FASHION MARKETING MANUELA SACCO, ANDREA VENTURI, ELENA MUSERRA IED - ACADEMIC YEAR 18-19
EMESE BAKO YI-CHUN CHEN HELENA FAPRANZI DEBORA MENDILLO AISHWARYA NARULA
TABLE OF CONTENTS EXECUTIVE SUMMARY
5
ABOUT THE BRAND 7 MARKET ANALYSIS
23
FEASIBILITY EVALUATION
36
OBJECTIVES
39
MARKETING STRATEGY
40
ACTION PROGRAMS
44
PERFORMANCE ANALYSIS
64
REFERENCES
65
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EXECUTIVE SUMMARY American Apparel is an online fast fashion brand which was popular up until a few years ago, then it began to lose its appeal and popularity, as a consequence of inappropriate marketing and communication strategies as well as financial issues and CEO’s sexual harassment lawsuits. To build a marketing plan for AA we first analyzed the company and its market, underlining its strengths and weaknesses. We discovered that the very main concern is about communication since they are advocating and promoting positive values, but are failing in communicating them through their online channels. As a consequence, the brand lacks awareness and its image is still unclear. Moreover, its online platforms show a very low engagement rate, meaning that the audience either does not find their pages interesting or they do not even perceive the brand as valuable. For these reasons, our primary focus is to catch the attention of the target to rebuild the status of the brand. Therefore, we propose a campaign in the form of a contest in three main American colleges, (NYU, Georgetown U, and UCLA), setting up a pop-up shop directly on each campus. The aim is to share the values of AA with the students by introducing them to the ethically made collection and offering them limited edition products, as well as engaging them through an experiential event. This could also offer the students potential job opportunities for their future careers. The contest is aptly named “AA+”, recalling the American Apparel acronym and the A+ grade, which is the mark of excellence in a student’s academic performance. Through this contest, they can borrow clothes and post pictures or videos on their respective Instagram wearing the brand and expressing what the brand’s values mean to them in a creative way. The campaign takes the physical shape of a mobile pop-up truck that will later transform into a chill area. This will offer the possibility not only to experience the products first hand, perceive the real essence of the brand but also invite the students to hang out which will result in the promotion of the brand. At the end of the contest, the brand will choose a maximum of six best participants per campus who will receive rewards in the form of an internship within the company relevant to their respective fields of study and ambassadorships.
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As a result of this campaign, brand awareness will be enhanced with a strengthened online presence. Modern and traditional online and offline communication means will also be exploited in order to reach a wider audience by refreshing the brand recognition of Millenials (old target) and increasing brand awareness to Generation Z (new target). 5
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THIS IS
The company got its start in 1989 when founder Dov Charney began selling T-shirts and sweatshirts as a student at Tufts University. Charney originally called his company "American Heavy Apparel�. It was a vertically integrated company that ranked as one of the largest apparel manufacturers in North America. In 2014 after allegations of misconduct and inappropriate behaviour towards employees, the founder and CEO Dov Charney was outed by the board of directors. The long-standing reputation of Charney affected the business negatively and after three years of losing money, American Apparel filed for bankruptcy. Once in 2015 and after a short recovery once again in 2016. In January 2017, Gildan Activewear purchased AA's intellectual property in a bankruptcy auction followed by closing down all its 110 stores and laying off several thousands of its southern Californian employees. As of mid-2017, AA runs as an online-only retailer and markets itself as "Ethically Made-Sweatshop Free," with the majority of its products being made internationally.
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2.1 TIMELINE
1997
AA started producing clothes in L.A
2004
AA opened its first retail store in L.A
2006 - 08 1989
American Apparel founded by Dov Charney
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1999 Americanapparel.net went live
A.A. listed in the stock market Launched the “Legalize Gay� campaign
2011
Lawsuits filed against Charney
2016
Shuts down all 281 stores worldwide 2nd bankruptcy
2018-19
Announced opening of a flagship store in L.A E-commerce expanded to 220 countries
Take over by Gildan
2017 2014-15
Charney fired as the CEO of AA 1st bankruptcy
Relaunch of AA Online only store Positioned itself as “Ethically Made - Sweatshop Free�
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VISION American Apparel’s vision is based on the commitment of passion, innovation and ethical practices for the clothing industry. Under the new leadership, AA’s values state that it aims to be a voice for the younger generations. They are committed to delivering: high-quality products combined with art, design and technology providing continuous employee care and overcoming the limitations in the industry.
MISSION The company’s mission is to make a difference, inspire conversations within the younger generations, re-establish a respectable brand image on the market and to reconnect with the audience.
VALUES American Apparel is committed to producing high-quality products and offers employee care despite facing limitations within the industry. Their company values are all about equality, diversity, creativity, freedom, empowerment and sustainability.
