American Eagle Outfitters (AEO) Personalization Marketing / MBA Resources

Introduction to Personalization Marketing

What is Personalization Marketing Analysis for American Eagle Outfitters (United States)

At Oak Spring University , we define Personalization Marketing as a data driven that enables companies such as American Eagle Outfitters to make informed decisions regarding current and future behaviour of targeted consumers. Personalization Marketing model is built upon how American Eagle Outfitters customers are behaving at present and how their customer journey can be tailored to provided them an highly immersive and beneficial experience.

Personalization Marketing at American Eagle Outfitters needs to not only cater to the promotional strategies targeting specific needs of the customers in the Retail (Apparel) industry but also to steward overall customer behaviour towards a more holistic customer experience.

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How American Eagle Outfitters can leverage Personalization Marketing

According to 2022, Cheetah Digital survey 74% of consumers want brands to treat them as an individual and 71% of the customers want to build a relationship with the brand that they buy regularly.

True Predictive Personalization Marketing goes further than just sales driving coupons or other promotion strategies. Predictive Personalization Marketing can help American Eagle Outfitters to create more enriching brand experience, more convenient product purchase experience, more accessible post purchase experience that can drive higher customer satisfaction and loyalty among the customers in the Retail (Apparel) industry.

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Factors that impact Personalization Marketing

To build a predictive personalization marketing at scale, American Eagle Outfitters needs three things in the Retail (Apparel) industry – Build a rich database that can provide long loop customer data, use appropriate statistical and machine learning models to derive deep insights, and a operational system that can act on the personalization finding and deliver a rich customer experience.

Predictive Personalization Marketing can help in –

Highly efficient price perception management

– Managing price perception is highly important in the Retail (Apparel) industry. American Eagle Outfitters needs to employ data driven approach to not only manage price perception but also to get the best return on investment on its marketing budget. Often to attract large set of customers or to create marketing buzz, companies allow discount on large collection. This makes managing price and quality perception extremely difficult. Groupon customers suffered from it initially and the company never able to recover from it. Personalization Marketing helps organization to minimize the discounts by providing discounts on products and services that an individual customer values.

Experience differentiation

– Predictive personalization marketing can enable American Eagle Outfitters to provide differentiated experience to different consumers in the Retail (Apparel) industry. For example Netflix and YouTube able to provide differentiated video suggestions to each customer based on their preferences. American Eagle Outfitters can also build a similar experience in both physical and digital world.

Behavior Driven Marketing Efforts

– Consistent data collection mechanism can help American Eagle Outfitters to build artificial intelligence and machine learning based behaviour marketing models. These data oriented models can help the organization to allocate marketing resources based on consumer prior behaviors rather than management hunch or predictions.

KPI driven approach

– Predictive Personalization Marketing approach is KPI driven approach where data is continuously analysed in various different contexts to build a highly relevant KPI that captures consumer behaviour to a great extent.

Reducing Audience fragmentation

– Marketing managers have long faced the problems of audience fragmentation. The growth of mobile phones has reduced that fragmentation to – Segment of One. Predictive personalization marketing can help in building a marketing message that cater to this – segment of one- customer.

Highly relevant flash deals

– Even though flash deals is just a sub-segment of overall marketing and promotional strategies, but it captures the overall essence of personalization marketing strategy. It requires time based relevant marketing effort that can deliver a call to action. If the flash deal is not relevant then customers won’t use it, resulting in highly concentrated marketing expenses.

Consistent and relevant touch points

– American Eagle Outfitters should build its personalization marketing strategy on consistent and relevant data collection. This can help the American Eagle Outfitters to navigate customer journey in Retail (Apparel) industry efficiently and effectively. It will provide the organization consistent set of data to build KPI and predict behaviour based on various data points.

Predictive Personalization Marketing can help American Eagle Outfitters to make product purchase easier, maximise the effectiveness of its promotions and advertising efforts, and improve price perception.

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Challenges to Predictive Personalization Marketing at American Eagle Outfitters

Maintaining a Balance

Building a balance between the analytics and American Eagle Outfitters competitive strategy is the key to efficient and effective personalization marketing strategy. Often only numbers driven approach can lead to highly optimal solutions that can deliver high revenue in short term but compromise the customer overall experience. This can result into long term sales stagnation. In Retail (Apparel) industry, American Eagle Outfitters needs to build a personalization marketing strategy that can build on each customer interaction in a meaningful way with a view to drive customer loyalty.

Defining Customer Values

Prioritizing customer value is a key to differentiation, targeting, and positioning strategy . American Eagle Outfitters needs to clearly define the customer values it wants to target in the Retail (Apparel) industry. For example very often high spending customers are viewed as loyal customers. But this can mean different thing in different context. A single member household or small business buyer may spend less on American Eagle Outfitters products compare to four member household or large corporate buyer, but share of overall basket may be significantly different thus making American Eagle Outfitters products more critical to smaller players.

Purpose and Message Clarity

Predictive personalization marketing efforts at American Eagle Outfitters in Retail (Apparel) won't be effective unless managers at American Eagle Outfitters understand - what is the purpose of personalization marketing messeage, what American Eagle Outfitters want to say and what relationship it wants to have with its customers in Retail (Apparel) industry.

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