DMEF Collegiate ECHO Challenge 2013 'Snip to be Cool with dELIA*s
Snip to be Coolwith dELiA*sDMEF Collegiate ECHO Challenge Proposal 2012-2013St. Lawrence CollegeKingston, ONCanada5/17/2013
dELiA*s has been challenging the teenage retail market and so far succeeding in growing into a plentifulcompany with a large following of customers. Their clothing is girly, colourful and always fashion-aware.But the term ‘teenager’ is vague and they’re now seeking a secondary younger audience for their lifestylebrands. 11With such big competition like Aeropostale, American Apparel and American Eagle – not tomention Hot Topic among others 8,18dELiA*s is struggling to maintain its position and keep its brandrecognition. Our main objective was to gain new customers in the ‘Tween generation’ of ages 12-14 whilestill engaging their existing customers of 17 year old girls. 9Our campaign recommendation uses a cut-out model to intrigue consumers about the products. Consumerswill receive a promotional brochure (or have to use dELiA*s various social media to download a copy)with a cut-out model attached. Girls will then have to use their dELiA*s catalogs, the brochure itself and/orsocial media platforms (Facebook, Twitter, Instagram, Pinterest) to find clothes that they like to dress themodel. The model will be then glued onto an Entry Form to be entered into a weekly contest. All entries(mailed into their local store or scanned and uploaded online) will be entered into a draw to win free items,discounted coupons…etc. The contest will run twice a week for 8 weeks from July 6th 2013 until August31st 2013. Judging will be conducted by the store owners and assistant managers of each store.Bus terminal advertising and television broadcasts will be produced for initial build-up followed by thedirect mail (brochure) distribution and social media interaction (posting about contest details and links tocatalog and clothing images.) The television commercials will be placed on the FOX & CW network tocatch audience’s attention while watching popular shows like ‘Glee’ and ‘America’s Next Top Model.’ 4Print advertising will also be produced during the run of the campaign partnered with SEVENTEENmagazine. 1
Company ProfiledELiA*s, Inc. is a multi-channel retail company comprised of two lifestyle brands called dELiA*s andAlloy. The company sells apparel, accessories and footwear to young teenage girls through direct mailcatalogs, websites and for dELiA*s, mall-based retail stores. 8The company was founded in New York andnow consists of well over 100 stores across the United States. 9Industry Apparel Retailers Sector Consumer ServicesFiscal Year-end 01/2014 Revenue $222.70MNet Income $-21.55M 2013 Sales Growth 2.6%Employees 2,040The company currently relies on third parties for essential business operations and services such asprinting, shipping, paper supplies, operating their e-commerce webpages and the outsourcing of their callcenter function.11dELiA*s currently has 4,330 Twitter followers20, 691,000 Facebook ‘likes’19, 106484Instagram followers21& 10,641 Pinterest followers.22Market SegmentsdELiA*s reported generating net sales primarily from direct marketing (catalogs along with dELiA*s andAlloy e-commerce websites called www.delias.com and www.alloyapparel.com) and their retail stores.11Fiscal Net sales (thousands) 2012 2011 2010Retail $ 125,595 $ 123,223 $ 122,444Phone 3,836 6,872 11,713Internet 93,268 87,057 86,540Total Direct 97,104 93,929 98,253Total Net Sales $ 222,699 $ 217,152 $ 220,697Consumer DatadELiA*s primary target audience are 17yr old girls in Junior high school; 9a target within the 12-19yr olddemographic approximately 33 million strong and reportedly among the fastest growing in the UnitedStates. 17Currently, teens and tweens born between 1991-2002 make up nearly 20 percent of the USpopulation, are more ethnically diverse than any other generation of the past, never knew a world withoutthe Internet, cell phones, or Google and are extremely savvy and educated consumers. 15
Competitor AnalysisdELiA*s key competitors are Aeropostale Inc, American Apparel Inc, Rue21 Inc, Body Central Corp, WetSeal Inc, Zumiez Inc, Hot Topic Inc & Pacific Sunwear of California Inc. 8Along with American Eagle,Hollister & Urban Outfitters. 18 Aéropostale designs and sells casual apparel and accessories; targeting consumers in ages 14 to 17teens. Typical merchandise includes graphic T-shirts, sweaters, jeans, outerwear and accessories. Thecompany is also known to hold special sales events on college campuses. The company launched its firstonline catalog in 2005 and reported net sales totaled $129 million in fiscal 2009 (ended January 302010), up 48 percent from the year before. 