Build-A-Bear Workshop 2009 Annual Report Download - page 17

BUILD-A-BEAR WORKSHOP, INC. 2009 FORM 10-K
MARKETING
We believe that the strength of the Build-A-Bear Workshop
brand is a competitive advantage and an integral part of
our business strategy. Unlike other mall-based retailers that
frequently use markdowns or sale events to drive sales, at
Build-A-Bear Workshop we use value-added marketing to
raise brand awareness and drive traffic to our stores and
make strategic use of markdowns. Our goal is to continue
to build brand recognition as a destination that provides
affordable, experience-based retail stores that appeal to
a broad range of age groups and demographics.
Since February 2004, we have utilized a fully integrated
marketing program that includes direct marketing, online
advertising, and other components as well as national
television advertising in the United States. Our advertising
expenditures were $24.4 million (6.3% of net retail sales) in
fiscal 2009, $33.4 million (7.2% of net retail sales) in fiscal
2008 and $34.7 million (7.4% of net retail sales) in fiscal
2007, reflecting the continuation and further refinement of
our marketing initiatives.
We employ a variety of different marketing tools and
programs to drive traffic to our stores and raise brand
awareness. We use television advertising that targets both
children and adults to keep our experience and Build-A-Bear
Workshop products top of mind, and periodically feature
specific new product introductions and promotions as a
call-to-action to visit our stores. We also have used radio,
print and online advertising integrating our message across
various touch points to maximize our reach to new and
existing guests. We leverage the database from our
Stuff Fur Stuff club loyalty program of over four million active
members in our direct mail and e-mail programs and
provide information and e-commerce on our website,
www.buildabear.com. In 2009, we expanded our use
of social media to better reach our mom target audience.
In 2007, we created a new extension of our experience
in the virtual world, buildabearville.com, with enhanced
capabilities customization options and social connectivity
features which we use to promote brand connection and raise
awareness of in-store products and events.
Our Stuff Fur Stuff club electronically-tracked loyalty
program was introduced in the United States in 2007 and
rolled out to Canada in 2008. The program is designed to
reward repeat guest visits. The program currently provides
one point for each $1 spent, with a $10 discount certificate
awarded for every 100 points. The data collected gives us
insight into the overall purchasing history of members
including visit frequency, items purchased and amounts spent
on each visit and cumulatively over time. We continue to
leverage this information and improve our direct mail
effectiveness and response rates through additional targeting
and personalization of communications and offers. We
launched a version of the Stuff Fur Stuff program in the United
Kingdom in fall of 2008.
We leverage our marketing initiatives including direct
mail and e-mail communication programs, print advertising,
in-store events and public relations in our European operations
to raise brand awareness in our countries of operation and
drive traffic to our store locations. We expect to continue to
expand and enhance our European marketing initiatives to
continue to grow our business.
LICENSING AND STRATEGIC RELATIONSHIPS
We have developed licensing and strategic relationships with
some of the leading retail and cultural organizations in North
America and Europe. We believe that our guest base and
our position in our industry category makes us an attractive
partner and our customer research and insight allows us to
focus on strategic relationships with other companies that we
believe are appealing to our guests. We plan to continue to
add strategic relationships on a selective basis with
companies that have strong, family-oriented brands and
provide us with attractive marketing and merchandising
opportunities. These relationships for specific products are
generally reflected in contractual arrangements for limited
terms that are terminable by either party upon specified
notice.
Product and Merchandise Licensing. We have key
strategic relationships with select companies, including World
Wildlife Fund US and Canada, Skechers, Sanrio®, the NBA,
the WNBA®, MLB, Justice stores, Disney®, NFL, the NHL®,
FIFA and First Book®, in which we feature their brands on
products sold in our stores. These strategic relationships
allow both parties to generate awareness around their
brands. We have also offered selected character-oriented
products including Disney’s JONAS, Fox’s Alvin and the
Chipmunks, The Squeakquel, Nickelodeon’s iCarly as well as
the classic movie character, Frosty the Snowman®.
Promotional Arrangements. We have also developed
promotional arrangements with select organizations. Our
arrangements with Major League Baseball teams, including
the Chicago Cubs®, St. Louis Cardinals™ and New York
Mets®have featured stuffed animal giveaways at each club’s
ballpark on a day in which our brand is highly promoted
within the stadium. In 2009 and 2007, we partnered with
McDonald’s®to feature limited edition, collectible mini
Build-A-Bear Workshop animals in Happy Meals®. We also
have had arrangements featuring product sampling, cross
promotions and shared media with companies such as
Macy’s and Shutterfly as well as targeted promotions with
key media brands like National Geographic Kids®, Good
Housekeeping and Radio Disney.
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