AEO Sales Presentation

Prepared for: American Eagle Outfitters

Prepared by:
Elyse Echard
Date:
December 4, 2013
Proposal #:
1

ELYSE ECHARD
1 John Carroll Boulevard, University Heights, OH 44118
(C) 7249538741 | eechard15@jcu.edu

December 6, 2013
Lucas G. Paglia
American Eagle Outfitters, Inc.
77 Hot Metal Street
Pittsburgh, PA 15203
Dear Mr. Paglia,
The importance of fashion is underrated in todays society. Not only does it
provide a first impression and help boost ones self esteem, but it is also
illustrative of culture and individuality. American Eagle Outfitters (AEO) has
had a long history in providing the public with fashionable merchandise
however, the company is slowly loosing its once loyal customer base. As a
performance driven sales person, I seek to assign my expertise to your
company.
AEO is a very popular fashion retailer who has consistently produced fashion
forward apparel within the last two decades. Not only does the brand provide

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the basics (jeans, hoodies, and t-shirts), it has also expanded its inventory to
include outerwear, dress apparel, underwear, and performance gear. The
clothing is of nice quality and can be worn a few years after purchase with it
still being considered stylish.
Although AEO has done a great job in providing fashionable and quality
apparel, the company faces fierce competition from the rest of the industry.
After the 2008 economic collapse, AEO sales plummeted by 15 percent.
Since then, the company has experienced one of the lowest turnover rates in
its history. I believe this is due to a shift in the competition. Since AEO came
into the marketplace, its biggest competitors have been Abercrombie & Fitch
and Aerospatiale. However, there has been a recent shift in demand amongst
teens, as fast fashion has become a popular outlet. These fashion conscious
consumers are looking to have the latest looks on a limited budget
regardless of the quality of their purchase.
Though it is my opinion that this fast fashion fad will quickly fall out of style, I
do believe that your company has the potential to combat this new
competition. At present, AEO is viewed by many as a t-shirt retailer. I believe
the solution is through product positioning and packaging within the stores
that will incorporate an edgy lifestyle element without loosing the identity of
the brand. It is my hope that by inviting me onto your team, we can bring
AEO back to being the trendsetter that it once was.
Thank you for your time and consideration,

Elyse Echard

Situation Analysis
1) How and when did the business start and how successful
has the company been.
Founded in 1977 by the Silverman brothers as a subsidiary of
Retail Ventures, Inc
Sold in 1991 to Jacob Price
Currently the parent company of Aerie
Recently entered into a partnership with international retail
operator, M.H. Alshaya, to open stores in the Middle East
Total net revenue for the 13 weeks ended in Nov. 2, 2013
decreased 6 percent from $910 million to $857 million ended

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October 27, 2012
Total consolidated comparable sales decreased 5 percent against
a 10 percent comparable increase in 2012.
Expects earnings of 19 cents per share in this years third
quarter. This is still devastating when compared to the 41 cents
per share in last years quarter.
Shares jumped $1.99 (14 percent) to $16.64 in after hours
trading on Nov. 6, 2013. They fell 60 cents (4 percent) to
$14.65) during normal trading hours.
Shares are off by 29 percent this year
2) What are the most important things people should know
about the potential client?
AEO is affordable if you know how to utilize the promotions
offered
3)

Why do customers come to the client?

Supply cool basics: jeans, hoodies, and t-shirts
Offer comfortably fitting jeans

4)

What do they offer that competitors cant or wont?

