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dELiA svv

Presentation 2013

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dELiA’s is a direct marketing and retail company launched in 1993 by Stephen Kahn

and Christopher Edgar. Currently they have 100 retail stores in 35 states, consisting

of products that provide consumers with a vintage feel at an affordable price. With

over a decade of success behind them, they have struggled in recent years to remain

popular with the target market.

dELiA’s is attempting to start fresh again, starting at their executive level. As of April

1, 2013, CEO Walter Killough is stepping down four months prior to his contract

expiring. Company chairman Carter Evans said: "Walter has been a great leader,

following through on our strategic initiatives and positioning Delia's on the right course

to profitability." However, they have remained unprofitable over the past 4 years, but

are searching for new opportunities to reestablish their brand and attract new youthful

customers. This change comes at a time when the world is online and at the fingertips

of every teenage in the world. They are searching for a new executive with the

passion and drive to utilize this and rejuvenate this company.1

C ompany Information

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C onsumer Analysis

Teen Spending Teen Income & Spending

In 2012, teenagers ages 12-17 represented 7.9% of the U.S. population. That percentage represents 25 million individuals.

In the next 5 years, that number is projected to increase 5.3% increasing sales opportunity within dELiA*s target market.

These consumers are trendsetters and early adopters.2 Although teen spending was at a decline in 2012, personal influences

such as parent opinions, circumstances and abilities to save, influence these numbers. Age and gender influenced spending

and saving habits as well. Boys tended to save more than girls, and older teens saved more than younger teens.3

Teenage girls spend most of their money on clothing and things

that impact their appearance.4 In the U.S., teenagers have the

disposable income to spend up to $918 million per week. A

Mintel data report states that weekly teenagers are receiving

a total of $36.73 from sources including allowances, jobs and

gifts. The report also states that 41% of teens spending money

is given to them in the form of allowances or gifts. Another

26% say that their parents pay for all of their expenses. This

information is portrayed in the chart to the right.3 0%

20%

40%

60%

80%

$0 $1-5 $6-10 $11-20 $21-40 $41+

Working/job Money from parents/grandparents

Parents pay for everything directly

Mintel. (2013) Marketing to Teens - US. - November 2012. Retrieved from Mintel Market Research database.

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Teens value being smart, fun and nice. They like to see this reflection in advertising and in their favorite brands. The top

values are listed in the chart below and key into what teens look for in their products, brands and advertisements.

When teens describe themselves, the top four things they say are that they enjoy school, they are decision makers, they want

to be famous and they have been bullied. This can be attributed to the appeal of reality TV stars and other teen programming.

Cyberbullying is a huge part of teen life and teens place influence on causes that help prevent this type of bullying. In older

teens, a reach for independence and individuality occurs and they become more confident in decision-making.3

...are fun to be around

...are nice to other kids

...are a good citizen

...are good looking

...wear cool clothes

...have talent

...post interesting things on facebook

...know about celebrities and pop culture

0% 25% 50% 75% 100%

Teen Values & Identity

How teens want to be perceived

Mintel. (2013) Marketing to Teens - US. - November 2012. Retrieved from Mintel Market Research database.

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The target market speaks!

"I've never heard of dELiA*s before,

but the clothes are really cute! "

- Kathleen Kennedy - Age 17

"I love the clothes there. I think a lot of girls would be

interested. The clothes are cute and summer-like. I

would definitely shop there because they have cute

clothes at a reasonable price. "

- Cathy Park - Age 17

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C ompetition In annual sales, Delia’s made $217.15 million in 2012. In comparison, this is less

than half of what the top competition makes. They have a $32 million market value. In

April 2012, their direct marketing gross profit for the quarter ends was $9.7 million or

41.3% of related revenues as compared to $9.9 million or 44.6% of related revenues

for the quarter ended April 2011. The cut in gross profit, mainly resulted from lesser

merchandise margins, correlated with increased markdowns on clearance goods and

more vigorous promotional techniques to attain new consumers, increased shipping

and handling costs.8

Abercrombie and Fitch is an upscale clothing brand for young men, women, and kids. It is widely popular, operating

worldwide with about 1,045 stores in Europe, North America, and Asia, through both stores and catalogs alike. ANF

generated $3.47 billion in net sales in 2010, up from $2.9 billion in 2009. ANF top competitors are Gap (GPS), Aeropostale