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2.2 MARKET SEGMENTATION
American Apparel currently is an online retailer only brand, who focuses its business on young male and female clothing. The main purchasers are individuals who have a medium-high education, who live in metropolitan cities and who like to be fashionable but at the same time, they want to do it in a conscious way. Thus, they give great importance to sustainability and ethics, both in production and textiles. AA’s buyers are independent-minded, they are not afraid of what other people think about themselves, hence they like feeling unique. Moreover, they share contemporary and open-minded values, such as women and people empowerment, feminist ideas, gender and race equality, which are in line with the new image of the brand. Being young, AA’s purchasers like to keep up through social media, like Instagram, Snapchat and Facebook, where they can discover the new trends and the latest novelties about any issue, being it fashion, design, politics. In addition, social networks allow them to make their purchases easily and sometimes also getting discounts (subscribing to newsletters or downloading the App of a brand). Their willingness to buy is often increased through catchy and interactive contents on social platforms, through the use of good images or videos, appealing captions, which are able to get into the emotions of potential buyers transforming them into actual buyers. Finally, they consider the price-quality ratio. As a matter of fact, they are willing to spend more if they are aware of the quality or if the articles are supported by a sustainable production.
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2.3 4 P’s
PRODUCT American Apparel built its image as a retailer of casual basics on two foundations: first being famously sexy-lurid advertising and secondly committing on making all its products sweatshop-free in the US. Now owned by Gildan Activewear, the brand ironically relaunched similar products what it offered before. It offers a wide variety of products comprising of 70% womenswear, 19% menswear, 11% childrenswear and these include unisex clothing too. These contain the zip-up hoodies, 1980s inspired disco pants, knits, signature bodysuits and raglan Ts which comes in a variety of bright hues that their longtime customers are familiar with. The brand has refocused on the idea of incorporating all body types and beauty by introducing plus size clothing options. It focuses on the idea of creating clothing with being socially responsible targeting a globally aware consumer with a sense of fashion and trend. The online website offers a choice to shoppers where they can choose between identical versions (quality) of the product made in the U.S.A. or outside of the U.S.A. For example, a fleece zip hoodie that’s made in the US will cost $48 and the same product made outside the US is just $38. Gildan stated in an interview that “There are consumers that really want ‘made in the USA,’ so we’re going to cater to those consumers. But there are consumers that are seeking for price-centric offers but they love the brand, so now they can also buy the brand.” One of the big difference now in products is that the "Made in the USA" stamp, that AA was once famous for has disappeared from its new clothing. Today, the core values of their products are to be wearable, sustainable that will last beyond the general life expectancy because of the techniques and craftsmanship incorporated by the trained technicians producing each piece.
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PRICE American Apparel produces clothes for women, men and kids with prices ranging $12 for crop tanks to $120 for jackets. The products are targeted at young adults with medium income levels. The prices are slightly more expensive than one would expect for basic clothing. However, the quality of these goods is very high. For womenswear, Ts are generally between $15-$30, the popular leggings are for $30-$40, swimsuits for around $40. For menswear, Ts go for $35, hoodies for above $50 and for the kid's clothes are from $10 to $45. AA provides sweatshop-free production with incredibly high-quality products. Some may feel the clothing is overpriced but it is worth that these clothes are going to last for a long time and were made in America by well-paid workers who are receiving benefits. The brand is also now offering two versions of the same product; one made in the U.S (expensive) and the other outside of the U.S (cheaper). They are providing consumers with the choice of purchasing products made of the same quality as there are also people who are price conscious and prefers to buy goods in a cheaper price bracket. However, after the relaunch, the brand is still finding it hard to maximize sales. The company needs to realign its messaging to young adults. They are trying to nail the timing of a trend and luring Generation Z who are becoming conscious shoppers. Therefore the brand needs to better the existing strategy by incorporating profit-oriented strategies while providing products that are trendy and with the best quality.
Price Graph
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Women Tops
$16-$65
$14-$169
$30-$95
$6-$45
Jeans
$58-$78
$50-$115
$70-$160
$19-$80
Swimsuits
$35-$50
$55-$65
$45-$165
$29-$70
Tees
$18-$48
$22-$49
$15-$45
$10-$45
Hoodies
$30-$60
$65-$80
$25-$135
$21-$72
Men
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PLACE After American Apparel declared bankruptcy in October 2016 and later on it was acquired by Gildan, he decided to close down more than 200 stores all over the world. Gildan and his team re-launched AA in August 2017 focusing on selling only on its online store due to the fact that over the last 5 years shoppers have increasingly moved to online shopping. The online website is very clean and easy to access. When the brand relaunched it provided services only to the American and Canadian market. By late 2017, it launched back into the European and Asian markets and has expanded into more than 100 countries since then. This strategy allowed the brand to substantially increase sales online and its shares rose as much as 5.7% in 2018, the most in a year, despite missing analysts' first-quarter earnings forecast. Although, they are still trying to maximise their sales. In 2018, the company confirmed it would return to the retail world with its first flagship Los Angeles store after bankruptcy. However, the opening has been delayed a few times nevertheless the company still hopes to open the L.A. store as soon as possible. “It’s going to be like a test model store to see its performance and the future” quoted by Gildan. The brand wants to complement its e-commerce operations and serve as an incubator to gauge trends with the new store. In the past decades, it has become the norm amongst the majority of US apparel companies to move their manufacturing operations abroad to third party vendors. AA has stayed true to its roots by keeping it local and operating the largest apparel manufacturing facility in Downtown LA. The company believes in having manufacturing under the same roof as design, marketing, accounting, retail and distribution which allows them to quickly mobilize all departments, increases efficiency, respond directly to changes and to have complete visibility of the product from start to finish. However now, most items are made at its Downtown L.A. factory and there are products being produced in factories in Honduras and Nicaragua. Their new motto ‘Ethically Made-Sweatshop Free’, refers to making of clothes that improves the lives while respecting the environment, the planet, the world we live in. They have significantly proven that they have provided a safe and stimulating workplace for their over 48,000 workers in all of their factories. 18
