American Apparel (Group 4)

landscape-1444075022-american-apparel

Background of American Apparel

American Apparel is a brand that manufactures, distributes and retails branded fashion basic apparel. Founded by former CEO Dov Charney it is a company that oversees designing, manufacturing and distribution of all its products.

On 5 October 2015, the company filed for bankruptcy, the final wake-up call for management. In February 5, 2016, American Apparel exited bankruptcy after its financial restructuring plan was accepted. With this, the company is now privately owned by its creditors and bondholders Severing ties with all former stockholders as well as ex-CEO and founder Dov Charney.

This study aims to bring a fresh perspective to marketing a brand, particularly after a financial setback, and how a fresh start can be made possible with social media strategies.

American Apparel’s marketing strategies

  • Marketing Strategies before bankruptcy

American Apparel leverages on the old “sex sells” adage, advertisements built on the sex appeal of the models and their clothes. The advertisements are always simple photos featuring all natural, but scantily clad, or sexually charged models. In fact, some of their models are porn stars. In addition, models in advertisements are conventionally attractive, fit into narrow stereotypes of skinny, white. Although this aspect of the brand welcomes the marketing segment American Apparel is pursuing, it seems to isolate many other potential consumers.

This has resulted in very negative sentiments from the public, evidenced in various social media platforms. These negative sentiments were mainly centered on how American Apparel were not body inclusive and overly sexualized, and this was one of the many reasons for American Apparel’s downward spiral.

  • Marketing Strategies after bankruptcy

Post bankruptcy, American Apparel hopes to begin promoting small US manufacturers and collaborating to produce their designs. The company will try to return to its Americana roots by introducing a “Made in the USA” crowdsourcing initiative, in which it will sell small home goods and accessories from local artisans online and potentially within its 109 U.S. stores. Artisans can submit their ideas to American Apparel’s design and merchandising team, which will select as many as 30 winners. The company also plans to sell its first “luxury” T-shirt in premium-gauge knit for $30, and is tapping celebrity photographers, artists and social influencers to promote the merchandise in a new campaign.

American Apparel will still be retaining its sexualized billboard advertisements but they have also put regulations for these advertisements.

Proposed strategies

  • Facebook Strategies

i) Weekly editorial and video piece of genuine employee testimonials about what they love about AA.

Suggestion:

What we suggest is for American Apparel to feature stories and write ups about their loyal and stylish employees; featuring them as brand ambassadors for American Apparel and getting their opinions on what they love about the brand, why they love working for the brand and what they think of new collections.

Analysis & Evidence:

The insider perspective would be perceived by consumers as being more reliable as compared to direct engagement by American Apparel itself. Consumers will have a more positive attitude towards the company when the information is attributed to a peer customer, rather than a corporate source.

By getting employees to contribute in their own unique way with their individual experiences and opinions, the audience will also be left with the sense that the company really cares about its employees, and has a strong employee culture and morale.

By providing a positive insider perspective, this counteracts the previous sentiment that American Apparel was abusing its employees during the Dov Charney era,  signifying a change and raising awareness of the progress that American Apparel has made since bankruptcy.

ii) Full album of new campaign collections

Suggestion:

We would also suggest that American Apparel maximise its use of Facebook’s features and unique selling point of sharing, text posts, full albums and auto-play videos by posting the marketing collateral and editorial stills in a Facebook album for new collections in addition to featuring a full text write up about new collections.

Analysis & Evidence:

As opposed to the single post features of Instagram, launching the collection collateral on Facebook would enable the brand to give a more comprehensive view of the collection and better pique their interest as opposed to a single post on Instagram.

Moreover, with the Share feature on Facebook, which is absent on Instagram, American Apparel would be able to reach more people and generate more hype and buzz about its collection.

  • Instagram Strategies 

i) Adjust post content to show models of different body types and racial diversity #AAInclusivity

Solution:

What American Apparel can improve on and to strengthen its instagram presence is to adjust their instagram campaign to be more inclusive, something that it can achieve by including more models of racial diversity and of different body shapes in its instagram photos for a more inclusive image that appeals to the generation of millennials, the “instagram generation”.

Analysis & Evidence:

As body positivity and body inclusivity has become a major issue in recent years, especially amongst the millennial generation, as a result, businesses which have preyed upon body image insecurity have suffered in the face of the new educated millennial generation, one example of which is Abercrombie and Fitch. that many campaigns on social media are trending about the issue of non-representation of diverse body types in the media. For example, Blink Fitness’ new Every Body Happy campaign is all about inclusivity. Trending hashtags like #effyourbeautystandards (687,000hashtags), #honormycurves (294,000 hashtags), #celebratemystyle (125,000 hashtags) on instagram. E.g. Dove Real Beauty campaign.

ii) Inclusivity by capitalising on OOTD culture & featuring consumers on the instagram page

Solution:

Our suggestion is for American Apparel to capitalise on outfit of the day (OOTD) culture and hashtags where consumers hashtag their instagram outfit posts with “#AAOOTD” such that the team managing American Apparel’s instagram can select and feature the best dressed consumers on their instagram page.

Analysis & Evidence:

This would enable American Apparel’s consumers to develop a positive emotional connection with the brand by including them as part of the creative process in social media content generation that builds in them a sense of ownership towards the brand.

iii) American Apparel can consider using fashion influencers in their campaigns

Solution:

American Apparel also does not feature celebrities donning their apparel as a form of appeal to their target audience who are not as interested in celebrity culture. Instead, American Apparel can consider using Influencers in their campaigns like popular American street style blogger Jenn Im and giving them their own hashtag, #AAInfluencer for their followers to track.

