04 Economics Literacy Project
In the article, Jerrika Bloomberg examines how American Eagle Outfitters, a price tag industry, is definitely focusing on developing a new cellular application for his or her consumers. As more than fifty percent of consumers employ their cell phones when they are searching, the retail industry planned to take advantage of this prospect. American Skull cap has included special features like the AEO Radio to be able to reinforce the “in-store” encounter. The store has also experimented with geolocation. In order to increase traffic to get, the store send promotions to a client who is in proximity for the store. Additionally , American Eagle has introduced a brand new feature called “Reserve-Try-Buy” to let customers a chance to reserve an item ahead of time in order to try it upon. American Novelty helmet is currently working on new updates on their commitment program and new strategies to expand internationally in order to increase their revenue.
This case represents the economic rule that everybody faces tradeoffs. The selling company needed to face the choice of how to advertise their company. For example , the corporation had to transact the development of the world wide web apps towards the expansion of native apps. The company noticed that with the focus of native software, their opportunity cost is attractive to a broader range of people since the particular most dedicated customers is going to bother to download the application form. However , the main benefit is more than the opportunity price since the app will increase the engagement of loyal clients with the brand. In addition , this situation represents the economic basic principle that the cost of something is what you give up to get it. Simply by investing their cash into cellular apps, American Eagle provides the opportunity expense of appealing to a group who isn’t very tech savvy (i. e. most grandparents and some parents). However , since their main audience can be people in the ages of 18-25, their audience is likely to be connected to the mobile app. This reveals how this kind of benefit is higher than the cost since American Skull cap has continuing to further invest in their digital strategy. Finally, another economic principle that reflects this situation is that persons respond to incentives. As an employee of this firm, headquarters features reached to all employees showing how to increase targeted traffic within a store since most customers shop online today. By introducing the program “Reserve-Try-Buy”, customers have the incentive to check out the store. It might also press customers to obtain more things within the store and, consequently, increase earnings. Another case is that seeing that there is a higher demand for individuals to shop prove mobile devices, American Eagle has the incentive to purchase their mobile phone application to be able to increase earnings.
This article relates to the concepts that we have mentioned in class. American Eagle happens to be in a monopolistic competitive industry. Therefore , the organization must differentiate its merchandise in order to charm to buyers and have industry power. American Eagle does this by revamping its digital strategy by including the AEO Radio, “Reserve-Try-Buy” program, geolocation, etc . Because of this, the company has the capacity to gain industry power simply by creating a better connection to consumers and broadening the brand encounter to mobile phones. In addition , all of us learned in class about how marketing affects the economy. We discovered in class that companies make an effort to differentiate themselves through design, quality, and location. The use of the portable platform would push American Eagle’s marketing. Through geolocation, the company can easily advertise all their location to their customers in order to increase visitors within the stores.Get your custom Essay