PROMOTION The company re-joined the U.S. market as a digital-only brand in August 2017, the global relaunch marked as a new era for the brand that spent most of the last decade stuck in controversies. It is focused on maintaining its brand DNA by sticking to what worked in the past, therefore, they introduced similar products but with refined tone and aesthetic. With fresh looking ads featuring a diverse unretouched models who are still sexy but not overly-sexualized , the brand focuses on having the classic American appeal. It is working to position itself once again as a global retail player and regain the devotion of the old consumers and gain new consumers. American Apparel upgraded early to AdWords which enhanced campaigns to reach customers across all screens all over the world. After the revamp, this tremendously helped the brand to reach a bigger audience. AA is focusing mostly on their social media and influencers. They are sending products in exchange for user-generated content which they post on their social platforms and editorial with the #AAblog, which includes interviews with ‘real influencers’, lesser-known artists and musicians. For now, they plan on working on micro-level due to the startup budget but they plan on working with paid macro influencers in the future to gain more traffic. The website and social media platforms now have a very editorial feel to it but still, the brand is trying hard to drive more traffic to its social media platforms. In order to compete with e-commerce powerhouses like ASOS and Boohoo, AA needs to offer an impressive online customer experience. AA is offering 24/7 customer services to their consumers and lifetime warranty of products. However, for the brand to further maximize customer value it needs to focus on having a strong omnichannel marketing strategy that allows them to deliver the right message, to the right customer, at the right moment. Billboard marketing content has been done only in the neighbourhoods of New York and LA due to the high concentrations of millennials. They only distribute ads in very few fashion magazines such as Nylon, a magazine targeted toward young, trendy men and women (Nylon Guys). The brand continuously does Direct email marketing and also has various ads on the internet, usually seen on websites such as Instagram or Facebook. 19
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MARKET ANALYSIS American Apparel was the largest T-shirt manufacturer in America in 2007 with $125 million of clothing sold worldwide with a target market based on the nowadays called generation of millennials. In 2013, even though sales amounted to $633 million, the company experienced a loss of $106 million as the margins shrunk. AA lived its biggest fall because of controversial branding (sexist ads) and Dov Charney facing sexual harassments lawsuits. Thanks to a new CEO (Paula Sneider), AA was reborn in 2017 with the reconstruction of the e-commerce site, focusing on “basics”, their core business. After its relaunch, AA focused its target market to Generation Z, more specifically teenagers and young adults aged between 15 to 22 years old. The size of the target market of the brand in the United States represented a total amount of potential customers up to 73.6 million in 2016. AA’s target is characterized by various trends, needs and requirements in terms of products and services. They are abandoning conventional media and adopting new and multiple technologies, especially for social media (Instagram, YouTube and Snapchat being the socials most used). However, they are increasingly and actively avoiding ads thanks to various ad-blocking software. Companies and AA, in particular, need to optimize their connections with young consumers with meaningful content and conversations through social media to capture their attention. Their spending power being particularly high, it is important to reach them through mobile media, producing brief and straight to the point but meaningful campaigns and ads. Storytelling and the promotion of uplifting and positive messages are required because AA’s target is willing to make the world a better place.
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The target market of the brand is confident, optimistic and positive. They care about environmental and social causes and are willing to adopt buying behaviours which can have a positive impact on the future. They value individual expression, uniqueness and brands which are authentic and act ethically in terms of production processes, marketing and internally in the company. Brands need to tell them the truth and appear completely transparent as well as inclusive in their campaigns, they must “take a stand” in a particular issue. Finally, as mentioned before, AA’s new target is not only willing to make the world a better place but also ensuring a good working-life balance. Generation Z gives more importance to future job satisfaction than financial security because their final aim is to be happy in their professional environment.
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COMPETITORS 3.1 DIRECT COMPETITORS Amongst the company’s major direct competitors that stand out are british clothing giant Topshop and american retail chain Urban Outfitters. Urban outfitters is an american lifestyle company offering various brands and vintage finds. Their large offering includes makeup, tech and home decor all complementing the idea of a contemporary youthful style. The targeted audience of UO is the same as American Apparel’s from young adults up to 35, which include generation Z and Millenials. UO’s promotion is a rewards based system using not only discounts but offering also experiential rewards such as concert tickets, meet and greets and personalization to its most loyal customers. The other main competitor is the british high street fashion retailer Topshop whose offering includes womenswear, menswear, shoes, accessories as well as makeup. The targeted audience is the same as the aforementioned, generation Z and millenials. Topshop’s promotion is highly based on celebrity collaborations and endorsements with a strong presence on the social media platforms, high consumer engagement and tech savvy approach to sales. Gap is another direct competitor of the brand ranking itself as casual and timeless american style, and whos offer includes womenswear, menswear, kidswear and activewear. Gap’s target has been changing in the recent years, with its original target being the Baby Boomers, Gap is now converting its style and focus onto the millenials. Gap uses traditional promotion like street advertising but it has been tapping into the social media platforms fairly successfully as well. Although Gap’s been having a downfall in recent years, Gap keeps its customer base by relying on inclusivity and “Optimistic American Style”.