12 American Apparel has the largest sewing facility in North America. Unlike their competitors, they maketheir own product. The company also committed to sustainability. It has the strictest and mostprogressive EPA standards in the US. As of May 1, 2013 American Apparel had approximately operates248 retail stores in 20 countries & serves over 60 countries worldwide on their e-commerce website. 2 American Eagle is a mall-based retailer that sells denim and other casual apparel and accessories(sweaters, t-shirts, fleece, outerwear, and accessories) aimed at young men and women ages 15-25. Thechain operates more than 1,000 stores in all 50 US states, Puerto Rico, Canada, and now in the MiddleEast. Virtually all of the companys products bear its private-label brand names: American EagleOutfitters and aerie. Direct sales come from the companys website and its AE magazine; a lifestylepublication that doubles as a catalog. 3 Hollister Co. provides apparel for men and women. The company was founded in 2000 and is based inLos Angeles, California. The company’s products include logo tees, sweaters, jeans, shorts, outerwear,tanks, sleepwear and a wide range of accessories. Hollister also offers a diverse collection of body careproducts, as well as gift cards. The company distributes its products through a chain of stores in theUnited States, Canada, and the United Kingdom. In addition, it sells its products online. Hollister Co.operates as a subsidiary of Abercrombie & Fitch Management Co. 7
Marketing Objectives To increase amount of existing 17yr old Junior high primary target market repeat/impulse purchases 9 To expand brand presence & awareness to new secondary target market of 12-14yr old ‘Tweens’ 9Target Market ProfileDemographics: Females between the ages of 12 to 15 (classified as ‘Generation Y’ tweens) 13 Enrolled in junior high or entering high secondary education 9, 11 Living in a working middle-class or blue-collar family Disposable income from doing chores, receiving gifts or borrowing from family & friendsPsychographics: Time spent playing with friends, doing household chores, reading/drawing in bedroom, playing oncomputer or pestering other siblings Highly socially active in order to become childhood role models/icons Decreasing interest in sports and growing interest in males and fashion Very concerned about ‘fitting-in’ with their outward appearance and being fashion-forward Usually walking to destinations with friends or using public transit to feel more independentGeographics: Living in mostly residential suburban communities in highly populated areas Spending most time with friends at high social areas like the mall, school or downtownBehaviour Response:Despite the recent economic downturns of the past few years and a decrease in available money for youth,they report spending an average of $150 per month on media (music, video games, and magazines) fashionand technology. Their spending power exceeds $200 billion, with an average of $30 spent per mall oronline shopping visit. 15
Product StrategyOur cut-out model empowers our consumer’s unique style and creativity that makes them prefer dELiA*sclothing in the first place. As they are transitioning out of playing with dolls but may have dreams ofbecoming a fashion/make-up designer they will still feel compelled to complete an entry. It also encouragesan activity to do with your sister or mother in order to take advantage of their older sense of fashion. It canalso create entertainment and competition between groups of friends to see who can make their model lookthe best (even a possible birthday party theme.)Distribution Strategy‘Closet brochures’ will be mailed to 32 select states with high populated residential areas. Judging will beconducted by fashion buyers, store owners & the assistant managers of the selected stores.Alabama, Missouri, Arizona, Nebraska, Colorado, New Hampshire, Connecticut, 4 stores in New Jersey,Delaware, 3 stores in New York & Florida, North Carolina, Georgia, Ohio, 2 stores in Illinois &Pennsylvania, Indiana, Rhode Island, Iowa, South Carolina, Louisiana, 2 stores in Tennessee, Maine, 2stores in Texas, Maryland, Virginia, 3 stores in Massachusetts, West Virginia, Michigan, Washington,Minnesota and Wisconsin. These states house dELiA*s retail stores and will have the highest amount ofbrand awareness within the target market.Contest advertising will also be shown on dELiA*s homepage on their website, Facebook page, Twitterpage background, magazine advertising, outdoor public transit advertising, along with televisionbroadcasting.Positioning StrategydELiA*s is seen as a young, bright always trendy lifestyle brand of clothing for females. This campaignplays off of their website and online catalogue design to stay bright, girly and playful. The campaign usesthe idea of ‘cutting’ out the cost that consumers would be paying at full price by cutting out our model.