(ARO) and American Eagle Outfitters (AEO). ANF has consistently been at the top of its sector in terms of profitability

and sales. As a point of reference, the approximate average price for a pair of men's jeans at Abercrombie & Fitch is $80

compared with $45 at American Eagle, $25 at Aeropostale and $50 at Gap.10

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Hot Topic has 625 mall-based stores in the US, Canada, and Puerto Rico. They sell rock-inspired clothing and accessories to

kids ages 12 to 22.11 With a fiscal year-end in January, Hot Topic’s sales in 2013 were at $741.75 million with an annual sales

growth rate of 6.28%. Their net income in 2013 was $19.47 million with a market value at $586.01 million.12

Although once a supplier of only outdoor gear, American Eagle Outfitters is now widely known for its casual wear in all aspects

of fashion, from jeans and t shirts to pajamas and bathing suits. The retailer is strictly based within malls, and is aimed at both

young women and men in their late teens and early twenties.13 With a market value of $3.96 billion and a low prescreen store,

AEO had a 10% sales increase this past year.14 During the January fiscal year, AEO’s net income in 2013 was $232.11 million

and total assets equaling to $1.76 billion.15

Alexandra Biesada. (n.d.). delia*s company overview. Retrieved from http://subscriber.hoovers.com.libdata.lib.ua.edu/H/company360/overview.html?companyId=52630000000000

2012 Competitive Landscape

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SW O T AnalysisStrengths* Experienced 25 years in retail, catalog and e-commerce management team20

* Diverse collection of name brands and proprietary brands which allow for quick adjustments to rend changes* Circulating 38.8 million direct mail catalogs each month21

* High degree of control over the flow of merchandize

Opportunities* Growth in target market having/ using mobile devices to access information* Ability to penetrate the massive growing social media market* Low costs of raw materials* Expand customer base through internet sales, and less mail order

Threats* Seasonal variations* Weakening economy* Less mall traffic* Increased trend in teens to save money

Weaknesses* Combined target audiences form a broad target market* Weak brand identity* Inventory decline per store* Shipping & Delivery issues and customer complaints7

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Target MarketdELiA*s primary target consumer is a trendy, unique teenage girl who is environmentally conscious and

a heavy user of social media. Specifically, she is a 17 year old caucasian female who is a junior in high

school. Her parents are 40 - 55 and married, with an annual household income starting at $40,000.

The secondary target audience is non-race specific and includes females between the ages of 12 and

14. This target includes teens with both single and married parents who have an annual household

income above $37,000.23

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Marketing ObjectivedELiA*s objective for the 2013 direct/interactive marketing campaign is to increase sales 6%. This will

be achieved through traditional and non-traditional media which will increase reach and frequency across

target consumers.

Advertising ObjectivedELiA*s 2013 campaign will attract a consumer who trendy, unique and environmentally aware. The

focus of this campaign is to build brand awareness and change consumer perspectives. This campaign

will position dELiA*s as a brand attuned to the consumer’s needs and lifestyle. In addition, dELiA*s will

become the ‘cooler’ choice for our target consumer who is focused on unique fashion.

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The goal of dELiA*s 2013 campaign is to optimize reach and increase frequency in order to boost sales

and brand identity. The campaign will focus on interactive and digital media and include traditional

media buys. By using this strategy, dELiA*s will optimize reach, increase brand awareness and expand

consumer relationships.

Media Objectives

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Throughout the rest of the campaign dELiA*s will have continuous buys in magazine, transit, digital,

and social media. The spot reach will be set at 70% with a frequency of 4. The national reach will

be set at 60% wil a frequency of 5. By using a continuous buying schedule, dELiA*s will be able to

successfully meet campaign objectives by utilizing high reach and frequency media buys.

Spot Reach National Reach Spot Frequency National Frequency

0

20

40

60

80

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8

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Magazine Inserts

Transit Advertising

Sponsorships

Promotional items

Banner ads

Social Media

Contingency SEO

35%

30%

20%

8%4%

2%

1%

1%

Media Mix

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Transit Advertisement

Transit advertising will be utilized within the 6 spot

markets. The advertisements will be placed on

transit bus stations and will run for two 4-week

periods. This advertising will be effective to the target

market because it will be interactive. The ad itself will

have movement and will generate buzz and social

media conversation. Transit advertising will increase

reach as well as generate frequency in spot market

areas.