Clothes are made to last: quality
Lower prices when compared to Abercrombie & Fitch
Clothes will be in style for the next 3 years at least

5)

What is the current marketing and advertising used by at least

two of the competition?
Abercrombie & Fitch
o Brand their clothes as sexy models are often
topless
o Spray all clothes in stores with their cologne, Fierce
o Blast their music playlist in stores

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o Shoppers are encouraged to join the A&F club
This is a customer rewards program
o Use loss-leader sales tactics by placing one item (ex.
Jeans) on sale for a short period of time, then rotate
o Go above and beyond keeping their clothes perfectly
folded, color coordinated, and stacked neatly
H&M
o Brand their clothes as affordable and fashion forward
o Campaigns are designed to be clear, simple, and aim
to inform customers of what is new
o Models featured showcase different, unique looks,
styles, and cultural backgrounds
o Last spring, used Beyonce as the face of their
advertising campaign
o Often run cause-related marketing campaigns
I.e.: Fashion Against Aids
6)

What makes your client unique? (Positioning) What specifically

is the clients selling point?
AEO considers their audience in its totality
o Considers young children and older adults outside of their
target demographic, as these individuals tend to shop
alongside their intended audience
The company keeps the volume of their music

7)

playlist at a reasonable level

Posters in stores are appropriate

How would you describe their brand at the present?

AEO has the perfect mix of fashionable, trendy pieces and core
basics

8)

Who are their competitors?

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Abercrombie & Fitch and Aeropostale
Fast-fashion stores, such as H&M, American Apparel, and Forever
21
9)

Why do customers go to the competitors?

Shoppers may go to Abercrombie & Fitch or Aeropostale for a
different color in a shirt/different wash of jean
With the exception of Abercrombie & Fitch, AEOs competitors
offer a lower and more affordable price
Less interested in logo centric clothes
Want more fashion forward, trendy, straight from the catwalk
apparel

10)

What is the potential clients #1 reason customers should go

to them over the competition?
The clothes are good quality
You can get good deals if you know how to utilize the promotions
offered
The clothes you buy will be in style for the next 3 years at least

11)

What presently is the image of the company? How would you

describe their brand?
Individual, optimistic, American style apparel

12)

What is the biggest marketing problem the potential client

now faces?
Teens are fickle when it comes to fashion
Shoppers are now less interested in logo centric clothes and
more interested in shopping for low-cost, fast fashion chains like
American Apparel, Forever 21, and H&M
Has a narrower clientele than that of retailers like H&M and Gap
Inc. who attracts shoppers of all age groups
Competing with electronic stores, as U.S. government statistics

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show young shoppers investing more of their money toward
electronics and less on clothes
13)

What are the potential clients customer demographics -gender, age

AEO attracts 15-25 year old men and women
Many adults wear the brand
o Can be due to shopping for/with their kids
Not racially exclusive: The brand is worn all over the world

14)

What is the potential clients customers income?

Middle class yearly income between $25,000 and $100,000

15)

Now that you know your clients audience what radio

stations, TV stations, programs, etc. you would buy?
Television Stations
o Bravo
o E!
o MTV
o abcfamily
Radio Stations
o Kiss fm
Web
o Facebook
o Twitter
o Instagram
o Pandora radio

16)

How often does the potential client advertise on: outdoor, TV,
direct mail, Internet, newspapers, magazine/trade
publications, and telemarketing?

17)

Mostly advertise through billboards, internet ads, and direct mail

What style of commercial would best depict the potential

clients business? Comedy, straight red, highly creative, sound
effects, slice-of-life, other.

A slice of life dialogue done between a collective group of active

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teens.
18)

You know the potential clients problem area (where they are
hurting).
Current marketing campaign limits audience because it
only attracts an American image.
Their current target audience wants to be fashionable but
they dont want to spend a lot of money
Fast fashion works extremely well for this problem
As a result, there has been constant pressure to discount:
o AEOs gross margin fell 3.6% last quarter to 33.8% of
sales well below the typical 40% level
There website is not easy to navigate and is not appealing
Clothes look better in there store; look cheap online

19)

What is the creative strategy for relieving their pain?