BudgetThe proposed budget is $500,000 in possible upfront spending (but must fall within an advertising to spendratio of 50 or less) to run an 8-week direct integrated marketing campaign in the year 2013. 9This budgetwill cover our run period of July 6th2013 until August 31st2013.Media objectives The target audience for this campaign is 12-15 year old ‘Generation Y’ females. These girls still have achildish outlook on life but are seeking more maturity and respect as they start to transition into earlyadolescents. The message for this campaign is that simply by cutting out our model and using your unique sense ofstyle to dress her you have a chance to win new additions to your summer or back to school wardrobe. Pre-production will take place during early May through June. Advertising will begin in late June for theJuly campaign opening with heavy scheduling through July until the end of August. Advertising will be throughout the entire nation of the United States, heavily scheduled within keyurban markets within the selected 32 states. Our direct mail pieces will be sent out with high reach as the preliminary start to the campaign. Ourfrequency and continuity will be throughout print, outdoor and online advertising. Our televisionbroadcasting will also run throughout pre-production ending & campaign run period.Media StrategyTarget MarketWe are using a profile-matching ‘rifle’ strategy to target our consumers. This generation has grown upflooded with technology exposure and therefore don’t understand the value of traditional media oradvertising as much as other generations. They aren’t used to getting mail specifically for them (other thanpostcards or birthday cards from family.) This generation highly enjoys interacting on their mobile devices
or computer instead of face-to-face interaction. Our campaign takes advantages of both of these facts bysending them ‘personal mail’ using dELiA*s website database and using heavy online advertising.Market CoverageSince dELiA*s is a strictly American brand & company the only media coverage we have to focus on islocally by region. All media coverage will be distributed throughout the 32 selected states. The budgetavailable will determine the extent of key-market coverage.TimingAdvertising will be a combination of build-up & blitz scheduling. There will be an increasing amount ofoutdoor public transit and social media advertising as the mail pieces are sent out. Once the mail piece aredistributed a heavier scheduling of social media, television & print advertising will be scheduled. Thisschedule will decrease as the campaign comes to an end.Since not all ‘tweens’ live in a purely technological world, traditional media will still be used in thiscampaign. Flights of advertising will be distributed throughout late June until the end of August. Outdoor,print and broadcast advertising will be spread out in a skip schedule in combination with the mail piecesand social media build-up.Reach, Frequency Continuity dELiA*s has a mailing list of over 550,000 11with 3,585 active users talking about their Facebookpage,194,343 Twitter followers 20& a circulation of 2,000,000 with SEVENTEEN magazine. 1Thistotals to a reach range of 2,557,928 impressions. A continuity of 1 month for our magazine advertisement and 2 months for our television broadcastingand social media. Frequency will be between 1-2 weeks as the campaign is so short that overloading consumers with themessage will begin to deter them from the offer due to irritation.
Media Selection RationaleTelevision (50sec full colour spots)Most busy parents leave it to computers and technology to parent their children for them so it would beeasy to target them through tangible and online streaming. It’s the best way to use full ‘theatre of the mind’to all senses of our target audience.Direct MailMost young girls rarely receive mail specifically for them other than postcards from friends or birthdaycards from relatives. This is a great way to increase our consumer interaction and help aid in their neededgrowing sense of independence.Outdoor (inside public transit & bus stop posters)Many girls take public transit in order to gain a sense of independence. So they are in constant view ofbillboards, bus stop signage, inside bus ads and rack cards along with other outdoor signage. Just like printand direct mail it is a great way to target a massive audience with creative powerful messaging.Print (SEVENTEEN magazine)Print is a good way to profile-match our target market. Many young girls read magazines and look atoutdoor advertising to learn about fashion, makeup, relationships and ‘trendy’ habits from celebrities.Online (website, Facebook, Twitter, Pinterest & Instagram)Using social media platforms for advertising is the fastest most cost effective way to target Generation Ygirls. They are constantly online or interacting with each other for communication, gossip and news.Facebook and Twitter and free to users so it’s the simplest way to reach our profile target market.Media Rejection RationaleRadioSince our campaign is so visual it seemed a waste of resources and budget to add radio into our campaign.It’s not as clear of a message just to describe what our cut-out model looks like or the prizes offered,especially when most young girls listen to music on their iPod and not the radio.
