Top Retailers Using Social Media to Target Trends and Consumers

June 25, 2014 by Trey Thoelcke

Social media has exploded onto the advertising arena as a new and powerful way to target buyers. As companies continue to evolve marketing programs targeted toward Millennials, social media upstart Instagram is growing in importance as a preferred channel of advertising with teens.

A new research report from Piper Jaffray presents results from a teen survey selecting Instagram as their top social media site. They also highlight six top retail names exploiting the youth and other age bracket embracement of not only Instagram, but the other top social media sites as well.

Aeropostale Inc. (NYSE: ARO) has been in a freefall, and improving its presence via social media platforms may help the struggling franchise turn around. Many feel that the company is ripe for a buyout and takeover. Aeropostale is one of the major players in the teen retailing space, operating a network of more than 1,000 stores under its Aeropostale and P.S. by Aeropostale brands. The company’s historical ability to attract a growing and loyal customer base to its trendy apparel offerings gave it a highly profitable business model that fueled a rapid expansion around the country — a solid reason for a buyout scenario. The Thomson/First Call price target for the stock is $5.50. The stock closed Tuesday at $3.44 a share.

Abercrombie & Fitch Co. (NYSE: ANF) shows up well in the social media race, especially on Facebook, with 19 million followers. The company has slowly but surely started to rebuild what once a very dominant brand. Its social media presence is cited as helping boost the image and sales. Investors are paid a 1.9% dividend. The consensus price target is $43.53. The stock closed Tuesday at $42.74.

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L Brands Inc. (NYSE: LB) has the highest number of Facebook fans, with a total of more than 45 million spread across its multiple brands. With beautiful Victoria Secret models to grace some of its pages, it is probably not a huge surprise to anybody. L Brands also has the most Twitter followers at 4 million, and the second most on Pinterest and Instagram with 1.8 million each. The company pays investors a solid 2.4% dividend. The consensus price target is $61.33. L Brands closed Tuesday at $58.

Michael Kors Holdings Ltd. (NYSE: KORS) has been a hot retail name in clothing and clothing accessories, and it could be the epitome of the social media advertiser. As one of the fastest growing luxury brands in the world, the company has the cushion of the high-dollar consumer, but that has not stopped it from pursuing an aggressive social media branding and sales agenda. The consensus price target for this very hot momentum name is $108.91. Shares closed Tuesday at $88.36.

Urban Outfitters Inc. (NASDAQ: URBN) is another trendy name that has battled consumer perception and tastes in the revolving door of the fashion world. Its Instagram efforts combined with other targeted media have slowly started to bring consumers and sales back up. The consensus price target for the stock is $42.23. Shares closed Tuesday at $34.02

Pacific Sunwear of California Inc. (NASDAQ: PSUN) has been hit, and many think the time may be right for aggressive buyers. The company operates in the action sports and fashion segment, based on the influences of the California lifestyle. It sells branded and proprietary apparel, accessories, and footwear for teens and young adults out of mall-based stores under the brand names of Pacific Sunwear and PacSun. The teen appeal of the retailer makes social media a perfect outlet, especially when discounting and offering seasonal sale items. The consensus price target for the teen favorite is $3.55. Shares closed Tuesday at $2.31.

The sheer penetration of social media outlets to all demographics and age groups makes it a cheaper and easier way to target consumers. With mobile applications becoming better with each passing day, this powerful advertising forum will only continue to grow its already ubiquitous presence.

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