the Weekends Enjoys Shopping in stores and online Likes to bring innovative technology into her classroom to engage students in the digital era Vals | Experiencer

Communications and Promotional Plan

VII.

Activity Report

Activity Plan by Month R&D Technology Sourcing Sourcing Materials Instalation Training Budget Product Testing Promotion Launch

Pre Launch

Pilot

May

June

July

Revisions August

Launch September

October

November

December

January

Promotional Plan

For our Aerie store initiative we have four different phases in which we are going to be conducting our promotional and communication plan. The first phase is going to be our Pre-Launch. This is going to be during the month of May. We will be making sure we connect all of our social media channels to get the word out about our new initiative and the test pilot. Our Pilot will be taking place in June. We will have one month of advertising and promotion in preparation. At this time we will be analyzing how our customers are responding to our new initiative. The third phase, which will be over the months of July through September, will be the revision period. This will be our time to fix any technological problems that may have presented during the pilot. The last phase is the implementation of the initiative into full-line stores. We will begin with two and then expand accordingly.

Financial Plan

VIII.

Financial Plan inancial Report Revenue Pro ected total revenue o selected locations Pro ect increase due to initative Total increase

Notes

Notes

NA N/A

increase NA NA

NA N/A

penses

NA N/A

ost

Notes

Technology Development Design & Installation

Scanner Shipping ees

Wages

People or the pop up and people or each o the stores during the launch into the stores People or the pop up and people or each o the stores during the launch into the stores

Promotional Activities vents

Including advertisments mailers campaigns etc Launch party or the pop up

Sta Training

or the assembly o the custom bras in store machines and surger or pop up and e tra surger or the in store launch

Se ing Machines

Any renovations that need to be made to the Soho pop up

Renovations or Pop p Total Expenses Pre Launch

inancial Report by Month Technology Development Design & Installation Sta Training Wages

Promotional Activities vents Se ing Machines and Materials Renovations Total

May

Pilot

Revisons

June $37,500

NA

July $0

August $0

Sep $0

tes

ease NA NA

Notes

$3,250,071

increase increase increase

Launch

September

October

$0

November

December

January

Total $37,500

NA

Conclusion

IX.

In conlcusion, we believe that implementing this intitative will be sucessful because of the need that is in the market for a personalized bra. Aerie is the perfect retailer to bring about this initiative because of the brand’s focus on empowering woman.

Appendix

X.

Specifications: Sensor Configuration: Four angles around the body at five different heights (20 total) Technology: Infrared Depth Sensor Mechanical Construction: Light but rigid welded aluminum extrusion Included CPU Configuration: Intel Quad Core i5, 16 gigabytes RAM, 500 gigabytes SSD Operating System: Windows 10 64-bit Operational Power Requirements: < 5A, 100-240V source supported Setup Time from Package: <<1 hour typical Booth Size (in/m): Length 57/1.4; Width 43/1.1; Height 80/2.05 Features: Color 3D scan mode Logic engine for measurement-based formulas (body shape, body composition, size selection, etc.)

Up to 5X multi-sampling scan mode (5 scans in a single acquisition pass) Auto generate water-tight mesh from raw scan data, auto generate avatar from measures Two variable height stability handholds Privacy curtain and zero square footage changing room (curtain) Multi-language support: English, French, Spanish, Japanese, Chinese, others ISO 20685 Measurement Standard Protocol Support Reposing and animation of 3D body scan avatar (.fbx format rigging) Performance Parameters: Scan time: < 4 seconds Data Processing Time: <30 seconds Circumferential Accuracy (cylinder test): < +/- 5mm Surface data density: ~ 1mmX1mm, > 2.0 million points for full body Scan Volume: 2m height by 0.95m width by 0.8 depth Automatic Extracted Measurements: > 600 data points including 3D XYZ landmarks, circumferences, lengths, surface areas, and body volume Operating Environment: Indoors, Normal Office Temperatures -The design and manufacturing facilities are located in Cary, NC in the middle of the renowned Research Triangle.

-The company is a wholly owned subsidiary of The Apparel Group, headquartered in Dallas, TX and focuses in several markets including apparel, health & fitness, medical and physiological research and 3D printing.

-The Size Stream team of Engineers and Software Developers have over 100 years of combined experience in 3D body scanning and measurement extraction technology and have become a global leader in accurate, affordable body scanning technology.

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