Creative Objectives To communicate that dELiA*s is a trendy and generation-connected brand (consumer interaction) thatsupports the unique style and creativity of it’s customers To communicate that dELiA*s clothing should be your go-to summer/fall choiceKey Benefit StatementChoose dELiA*s as your trendy summer makeover choice.Creative StrategyImageOur goal is that customers see how easy it is to participate in a dELiA*s promotion, engage in theinteraction and realize the fashion-forward trendy quality of the lifestyle brand while picking out theirmodel’s clothing. This will prompt impulse buying while completing their Entry Form and additional sales.ThemeOur theme describes how cool it is to be creative and unique with dELiA*s clothing. It emphasizes thewide range of colourful fashions that the company has to offer.Tone and StyleAll messages are straight-forward with a simple layout. The colour and context are consistent and connectwith each other (ie: social media refers to print, broadcasts refer to social media…etc.)Appeal TechniquesOur theme uses a ‘customer can...’ appeal; It explains how cool you can be if you enter our contest becauseyou get to show off your sense of style and win exclusive prizes to make your wardrobe better than others.
Expenditure by Type of MediumMedium $ Expenditure % of TotalOutdoor 6$9,000 1.8%Print 1$140,180 28%Television 4$328,456 66%Direct Mail 5$17,900 3.5%Total $495,536 99.3% of Plan BudgetExpenditure by MediumPrintMagazine Frequency Cost $ Total CostSEVENTEEN magazine 1Standard 1/3Page 4Colour2 $70,090 $140,180Outdoor (Public Transit Bus Stops)Market GRPs Rate Flights $ Total CostBlue Line Media 6Standard 47.5"x68.5" 4Colour50 $4,500 2 $9,000Direct MailDistributor Printing Shipping/Handling $ Total CostPrintingcenterusa.com 5Standard 8.5"x11" Landscape, 4Colour$4,000 $13,900 $17,900Television BroadcastNetwork # of Spots Cost/30sec Spot $ Total CostFOX – Glee 4CW – America’s Next Top Model 411$267,141$61,315$328,456Blocking ChartActivity May June July August SeptemberOutdoorNational (32 States)PrintSEVENTEEN MagazineTelevisionNational (FOX & CW Networks)Direct MailNationalOnline Social MediaE-commerce, Facebook, Twitter
Cost Per Piece= $495,536 cost of campaign / 2,557,928 impressions= $0.19 CPPCost Per Response= $495,536 cost of campaign / 520,000 responses= $0.95 CPRGross Profit= $495,536 cost of campaign + $3,000 (discount lost opportunity cost budget)= $498,536 – $ 312,000 generated offer revenue= ($186,536) Gross ProfitBottom Line Profit= $495,536 cost of campaign + $3,000 (discount lost opportunity cost budget)= $498,536 - $182,000 revenue from all related sales= ($316,536) Bottom Line ProfitROI (Return on investment)= $182,000 revenue from all related sales + $312,000= $494,000 - $495,536 cost of campaign= ($1,536) ROILifetime Value of a Customer (LTV)= 6 annual customer visits x 4 year churn rate x $360 annual spending + $1.14 customer replacement= $8,641.14 Lifetime Value of CustomerLifetime Value of a Campaign (LTC)= $8,641.14 Lifetime Value of Customer x 520,000 responses= $4,493,392,800 Lifetime Value of Campaign
Key Market Research Conclusions Proposed Strategy SolutionIncrease the online social engagement betweendELiA*s and it’s consumers.Contestants will have to interact with dELiA*svarious social media to find clothing choices –which will also help increase impulse purchases.A stronger positioning and brand loyalty ofdELiA*s lifestyle brand with primary and secondarytarget market combined.Our campaign positions dELiA*s as a trendyfashion-forward colourful brand that fits yourunique lifestyle.A stronger integration of all traditional, direct andnon-conventional mediums to promote/advertise.We use traditional advertising to distribute theinitial message and cut-out model and reinforce ourmessaging and overall campaign with social media.
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