Alloy analysis ppt
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Alloy.com conducted an analysis of their marketing strategies and competitors to provide recommendations. They analyzed direct competitors dELiAs and mXg who have larger databases and more touchpoints. Alloy's differentiation strategy focuses on catalogs, newsletters, events, contests and brand awareness through advertising. The recommendations include using catalogs, online ads, emails, events and contests for customer acquisition, retention and reactivation. The analysis shows the marketing investment and average cost for each strategy. It also provides a customer lifetime value analysis showing a cumulative net present value profit over three years.
Alloy analysis ppt
- 1. December 3, 2013 By Adrianna Ryles, Hongqian Su, Chanjuan Zhang, Xiaoshi Zhang Alloy.com: After IPO Marketing Analysis
- 2. Outline • Competitive analysis • Company differentiation strategy • Recommendations 1. Acquisition, Retention, Reactivation 2. CLTV • P & L statement • Summary of recommendations
- 3. Competitive Analysis • Direct competitors dELiAs, mXg bluefly.com • Indirect competitors The mall-based stores Bolt.com, Seventeen, Twist and Jump
- 4. dELiAs Inc. • The largest online and catalog merchant • 20 conventional retail stores • Company website Features Threats • Larger database • Extended product lines (ex: home furnishings) • Online to Offline (O2O) • Many touchpoints (online magazine, other brands, websites, Brick and Mortar)
- 5. mXg Media Inc. • A hybrid of catalog and magazine • Sponsor concerts • Company website • Sensitive to teen girls’ tastes • Many touchpoints (fashion shows, concerts, website etc) • Multiple distribution channels (newstands and bookstores) Features Threats
- 6. Company Differentiation Strategy • Catalogs • Newsletters • Events • Contest • Online ads • Brand recognition/awareness (advertising creates the most revenue) • Customer engagement • Constant communication • Extended database Features Strengths
- 7. Recommendation • Catalogs/Email • Online Ads: Banners, SEMAcquisition • Email • Event • Contest Retention • Letters/EmailReactivation
- 8. $2,600,000 $1,400,000 $1,500,000 $2,000,000 $1,000,000 $1,000,000 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 Acquisition Retention Reactivation Catalogs Online Ads Email Events Contest Letters/Email
- 9. Launch Time
- 10. Acquisition Sources Catalog (print) Online Ads (SEM, Banner Ads) New Customers 35,455 179,226 Response Rate 9% 3% Prospects 393,939 6,288,640 # of efforts 12 9 VC/ effort $0.55 $0.02 Total Marketing Inv. $2,600,000 $1,400,000 Avg. Acquisition Cost $73 $8
- 11. Retention Sources Email (E-Zine) Event-1 Event-2 Contest # Renewed Customers 501,958 486,099 446,477 395,340 Retention Rate 78% 68% 68% 60% # Existing Customers 264,681 714,851 656,584 658,900 # of efforts 52 1 1 1 VC/ effort $0.15 $1.40 $1.52 $1.52 Total Marketing Inv. $2,000,000 $1,000,000 $1,000,000 $1,000,000 Avg. Retention Cost $3.98 $2.06 $2.24 $2.53
- 12. Reactivation Source Letter/Email # Reactivated Customers 660,000 Reactivation Rate 40% # Lost Customers 1,650,000 # of efforts 1 VC/ effort $0.606 Total Marketing Inv. $1,000,000 Avg. Retention Cost $1.52
- 13. CLTV Year Acquisition Year Second Year Third Year 2000 2001 2002 Customers 214,681 175,292 145,493 Retention Rate 82% 83% 85% Orders per Year 3.8 4.4 4.6 Avg. Order Size 75 88 92 Total Revenue $60,379,031 $67,873,224 $61,572,513 Costs 48% 43% 41% Cost of Good Sold $28,981,935 $29,185,486 $25,244,730 Acquisition/ Mkt. Cost $19 $16 $12 Marketing Costs $4,000,000 $2,804,679 $1,745,912 Total Costs $32,981,935 $31,990,165 $26,990,643 Gross Profit $27,397,096 $35,883,059 $34,581,870 Discount Rate 1.14 1.30 1.48 New Present Value $24,032,541 $27,610,849 $23,341,777 Cumulative NPV Profit $24,032,541 $51,643,389 $74,985,167 Customer LTV $111.95 $240.56 $349.29
- 14. P & L Statement
- 15. Thank You