Transit advertising will account for 30% of our total budget. As Generation Y continues to age and mature, an

environmentally concerned stereotype is beginning to emerge. They are finding the use of public transportation,

bikes, and foot power a more economical way to get where they are going. With the rise of technologies such as

social media, teens are finding the world they are growing up in smaller and smaller. Studies show that over the past

decade, young people 16-34 years old have decreased the annual number of vehicle miles traveled by 23%.30 With

such an increase in use of public transportation, we believe that our eye-catching advertisements in select transit spots

will spark interest to our target market. It will engage them in the ads and generate buzz on social media outlets.

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SponsorshipsFrom August 9th - 11th dELiA*S will sponsor Outside Lands Music Festival in San Francisco, CA. This is a three-day green-

movement festival, usually attracting between 40,000 - 60,000 attendees a day. Over half of all attendees are under the age

of 25. We are not just targeting residents within driving distance of the closest Brentwood store, but instead the 72% of young

people traveling from outside the bay area to partake in the festival.31

Our interactive booth and trendy promotional items will allow us to not only fit in the hipster west coast atmosphere, but will allow

us to stand out and create social media buzz. With the glowing balloon drop on the last night, we will leave a positive lasting

impression on the target market attendees. This sponsorship will reinforce our campaign message and encouraging youthful

awareness. Our other sponsorship of the Do Something Awards, engages the target consumers in a fun and socially aware

atmosphere. Both of these sponsorships align with marketing and advertising objectives.

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With 90% of our target market plugged into Social Media, this buy is a must. 75% of our

national buying will go into this category. Social media can be accessed everywhere, allowing

teens to incorporate more online time in their daily lives.

31% of the time teens spend on smartphones is spent on

social media. With a target consumer entwined into the

digital world, social media becomes pivotal.

dELiA*s is currently plugged into the typical social media

scene with accounts on facebook, twitter and instagram.

Yet they have not fully embraced the potential of new

technology. In order to understand the target consumer,

social media buys need to be extended.

Social Media

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Youtube

The first extension of the social media buys is to incorporate Youtube. Youtube is a great medium to use generate interest,

increase reach and build better consumer relationships. For this medium, we will purchase in-stream advertisements.

Although they are often overlooked and skipped, it offers a bonus that regular youtube ads don’t have. In-stream buying

offers the ability to change the background of the webpage as well as play a video advertisement. This will be a great way

to change consumer attitudes and generate interest among the target audience.

Along side in-stream advertisements, we will also launch a dELiA*s Youtube

channel. This channel will provide the target audience with numerous resources

and entertainment. Ideas for weekly posts are bulleted below.

* DIY clothing tutorials * The best of youtube - top 10 videos of the week* Nail art tutorials* Technology/app updates* Celebrity looks from dELiA*s * Music scene updates

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App Renovation:

The second extension of social media buys for the 2013 campaign will be app renovation. Although dELiA*s recently

launched a catalog app, it is lacking basic brand application necessities. This media buy will redesign and refocus the

dELiA*s mobile app. By incorporating these elements below into one app, the target consumer will be more likely to

engage with the new image for dELiA*s brand.

According to ypulse.com, the top 5 reason our target market uses a mobile

phone while shopping are33:

* To find store locations

* To get discounts and coupons

* To research prices

* To take photos so they can look for the product at other places

* To find product information

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Magazine Insert

Interactive Transit Advertising

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Mobile App

"I really like these ads! The ads and the video both

capture the essence of "live freely."

They make me feel young, carefree, [and] happy. I

think the music for the video is perfect because it's

very upbeat. I think the video and the ads will appeal

to many girls my age because it incorporates a lot of

colors, cute clothes, and a girly vibe."

The Target Market Speaks!

Cathy Park - Age 17

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Spot Medium Total Dollars Spent % of Budget

National

Budget Recap

Magazine Inserts $175,000 41%Transit $150,000 35%Promotional Items $4,498 1%Sponsorships $100,000 23%

Total: $429,498 100%

Medium Total Dollars Spent % of BudgetBanner Ads $5,000 10%Social Media $38,000 75%Search Engine Optimization $8,000 16%

Total: $51,000 100%

Medium Total Dollars Spent % of BudgetMagazine Inserts $175,000 35%Transit $150,000 30%Banner Ads $5,000 1%Promotional Items $4,498 1%Sponsorships $100,000 20%Social Media $38,000 8%Search Engine Optimization $8,000 2%Contingency $19,502 4%

Total: $500,000 100%

dELiA*s 2013 creative campaign budget was $500,000. With our campaign strategy and creative executions,

we anticipate using all of the budget with a contingency fund included.

Budget

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The End.