Shopping at American Eagle Gets Tech-Savvy with Google Wallet
Source: Google Blog
American Eagle Outfitters (NYSE:AEO) recently announced the launch of the Google Wallet mobile shopping experience in selected American Eagle Outfitters, Aerie and 77kids stores in five major U.S. markets. [1] Google Wallet is an Android app that enables shoppers to pay for merchandise, redeem discounts and earn loyalty points with a single tap of their phone at checkout. [2]
We believe that this is a smart move by American Eagle as the company targets 15 to 25 year old girls and guys, an age group which represents a major chunk of total smartphone users in United States. American Eagle Outfitters together with Aeropostale (NYSE:ARO) and Abercombie & Fitch (NYSE:ANF) form the teen apparel triad in U.S.
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Amercian Eagle Taps Growing Android User Base
With the number of smartphones users increasing in an exponential manner, retailers want to tap smartphones as a medium to enhance their business. According to a recent Nielsen report published on September 26th, U.S. smartphone penetration stood at 43% in August 2011. [3] Android is the biggest gainer in this surge, leading with a 56% market share in three months recent acquirers. [4]
American Eagle is looking forward to tap this growing smartphone user base with its new offering. To make the experience even more attractive, the company is combining its loyalty program and also issuing promotions with a 15% off on its entire merchandise shopped via Google Wallet. We believe that this move will help American Eagle to strengthen its brand identity in its target customer base, which has one of the highest smartphone penetration demographically. [5]
We currently predict American Eagle’s revenue per square foot to decline in the near term on account of macroeconomic weakness, however this new marketing move by the company may slightly ameliorate its revenue per square foot going forward.
We have a Trefis price estimate of $15.55 for American Eagle Outfitters, which is nearly 25% ahead of the current market price. You can drag the trend lines in the modifiable charts above to see the impact of these trends on American Eagle’ stock value.
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Notes:- American Eagle introduce Google Wallet mobile shopping, Source: American Eagle, October 12th [↩]
- The all new Google Wallet [↩]
- U.S. smartphone penetration, Source: nielsenwire, September 26th [↩]
- Android market share in U.S. smart phones, Source: Nielsenwire, September 26th [↩]
- Percentage comparison of US smartphones owners by age, Source: Online Marketing Trends [↩]