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PRODUCT
womenswear menswear accessories kidswear
PRICE
$ 12 - $120
PLACE
e-commerce
PROMOTION 26
Website Instagram Facebook Youtube Twitter Pinterest
womenswear menswear accessories
womenswear menswear accessories kidswear activewear
$ 14 - $99
$ 6.5 - $383
$5 - $498
own retail e-commerce
own retail e-commerce
own retail e-commerce
Website Instagram Facebook Youtube Twitter Pinterest Street adv
Website Instagram Facebook Youtube Twitter Pinterest Street adv
womenswear menswear accessories interior design & living tech accessories
Website Instagram Facebook Youtube Twitter Pinterest
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3.2 MARKET POSITIONING Previously, American Apparel used shocking tactics for their advertisements. Their idea was that sex sells and it definitely attracted a lot of attention. Their openness with sex had become and is a part of their brand image and that’s how the consumers perceived the brand. They have worked hard to create an image infused with youth and sex. But, their controversial advertising received numerous amount of backlash and negative responses from the media, labelling the brand as “porn-chic”. After Gildan took over the AA has completely revamped itself after renouncing the brand’s controversial image with embracing it’s past. Today, AA is still a 100% American brand, it still has it’s classic American appeal and target consumers who count on the affordable prices with high-quality pieces, which is also a sweet spot for them. The ads are still provocative, but they aim to represent women in a more progressive way. It’s not over-sexualized, but it’s still sexy where women feel empowered and are owning their own sexuality. The brand is now creating new and relevant products, launching the new design and growing its e-commerce business. AA is relying on organic growth from social media and user-generated content to drive brand awareness. However, the brand is still trying to positively position themselves to their target market and to potential new customers.
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3.3 SOCIAL MEDIA ANALYSIS
According to a Hootsuite study conducted, people aged between 18 to 24 years old represent 32% (270 million) of the global Instagram audience profile. Therefore, it is important to analyse the performance of American Apparel’s Instagram page as well as of its direct competitors. According to research done on Ninjalitics, AA has a very low engagement rate and a low number of followers i.e. 0.12% and 1.8 million followers compared to its direct competitors. AA’s Instagram aesthetic is simple and has an All-American vibe where they post a lot of UGC. Comparing to its competitors, Topshop and Urban Outfitters do a high number of monthly posts, contests/ giveaways, UGC posts and lifestyle product shoot posts which results in high engagement. Due to the targeted boosting, the brands have gained a good amount of followers with high engagement between its followers. AA lacks engaging content, therefore, the brand needs to increase its monthly postings, do target boosting, create contests/giveaways to attract and engage the appropriate target. The brand should also host offline events which will help them garner online content. (Info: United States: 120 million users : 50.3 % female, 49.7 % male)
1,8M
9.7M
8,5M
3M
AVG NO. OF POSTS IN 1 MONTH
45
88
142
14
AVG LIKES
2,211
14,974
42,449
10,701
AVG COMMENTS
13
96
122
35
0.12%
0.15%
0.50%
0.36%
FOLLOWERS
ENGAGEMENT RATE 30
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FRONTPAGE
100% profile picture, username, about and call to action are provided
100% Same
100% Same
100% Same
55% Contact information and location are missing
21% Products, location, milestones missing + partial contact information
29% Good # of milestones, partial contact information, missing the rest
81% Only the location is missing
ACTIVITY
67% Some information but leaves followers wishing for more
69% Same
67% Same
58% Same
RESPONSE
0% Users can’t post
100% Users can post
0% Users can’t post
2 354 Interactions with the page or its content
5 264 Interactions with the page or its content
7 974 Interactions with the page or its content
ABOUT
ENGAGEMENT 32
100% Users can post
14 575 Interactions with the page or its content
According to a Hootsuite study conducted in January 2019, people aged between 13 to 24 years old represent 33% of the global Facebook audience profile (cf. Digital Media). Therefore, it is important to analyse the performance of American Apparel’s Facebook page (thanks to the “Likealyzer” website) as well as the one of its direct competitors. As shown hereunder, the engagement between the AA Facebook page and its followers is much lower than its competitors mostly due to the fact that the users cannot post any content on the page. Moreover, the American Apparel’s page has an average daily growth of -11 followers per day.