Do a product positioning spin
Play off of the 4 Ps: Product, Price, Packaging, and Promotion
o Focus on promotion and packaging
At present, many people associate AEO as a t-shirt store
return to being the trend-setter
Section store off into different closets
o I.e.
Edgy, skater closet
Date night closet
Thrifty closet
City look closet
Jewelry closet

20)

Describe in detail how you will evaluate the success of your

plan.
AEO can monitor their new marketing efforts through quick
surveys via email or phone calls
AEO will need to provide an incentive for taking surveys:
o Receive 20 percent off there next purchase

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o Receive a free AEO drawstring bag
Surveys will need to be conducted at each fiscal quarters end to
ensure the company has a sufficient amount of data to analyze
Survey results will be compared to the customer base as each
years end
Strategies and tactics will be adjusted based off of this
information

Suggested Methods Of
Advertising
Billboard ad

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Billboard Ad.
Live Your Life is AEOs signature tagline. I believe this picture
accurately captures what AEOs tagline communicates. Roller-coaster
are often daunting to many, as the massive drops, inversions, high
speeds, and G-forces almost never occur in normal life makes the
experience both frightening and exhilarating. Also, a sense of
accomplishment overcomes the rider once they realize that they have
made it out in one piece.

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The picture of the rollercoaster is of the Jack Rabbit from Kennywood
Park in Pittsburgh, Pennsylvania. I found it fitting that the picture be of
a location in the Pittsburgh area as that is where AEO was established.

Internet ad

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This ad is efficient in that it acts as a los leader. At first glance, people

searching the internet will see 50% off and free shipping and
immediately click on the ad. Even if they do find that it only select
items are on sale, they may find other pieces of apparel that they may
like enough to buy.

Newspaper Ad
AMERICAN EAGLE
OUTFITTERS
ae.com

Take $15
off
This ad is simple and effective. Everyone loves a good deal, so this
easy to cut out advertisement will help bring people into AEO stores,
while also

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Radio Copy CLIENT: American Eagle Outfitters

production
PRODUCT: Men and Womens Apparel
Time
MEDIUM: KISS fm Stations

DESCRIPTION: 60-sec.
FOR AIRING: M-F, Drive
TITLE: Live Your Life

SOUND:
PEOPLE TALKING, SHUFFLING NOISES UP AND UNDER
JOSIE:
People say you are crazy for doing that! But thats exactly
what Im after.
JON:
that?

People think that I should grow up - but whats the fun in

MUSIC:
JARED:

UPEAT ROCK MUSIC UP FULL THEN MUSIC UNDER FOR:

I love

LAUREN:

Being outdoors

KAITLYN:

Traveling the world

NICK:

Going beyond my boundaries

JAKE:

Visiting places that always looked nice in magazines

JOSIE:

I love.

JON:

The thrill of experiencing something different

KAITLIN:

Testing the waters

JARED:

The feeling of accomplishment

NICK:

The simple things in life

MUSIC:
LAUREN:
JARED:
NICK:
KAITLIN:

UP AND FULL AGAIN THEN UNDER AS SHE SPEAKS

I wear American Eagle because
It fits my lifestyle
It defines who I am
It makes me feel beautiful

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JON:

Its ready for whatever adventure I embark on

MUSIC:

CROSSFADE CHANGE OF PACE AS SHE SPEAKS

JOSIE:

No matter where life takes me, I can always trust that

American Eagle will

have something for the occasion. American Eagle
Live Your Life
MUSIC:

UP AND OUT

TV ad (see storyboard)
I chose to feature well known celebrities to serve as the face of AEOs
brand for several reasons. The first reason is that more people are
inclined to find apparel more attractive once they see it on someone
else. Therefore, both men and women are both more likely to buy a
product once they see how another person chooses to use or wear it.
Another reason I chose this strategy of advertising is because of the
impact celebrities have on society. Many people look up to celebrities,
and even go to them for inspiration for a hairstyle, hair color, or a
certain look. My reasoning for choosing these specific celebrities to
showcase the brand is due to their large following among AEOs target
audience. I believe that using these celebrities will help drive traffic
and increase sales.