Rue 21 2010 Annual Report Download - page 15

conventional advertising, but instead employ a viral approach to marketing that is designed to capture the interest of
our customers and drive them into our stores. For example, product knowledge, trend statements and fashion blogs
are posted daily through Facebook, Twitter and YouTube. Our rue21.com website reinforces our brand image and
allows us to reach our customers in a fun and interactive environment. Website promotions and contests are an
added incentive to motivate teens to share their voice. In addition, email campaigning is used to send “e-blasts” on a
regular basis to customers who have provided their email addresses to us though our website or in-store collection
processes. The “e-blasts” highlight key trends, new products and promotional events to drive our customer back to
our stores.
In addition to using our website and social networking to promote our brand image, we employ a community-
based marketing approach to building brand awareness and customer loyalty. We often initiate marketing efforts in
concert with the local shopping center management in advance of opening our stores. At a store level, we reinforce
our brands through in-store signage, events, and product labeling.
Our coupon programs encourage repeat business from our customers. We have built an extensive coupon
program, which is strategically planned during select time periods of the year to maximize sales, traffic and
customer loyalty. During an event, coupons are distributed in stores to our customers to generate repeat traffic and to
provide us with information as to customer spending, shopping patterns and habits. Hiring the right people is a
brand building tool in and of itself. We seek to hire a diverse, energetic, enthusiastic, trendy, passionate and
knowledgeable group of individuals to be a part of our team. We promote individuality by welcoming diversity,
keeping an open mind, and valuing different points of view.
Distribution
We distribute all of our merchandise from an 189,600 square foot distribution and office facility located in
Weirton, West Virginia. Substantially all merchandise arrives at our distribution facility pre-ticketed by our
vendors, which allows for a quick turn around time and reduced internal labor. In general, the merchandise is
received, sorted by stock keeping unit, or SKU, based upon class, vendor and style, and packed in to shipments for
each store based on a predetermined allocation plan. The distribution facility then uses an automated sorting system
for separating shipments by store. Merchandise is shipped to our stores daily via a third-party delivery service to
ensure a steady flow of new products to our stores. We enhanced our packing operations in 2009 and have the
packing capacity to support 1,300 stores. We continue to pursue several supply chain initiatives that will allow us to
support our growing store base without sacrificing efficiencies, including a planned expansion of the current
distribution facility footprint to 360,000 square feet.
Management Information Systems
Our management information systems provide a full range of business process support and information to our
store, merchandising, financial and real estate business teams. We believe the combination of our business
processes and systems provide us with improved operational efficiencies, scalability, increased management
control and timely reporting that allow us to identify and respond to trends in our business. See “Risk Factors — We
rely significantly on information systems and any failure, inadequacy, interruption or security failure of those
systems could harm our ability to effectively operate our business.”
Competition
We believe rue21 is specialized in its ability to operate successfully in many different types of markets,
including small or middle markets where there is limited direct competition.
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