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FEASIBILITY EVALUATION
Thus, the brand image conveyed to customers is that of a courageous brand, which is innovative and forward-thinking, a source of inspiration to young people. It promotes ideas of equality, of gender, race, sex, and empowerment making itself modern and encouraging young people to feel independent and unique. For sure, the efforts made to rebuild the image and the identity of the fashion firm have been useful and helping it to achieve a good reputation again. As a matter of fact, the brand is now positioned as a fast-fashion one, fashionable and stylish. Since the quality of the products is high, prices are slightly above average. Of course, the way it promotes and supports certain issues, such as equality (gay rights, women causes), should make it appealing to people, feeling it as another voice which represents their mindset and lifestyle. This would also contribute to creating loyalty, that, together with good quality products and relatively a good price-quality ratio, would make American Apparel purchasers faithful customers of their products. Another factor that massively contributes to the attempt of creating a high reputation and image is the attention that the brand is giving to sustainability and ethics, not only about social issues but also about production. A dedicated section on their website shows how hard they are working to maintain sustainable production and how much they put their attention also to the choice of ecofriendly materials and fabrics. However, past actions of the brand still have an echo in the present, since the accusations were very tough. This represents one of the main weaknesses of the brand, which is still one of the reasons why people do not buy AA anymore. First of all, the image build was entirely based on sexual references, sexism and it was very provocative. Things got even worse when CEO Dov Charney is accused of sexual harassment. Despite the firing of the man, the image is deteriorated by lawsuits of this kind. Moreover, the firm is suspected and then found to make its employees working illegally, supporting in this way the clandestine and black market. These issues were the main factors that led the brand to face huge debts and two bankruptcies in two years (2015-16). Nevertheless, the brand was able to recover, even if it is still arduous, and it is trying to rebuild its image and success. They soon understood that the very first thing to do was to start from reestablish a good perception of the firm. Thanks to the capability to study and interpret the social reality in the most profitable way, they decided to go straight to the emotions and feelings of their target, Gen Z. As mentioned before, AA puts its main focus on social issues promoting and encouraging people to support good causes, like feminism, protests for equal rights, gay rights, making the brand a symbol of modernity. Furthermore, they understood that to reach their audience and to make them aware of the changes that were occurring in the brand, they had to be more present in social networks, in order to attract and invite them to purchase again. Environmental and climate diseases are other important topics in our society and to build a positive brand image it is highly important to consider also these aspects. Thus, they gave a lot of attention to it, pushing it in the direction of sustainability and ethics. 36
To sum up, AA was smart and keen enough to detect the imminent changes and facts in society, making these opportunities points of strength toward the renaissance of the brand. The main threat they are facing is the competition among retailers. There are other brands positioned near to AA, covering the area of high price and quality labels, such as Urban Outfitters, Topshop. Moreover, people can move to cheaper brands that produce still fashionable clothes, even if of a lower quality, like H&M or Zara. Brands of this kind are also well-known, sometimes more than AA and they did not face huge “image issues”. Moreover, an important issue is about their presence in social media. Despite they are posting at least twice a day something on Instagram and once a day on Facebook, their contents do not seem to be as interesting and inviting as those of the competitors. After their period of decline, they put much effort and focus on the contents of their brand, stressing ethics and values coherently with the message they wanted to convey, but they are not sponsoring and pushing it in a good way in social. Indeed, the problem is not about the content, it is about the lack of good communication that makes the post become boring and not appealing, despite using beautiful and colorful images. AA has now, as mentioned before, a positive, confident and optimistic approach toward its target, but it is still failing in the way they invite and involve their audience. As a matter of fact, it is possible to see how the other competing brands are achieving success through the use of social media, posting more interesting and appealing pictures, which lead casual visitors and still habitual purchasers to buy and prefer to choose that brand instead of another.
STRENGTHS
• Trendy and fast-fashion apparel brand • Sustainable/ethical production • Product quality • Positive new brand image • Careful about society changes • Good study of their target
OPPORTUNITIES • Millennials and Gen Z are shifting to conscious shopping and look for quality and sustainability in a product • AA’s target is a generation willing to stand up for its rights and fight for them. Ex: Feminists protests • Changing political climate: control over production (raw materials, human conditions) • Technological advancements in production (new ways of sustainable production)
WEAKNESSES • Previous advertising: provocative and sexist • Sexual harassment lawsuits of previous CEO Dov Charney • Black market and illegal work • Two bankruptcies in two years (2015-16) after former CEO got fired • Communication in social media
THREATS • Competition of larger retailers • Consumers still aren’t ready to purchase from a brand with a former sexist image. They need to be convinced that the brand has changed • Lack of good communication in social networks 37
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OBJECTIVES
After an in-depth analysis of American Apparel’s identity and market, we have come to the conclusion that there is a need to revitalize the brand as a strong market leader in order to shift the focus from the damaged brand perception of its past. AA needs to focus on re-creating the brand image to emphasize the positive aspects by focusing on the strengths and seizing new opportunities within its target consumers. 1. Increase brand awareness of the brand towards the new target market i.e. Generation Z, and refresh the brand perception of millennials. Thus, a new and improved communication strategy and the creation of engaging content through offline and online activations. 2. Progressively build new brand associations as a progressive brand that supports the local workforce and young talent by advocating the company’s values. (Public relations) 3. Establish strong brand engagement and improve customer relationship through cause-driven young talent acquisition campaigns, ambassadorship and user-generated content by college students. (Public relations) 4. Increase awareness of ethical and sustainable methods of production. (Public relations) 5. Ultimately increase profits through sales (Personal selling and sales promotion)
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MARKETING STRATEGY
For American Apparel to re-establish its presence in the millennial driven market and to seize the opportunity of technology and the cause-driven new generation (Gen Z), we are proposing the following strategy. The strategy follows a value-based social activation program starting from work already done by the AA (Central American Polytechnic Institute, IPC) towards the benefit of supporting future education and talents while integrating and educating the new generation into the future of the company. Through this strategy, we propose the use of the power and voice of a new generation into creating and refreshing a dusty brand image. The plan follows the implementation of social media platforms into advocacy while creating new need with the proposal of limited edition products and offering recognisable brand merch as a reward. Our main marketing activation is based on the implementation of a pop-up shop (in the form of a mobile truck), in the key cities (Los Angeles, Washington DC and New York) of 3 major American Universities (i.e. UCLA, Georgetown University and NYU). The cities are chosen based on analytical research of its most concentrated customer base, to try and retarget and relaunch the image of the brand. The purpose is to include the young generation in advocating the values of AA by simultaneously showcasing a strong brand image with a positive impact on society. By proposing a new common space where to observe and take part in the AA initiatives, the temporary truck-cafe and shop will offer a place to hang out, take part in the proposed contest and shop for exclusive items. As an outcome, the project proposes to have reached a wide number of bright young talents who might win exclusive work experiences or ambassadorships. The content proposed in this time period will be dedicated mostly to the user-generated content by the reached audience. The strategy offers an insight not only to the views of the target but aims to receive feedback that will further be used in generating future initiatives/contest/proposals from AA. Through the implementation of this strategy we offer the audience the opportunity the experience of a physical space thus translating the online only brand into a tangible customer experience.
