How does a company that relies on teenagers for the bulk of its commerce keep sales up in an increasingly competitive fashion environment? By taking the advertising to the one thing any teenager in America can’t bear to be apart from for more than a few seconds: their smartphones.
This has been the bulk of the American Eagle strategy for the last year in an attempt to drive sales and consumer traffic to the retail outlet and website through in-app promotions and geo-targeting potential customers with localized discounts, as well as a chat function where customers can talk to each other, and customer representatives, about the various clothes on offer.
So far, the strategy has given a boost to American Eagle in a time when brick-and-mortar sales are lagging. Retail sales per square foot have fallen to around $469 in 2013 from $521 in 2012 as competition from retailers like Zara and Forever 21 eat some of AE’s market share. However, thanks to geo-targeting, online sales have increased along with the ubiquity of the app on Android and iOS phones. According to company research, 50 percent of site visits came from mobile users, demonstrating the importance of having strong mobile and Web connectivity. Along with exclusive offers and unique customer interactions, AE can offset some of the losses from its retail decline, and possibly claw back some market share from its competition through mobile advertising.
When mixing brick-and-mortar retail and mobile commerce, synchronization is key, and American Eagle is taking steps in this direction. Through geo-fencing, as well as a heavy rollout of beacon systems that use low-power Bluetooth technology, customers can be targeted within a fixed radius of an AE outlet and drawn into the physical store. It may not restore American Eagle to its former glory on its own, but it does show that they aren’t ignoring the advantages a teen-driven market can offer the retail market.