Analysis & Evidence:

By appealing to influencers whose target audiences are of the same age group as American Apparel’s consumers, American Apparel would be able to tap on the influencer’s own fan-base to raise awareness, which acts as a kind of celebrity endorsement, and increase brand engagement since these influencers will enact the engagement that the brand needs.

Snapchat Strategies

Solution:

Instead of merely sharing snaps of behind the scenes of photoshoots and marketing collateral, American Apparel can fully utilise the real-time quality of snapchat to snap the daily life of an employee. They can include the day-to-day events of what an American Apparel employee experiences as well as the employee’s feelings and experiences while working on the job.

Analysis & Evidence:

Tied in with the Facebook strategy, it will lend more credibility to the brand image, in addition to connecting with the consumers and target audience on a more personal level.

American Apparel (Group 4)

American Apparel

landscape-1444075022-american-apparel

Background

American Apparel is a US-based company, which designs, manufactures and sells clothing and accessories for men, women and children through retail, wholesale and online distribution channels. American Apparel is a manufacturer, distributor and retailer of branded fashion basic apparel that operates around 239 retail stores in 20 countries in the Americas, Asia, Australia and Europe.

The company operates its business through the following four segments: U.S. wholesale, U.S. retail, Canada and international.

American Apparel’s U.S. wholesale segment consists of the company’s wholesale operations of sales of undecorated apparel products to distributors and third party screen printers in the US, and online consumer sales to the US customers. U.S. retail segment consists of American Apparel’s retail store operations in the US, which comprises of around 136 retail stores.

The company’s Canadian segment consists retail, wholesale and online consumer operations in Canada. The retail operation in the Canada segment comprises of around 31 retail stores.

American Apparel’s international segment consists of the wholesale, retail, and online consumer operations outside of the US and Canada. The retail operations of segment comprises of around 75 retail stores operating in 18 countries.

American Apparel is unique for two main reasons: Since its inception in 1989, it has been positioned as an environmentally and socially responsible operation. It’s also a domestic producer — a rarity among major U.S. clothing lines — that sells in both the wholesale and retail sectors.

American Apparel’s Downward Spiral

There were 3 major causes to American Apparel’s downward spiral. Firstly, CEO strife led to the severing of ties with all former stockholders as well as ex-CEO and founder Dov Charney. Secondly, American Apparel also had financial issues they had to settle such as legal fees and debt. And finally, they had continued losses in sales that can be attributed to the controversial branding.

The company filed for bankruptcy in the U.S. on October 5, 2015. In February 5, 2016, American Apparel exited bankruptcy after its financial restructuring plan was accepted. With this, the company is now privately owned by its creditors and bondholders, severing ties with all former stockholders as well as ex-CEO and founder Dov Charney.

Despite the large percentage of American Apparel’s customer base, consumers can easily avail themselves of alternative products. This lack of exclusivity can be attributed to the apparel industry being highly saturated and competitive and due to the nature of American Apparel’s low-differentiation type of product; basic apparel.

Among consumers, American Apparel has become a cult brand with a strong Facebook and Twitter presence and 3-year history of creative online marketing ventures, albeit having quite a negative reputation regarding its controversial campaigns.

Research Question

Given this pretext, our group is focusing on rebranding the retailer’s brand image by analysing American Apparel’s marketing strategies before and after bankruptcy and explore how social media can help to reinvent the brand. Our objectives include strategies to improve any negative sentiments post bankruptcy by analysing marketing strategies before and after bankruptcy.

This study aims to bring a fresh perspective to marketing a brand, particularly after a financial setback, and how a fresh start can be made possible with social media strategies.

Marketing Strategies Before Bankruptcy

Pre-bankruptcy, much of the company’s advertising relied on controversial branding. Long known for edgy, sexually charged advertising and store displays, the company lost its grip on the hottest fashion trends and basic retailing strategy, with stores selling the same goods year-round. The racy print advertisements generated lots of publicity for the company, but much of it was negative. In 2015, the struggling brand, which was founded in 1989, spent no money on marketing.

Marketing Strategies After Bankruptcy

The company purportedly ditched the suggestive branding and, in a June 2015 presentation, outlined a new branding strategy that’s in line with a “positive, inclusive, socially-conscious” mindset.

Firstly, the company will try to return to its Americana roots by introducing a “Made in the USA” crowdsourcing initiative. Secondly, the company is also tapping into celebrity photographers, artists and social influencers to promote the merchandise in a new campaign. The marketing strategy includes media buys in print, digital and out-of-home, as well as a robust social media plan.

American Apparel have partnered with the Global Philanthropy Group on issues of women’s rights and LGBT rights, to “take the brand to the next level”. However, this is in contrast to the advertising that they will still be carrying out, where racy billboard advertisements are still a mainstay.

Our Project Outline

  1. Research current social media initiatives on social media, focusing on the company background and articles available on the social media  strategies that American Apparel uses
  2. Identification of flaws by comparing current social media initiatives to that of an ‘ideal situation’ using the framework of “Strategic Options for Social Media Development”
  3. Suggestions by recommending a set of solutions tailored to the company