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The strategy proposes the use of existing strong brand values and implementing them in the language that is meaningful and comprehensible to the targeted market. Based on our marketing objectives, we propose the following marketing strategy for American Apparel.
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6.1 TRANSVERSAL MARKETING STRATEGIES It is difficult for a brand to stand out in an online world, therefore, digital marketing, if used in the right way, can boost sales, increase brand awareness, improve brand presence, make the brand more profitable and turn users into brand ambassadors. In addition to online marketing strategies, American Apparel needs to implement traditional strategies too:
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1. Re-targeting: AA will target visitors on their websites by showing reminder advertising on other online platforms that can make them recall the product that they saw earlier and turn the visitors into consumers.
2. Contests/giveaways: Even though AA has 1.8M followers on Instagram, its engagement rate is extremely low. AA’s competitors engage their users through contest based giveaways. Therefore, AA will organize these contests on their pages in the long run to further reach a larger audience and engage the users with the brand.
3.
Direct E-mailing: With email marketing, AA will create a deeper relationship with a wider audience at a fraction of the cost of traditional media to drive potential consumers to their online platform in order to increase sales.
4.
Instagram shopping posts: According to adweek, in 2018, U.S. consumers spent $93.5 billion in retail purchases done on their smartphones. It is crucial for AA to implement Instagram shopping posts to convert product inspiration to product information in the most organic way possible and to additionally increase sales through Instagram.
5.
SEO and SEM: AA will increase brand awareness and reach a wider audience through search engine optimization and search engine marketing.
6. Work with Influencers: Apart from working with micro influencers, AA will collaborate with macro Influencers who will have American Apparel Instagram aesthetics and also provide the brand with access to a new audience, organic growth, gain social proof, and UGC.
7.
Discounts: AA will start offering 10% discounts to students in order to build brand loyalty with potential Generation Z consumers. (Discount only to those who login with college/school email address)
8.
Press Release: AA will collaborate with students of each university who are part of the university’s newspaper/journal.
9.
Referral Marketing
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ACTION PROGRAMS
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The aim is to form an enormously powerful influence and positively activate the customers to make them see the brand with fresh eyes, then step by step build recognition and trust, which could consequently lead to purchase behaviours and increase brand loyalty. However, there seem to be some problems with their external communication to get these positive messages out, as currently this information is seen only on their official website, which is not very useful as the target of the brand, Generation Z, who rarely visit websites. Besides the official website, they also manage other social media accounts. The contents on social media platforms are not appealing and effectively-communicating from the perspective of the consumers. Therefore, the most important action to be taken on the current stage is strengthening communication to effectively reach, activate and engage with their target audience and new potential target, through both online and offline channels with well-planned campaigns and activations. We will start with the online resources and later expand and deepen the engagement with the launch of offline activity, the “AA+� Contest.
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“AA+” CAMPAIGN The purpose of this contest is to emotionally and physically engage with our young target by providing a creative opportunity to express what they interpret of AA brand values i.e equality, diversity, creativity, freedom, empowerment, sustainability by posting their picture on Instagram with the #AAplus. By doing this, not only will they have a chance to better know the evolution and sustainable efforts made by the brand while showcasing their thoughts to the public, they could also acquire the opportunity to become an AA ambassador or to do an internship in the AA headquarter, making them better prepared for their future career.
WHY “AA+” CAMPAIGN According to the academic grading system (letter grades: A, B, C, D, or F) used in America, A+ is the highest mark that students can receive for their performance, which stands for exceptional and the best. By creating “AA+” with the combination of AA and A+, it implies AA’s ambitious engagement with the young talents who are ready to wow the world with their creativity through this exclusive on-campus “AA+” Contest.
