The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
With almost 9 million transactions in its marketing database and another 4 million shoppers receiving its e-mail, Alloy puts a heavy emphasis on the web and data-driven marketing to figure out what makes Generation Y tick.
Though it doesn’t break out annual web sales, the Internet is a vital marketing tool to Alloy’s multi-channel retailing program, the company says in its recently filed S-1 papers with the Securities and Exchange Commission.
Last week Alloy Inc., No. 94 in the Internet Retailer Top 400 Guide to Retail Web Sites, filed for an initial public offering for its Alloy Merchandising Group, which sells apparel and accessories to a younger and mostly teenage audience at mall-based stores, catalogs and on the Internet under the brand names dELiA*s, Alloy and CCS.
In its S-1 filing, Alloy says that direct marketing sales, which include catalog and Internet revenues, totaled $134 million in the 2005 fiscal year, $135.4 million in 2004 and $144.2 million in 2003. The IPO papers also give an indication of how important the Internet and data-driven marketing are to Alloy’s multi-channel retailing efforts.
Alloy has more than 31 million prospect names in its customer database and about 4 million Generation Y customers who receive Alloy’s regular e-mail newsletters, promotions, and other content, the company says. Generation Y generally refers to the approximately 60 million boys and girls in the United States between 10 and 24.
Over time about 8.8 million customers in its database have made a web, catalog or store purchase. Because the data is constantly updated and studied by marketing managers for signs of changing customer behavior Alloy, in its S-1 papers, says that it is able to react more quickly to shifting merchandising trends, which is critical in selling online to a youthful audience.
For instance, the retailer is able to minimize its design risk and make final product selections only two to six months before the products are brought to market, not the typical six to nine months required by many apparel retailers, the company says. “We believe this allows us to stay current with the tastes of the market,” Alloy says in its IP0 filing.