American Eagle Outfitters, the clothing store that caters to15-25 years olds of both sexes, has become an early adopter ofFacebook’s newest offerings.The ability to link Facebook Places(introduced in mid-August) with Facebook Deals (available as ofNovember 3) enables participating retailers to offer on-the-spotdiscounts to Facebook users.American Eagle Outfitters has electedto open with a 20 percent discount on a customer’s entire purchase,an offer that is triggered when an iPhone user registers theirlocation in the store.
Facebook advises that they have the ability to structure avariety of deal types, and noted: “You’ll see a few different typesof Deals: individual deals for a discount, free merchandise orother reward; friend deals where you and your friends claim anoffer together; loyalty deals for being a frequent visitor to aplace; and charity deals where businesses pledge to donate to acause when you check in.”
Many of the offers will be short-lived, with an expirationembedded when they are downloaded to the phone, in order toencourage immediate buying behavior.Consider the variety of some ofthe offers already announced on Facebook’s own blog:
- Gap: Giving blue jeans to the first 10,000 customers to claimtheir deal.
- JCPenney: Giving $10 off any $50 purchase.
- Macy’s: Offering 20 percent off select merchandise.
- North Face: Donating $1 to the National Park Foundation forevery person who checks in at a North Face store or NationalPark.
- The Palms: Upgrading your room or extending your weekend at thehotel another night–on the house.
- REI: Donating $1 to a local conservation non-profit when youvisit their stores.
“American Eagle Outfitters customers are avid users of Facebook,and they virtually always have a smartphone in their hands,” saidMike Dupuis, vice president of digital marketing, American EagleOutfitters, Inc., in the company’s press release.Initially, thePlaces/Deals connection seems to be available only to Facebookmembers with iPhones.Presumably that functionality will be extendedsoon; Facebook Places has just become available for Androidphones.
American Eagle is reinforcing the new marketing message via itsTwitter account @American_Eagle.The company’s Twitter reps havebeen busily responding to customers who might have had difficultyfinding the offer at a particular store, or those wondering whyFacebook users are receiving 20 percent off when the correspondingdeal on Foursquare has been only 15 percent. Facebook, for itspart, is upping the ante on the presumed value of its user base, aslong as a retailer is willing to extend its reach to those userswhether at home, at school, or at the mall!
The Twitter traffic surrounding American Eagle is, as expected,driven by young users, many exchanging messages with friends aboutsomething cool they saw in the store or the favorite item they willwear that day, often accompanied by Twitter pics.The chatter amongthese users is literally free advertising for American EagleOutfitters.The company is actively building a following on Twitter(just shy of 32,000 at last check) by occasionally rewarding afan/follower with a gift certificate or special coupon to enablethem to purchase a product they have fallen in love with:”OK, @LittleMolls.Take bootsoff your wishlist. Send a DM w/ your email, & we’ll send a giftcard! Happy Thursday!”Twitter is also the primary delivery channelfor announcing instant surprise specials such as one-day discountsfor holders of college IDs.
What are the challenges?Retailers will have to develop a new setof analytics to understand the way different types of dealsmotivate their customers and impact their bottom lines.Whichconsumers, in which stores, will be motivated by charitabledonations, and how large a donation is required to accomplish anoticeable shift in buying behavior?Will a discount on “selecteditems” move the customer, or is the discount on an entire purchasea better motivator?What should be the duration of these deals?Can ahefty discount move shoppers on its own, or is an active Twitterfollowing also critical to get the news out?
American Eagle Outfitters offers valuable lessons for thoseseeking to attract the younger generation.They have adapted to theomnipresent phone as the vehicle for delivering offers tocustomers, and know that they can rely on those customers to”spread the word” among their friends if the message merits theirattention.
Sadly, none of the initial adopters noted on the Facebook blogpage represent the financial services industry.Compare theimmediacy of the customer gratification here with the offers I’mgetting from my credit card company: those ubiquitous blank(PAPER!) checks which come in the regular U.S. mail, inviting me towrite myself a cash advance with no interest for a year.Yes, someof these target consumers are too young to have credit cards, but Irefuse to believe there isn’t a play for someone to add value, andattract new customers, via the payments portion of thesetransactions!
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