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7.1 PRE-CAMPAIGN SOCIAL MEDIA ACTIVATIONS
To re-catch the attention of the existing consumers as well as to attract the potential market of the young generation with the new values of American Apparel, there are two important messages we should convey to our targets: 1) The company’s strong beliefs and positive values which are highly associated with the development of the local community and the support for young talents. 2) The ethical and sustainable methods of production which serve to do goods to the environment and the employees. As an e-commerce brand, social media platforms including Facebook, Instagram and YouTube will be used for the promotion. After the message is widely delivered and better recognized by the public, offline activities including the “AA+” contest and the pop-up shop in three major cities in the U.S. will follow in order to turn the company values into solid practices.
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STEP 1 (MAY 2019) Increase awareness of the brand and its values In addition to the regular posts of introducing the new collections, the promotion of the American Apparel’s core values will start to be presented on social media platforms to emotionally engage the customers, demonstrating the company’s determination of ethical evolution and shared values. The content will not only focus on the values of individuals, but also include employer branding, how the company carries out its corporate responsibilities by providing positive working environment, competitive benefits and opportunities of knowledge and skill development to its employees as well as the sustainable ways and technologies used in the process of production, which are all well aligned with the company values.
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STEP 2 (APRIL 2019) Announcement and Promotion of the “AA+” campaign After the company values are better perceived through the efforts made in the beginning stage via online communication, we will add offline activities; the “AA+” campaign & pop-up truck, to our actions in order to better engage with the target audience physically, transforming the abstract values into tangible performance by offering the young generation a platform to share their creativity of how they interpret and make practice those values into their lives. Starting from early April, the announcement will appear on all AA’s external communication channels including its official website, Facebook page, Instagram account, Twitter, Pinterest, YouTube as well as the online resources (Facebook, Instagram and Twitter) of the collaborating universities: New York University, Georgetown University and University of California Los Angeles. The number of followers of these social media accounts are listed below as a reference to how many people we could reach. The announcement on the social media will specify information including: What: The “AA+” Campaign and Pop-up truck When: April / May / June 2020 Where: NYU (NYC), Georgetown U (Washington DC), UCLA (LA) Who: The contest calls for submission from the students, while the pop-up shop is open to everyone Contact: An online customer service by email or through the Facebook page will be provided to respond to inquiries regarding the campaign and the pop-up truck.
NYU
804K
178K
121K
GU
161K
64.8K
63.1K
UCLA
476K
212K
179K 49
Starting in early April, all of AA’s digital platforms will promote the campaign. Information specifically focused on each individual university will be presented 3 weeks before the pop-up shop (online promotion as mentioned in the chart below); during and 1 week after the pop-up truck there will be updates about what happens in the shop and on campus (university updates). While on the universities’ channels, there will be posts about the contest and pop-up shop 2 weeks before it is implemented as well as updates during the week. Early April 2020 Announcement of the “AA+” campaign and pop-up truck (New York) NYU online announcement launch: 6-19 April, 2020 (2 weeks) Time of the contest and the 1st pop-up truck: 20-26 April, 2020 (1 week) Updates and results: 27 April - 3 May, 2020 Location: New York University, NYC Late April 2020 Announcement of the “AA+” campaign and pop-up truck (Washington DC) Georgetown University online announcement launch: 27 April – 10 May, 2020 (2 weeks) Time of the contest and the 2nd pop-up truck: 11 May - 17 May, 2020 (1 week) Updates and results: 18 May - 24 May, 2020 Location: Georgetown University, District of Columbia Mid-May 2020 Announcement of the “AA+” campaign and pop-up truck (L.A) UCLA online announcement launch: 18 May – 31 May, 2020 (2 weeks) Time of the contest and the 3rd pop-up shop: 1 June - 7 June, 2020 (1 week) Updates and results: 8 June - 14 June, 2020 Location: UCLA, Los Angeles
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Since the initial announcement of the campaign and pop-up truck, a complete “tour schedule” from NYC to Washington DC followed by LA will be provided to give a whole picture of the entire campaign. We will also invite micro influencers who are currently based in the US (key cities) to promote the campaign through stories and posts to increase more brand visibility and to reach a wider audience. As a compensation, the influencers will be paid in AA products and special reward. Influencers to work with @everettwilliams – Model based in L.A. – 151K followers @theesperanzamaria - Fashion/beauty influencer based in DC - 30.6K followers @laurenmazzei - Lifestyle influencer based in NYC - 103K followers
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7.3 IMPLEMENTATION (DURING) The pop-up shops will be held in three cities that, according to Google Trends, are those in which the growth of the brand should be more favorable, in consonance with users’ interest in the last 12 months. • American Apparel
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• Compared to competitors
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We start from regions in which American Apparel is searched the most in order to get in touch with people in a more effective way since they already know and are attracted by the brand. This will help to establish a stronger connection with the loyal customers and to re-build brand awareness and image, as well as to awake interest also in the regions where data shows slower activity. We will take advantage of the presence of universities in these territories, making collaborations with them to put the brand in contact with students and young people, representing the target and to offer them possibilities for their working careers. Based on the data, we will start in New York. The pop-up shop will be placed on the campus of New York University in New York, then at Georgetown University in Washington DC and at UCLA in Los Angeles.
A mobile pop-up truck will be the means through which the pop-up shop will be located on the campus. It will be a real “store on wheels” since the wagon will be opened and transformed into a temporary shop and cafe. It will have a two-fold function: The store service, where people from all around the city can see and buy AA clothes. A dedicated and limited edition collection will be created for each city in order to offer something exclusive that can make people feel unique and special. Moreover, an exclusive section of the truck will be dedicated to students of the campus. It will be the area from which they can borrow clothes for one day in order to take pictures and run for the contest of “AA+”, thanks to which they can either win the position of AA ambassadors or internships in the firm. In order to rent clothes, they will have to sign a contract agreeing to the following points: • You can only take the garment for one day • You have to preserve the integrity of the object and to return it in perfect conditions, ready to be rented again. Penalty: Pay it at full price. • You have to take and post pictures/videos on Instagram of you wearing the AA borrowed clothes, geolocate yourself and tag at least one of these hashtags: #AAplus #AAcontest #AmericanApparel 54
The bar service, where people can have something to drink (coffee, water, juices and other non-alcoholic drinks) in a new and trendy, fashionable and exclusive place. The bar will also be “instagrammable�, with lights and nice seats and tables, in order to encourage people to take pictures, increasing the buzz around the campaign, as well as awakening the curiosity and willingness of other people to come, eventually increasing brand awareness. The campaign will start mid-April in New York and the pop-up shop will stay in each city for the duration of one week. Each month will correspond to a city (NYU in April, Georgetown in May and UCLA in June). The choice of the timing is thought to give to students the possibility to start the internship right after the summer break in July. The campaign will end by June 12th, 2020, the last day before the summer break, according to the UCLA calendar. To further drive sales to the online store, the customers who bought products at the pop-up shop will receive a -15% discount voucher on the next purchase online, with a validity of 1 month.
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7.4 SOCIAL MEDIA (DURING)
After raising awareness and promotion of the contest on American Apparel’s Instagram, Facebook and Twitter, the brand will garner online content through the offline pop-up event. During the event, brand representatives will be responsible to cover the events through stories and posts on social media platforms. Promotions, done before and during the event by the influencers, will give the brand higher visibility on social media platforms which will result in a high number of reach and engagement. The events will be covered by a professional videographer and the final event video will be promoted on social media platforms as well as on YouTube through sponsored advertising to increase awareness of the brand. The space will feature multiple photo opportunities, integrated into the shopping experience, to create a memorable moment for visitors. It is necessary to create the brand hype through the hashtags, therefore, students visiting the pop-up shop will be asked to cover the event and to tag AA as well as use the hashtags. The goal of the offline and online activations is to enhance brand awareness and social media buzz while allowing customers to experience and interact with the brand and its products.
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7.5 REWARDS OF THE “AA+” CONTEST (AFTER) After the last pop-up event (located on UCLA’s campus) and the analysis of the contents of students running the AA+ contest on Instagram, 6 winners from each campus will receive a reward related to a job opportunity. In order for the jobs (internship and student ambassador) to begin in the summer, the winners will be announced at the end of the month of June 2020.
Reward 1: Internship Three students per campus will be chosen to have an interview for a potential internship within the AA company. Each student could have the opportunity to be an intern in the department related to their studies and professional ambitions, as well as in which they are most competent. AA will prove to its target that it believes in the workforce and talent of the young generation by introducing them to the professional world. The brand will reinforce its image by hiring ambitious students who support the same ethical values and expressing its interest in education and talent acquisition. The paid internship would last for a period of 3 months during the summer 2020, with a possibility of a future permanent contract with American Apparel.
Reward 2: Ambassadorship Hiring ambassadors as a brand can be very beneficial in terms of awareness and it can also help conveying brand values through positive messages and content on social media or during organized events. On the other hand, being an ambassador while still being a student can lead to many opportunities. Student ambassadors can develop their professional skills by working for a brand while earning something in return. Three students per campus will be chosen as the AA’s ambassadors for an unlimited period of time, according to the content they will have shared during the “AA+” contest. The task of the ambassadors would be to regularly promote the brand through their own social media accounts or directly on campus, share important news or general information as well as participating and hosting events organized by AA in a given city. The ambassadors would be representing the brand, and become the connection between AA and its potential target. They would be compensated in products and by accumulating points, according to the amount of tasks they will have done and their performance. These points would be transformed into vouchers or discounts on the brand’s products as well a potential internship. 60
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MARKETING ACTIVATIONS TIMELINE
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PERFORMANCE ANALYSIS
We would be able to measure the success of the “AA+” campaign after having counted the number of students who would have participated in the contest, by tracking them according to the contents they would have shared on their accounts tagging American Apparel through hashtags and location. Email addresses of the customers will be requested during the pop-up shop events, guaranteeing an increase of the customer database and it will also help understand how many people, approximately, were interested and participated in the event. Moreover, the number of “likes” and followers on the social media platforms of the brand, as well as the engagement rate after the campaign and sponsored advertising will be proof of the social media activation performance. Given the fact that a certain amount of coupons will be given during the events and that special discounts will be offered to the students, it will help calculate the return on investment and understand how many of these coupons or discounts would have been used on the e-commerce of AA and the increase of sales. The newsletters and direct mailing sent to the customer database of AA (including several call-to-action) and the improvement of the SEO and SEM of the e-commerce will increase the click-through and conversion rate as well as the visibility of the website.
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