2020 ADVERTISING STRATEGY

W H A T T O E X P E C T

EXECUTIVE 04 SUMMARY

05 SITUATION ANALYSIS

21 KEY INSIGHTS

22 BIG IDEA

CREATIVE 23 EXECUTION

26 MEDIA IDEAS

MEASUREMENT & 27 FUTURE RECCOMENDATIONS Our Team

T H E A W E S O M E P E O P L E B E H I N D T H I S P R O J E C T

R O B Y N A R C H E R R A N I C H A N P E T E R N O R T H F E L T C H R I S T I N E L I U SHE/HER/HERS SHE/HER/HERS HE/HIM/HIS SHE/HER/HERS

Robyn Archer Peter Northfelt Robyn is a brand strategist with almost three Peter is an aspiring brand strategist and years of agency experience. She is working to advertising researcher, graduating from UT finish her master's degree at the University of Austin’s master’s in advertising program in at Austin and will graduate in May May 2020. His experience and expertise 2020. She tells too many dad jokes and she ranges from travel research to QSR brands, can whip out a random, fun-fact about almost sports media to experimental storytelling and any subject. Robyn aspires to be the CEO of creative brand strategy. He’s planning a move an advertising agency in the future. to Los Angeles with his partner and cat, Tex.

Rani Chan Christine Liu Rani is an aspiring brand strategist, a food Christine is passionate for creative strategies. enthusiast, and a fashionista at heart. She She is always finding ways to connect brands specializes in market research, consumer and consumers meaningfully in hope to solve behavior, and social media marketing. She social issues. She values life experience and was born and raised in the Philippines and looks for the smallest enjoyment in life. She will be graduating from UT Austin with a would one day want to travel around the Master’s degree in Advertising in May 2020. If world to try all the food. she is 0no7t busy learning new cultural trends, she is watching Broadway musicals and cooking new and home recipes. Executive Summary

Nobody’s born creative. But Michaels’ audiences are the crafters, the ideators, the makers, and the inspired. They’re passionate about brands that are online, in their lives, and most importantly take a stand on everyday issues such as diversity and inclusion.

The Big Idea: “Create it yourself”

Our campaign celebrates makers in bold storytelling and activations in hot markets across the . We also propose a seamless digital and brick-and-mortar integration so that it’s easier than ever to go from digital to in- person and back again for Michaels makers.

While makers have a variety of companies to buy supplies from, Michaels is a brand that supports and inspires more than any other.

Company Objectives

Get Makers to come back to Michaels Bring our new community-first strategy and brand purpose to life Make Michaels a loved brand

2020 ADVERTISING STRATEGY / PAGE 4 Situational Analysis

In order to understand the problem, we looked at Michaels from four different angles.

Company Competition Who are we? What are we up against?

Consumer Culture Who are we What's going on? talking to?

2020 ADVERTISING STRATEGY / PAGE 5 C O M P A N Y P R O F I L E

The Michaels Companies Inc. stands as the largest arts and crafts specialty retailer in North America, with over 1,200 stores across 49 U.S. states and Canada. They serve to be a one-stop supplies shop for a wide range of craft supplies and interior decorations. Being physically ever- present in people’s neighborhoods with all their craft needs makes accessibility and convenience some of Michaels’ key strengths. Michaels puts creativity at its core, from holding Community Classrooms to teach a variety of craft skills, to starting the viral #MichaelsChallenge on social media back in 2018. They are also historically customer-centric by tailoring products and services according to value and customer demand by providing reasonable prices and weekly sales for their products. They have reached audiences digitally through their app, social media channels, and website. Moreover, in 2018, Michaels partnered with Salesforce to deploy the Salesforce Marketing Cloud, which would enable personalized content, promotions and offers to Michaels customers. Among other arts and crafts specialty providers, they have been a leader in offering advanced craft making technological tools and services through its subsidiaries Aaron Brothers Custom Framing, Artistree, and Darice, and vendors like Cricut.

A major strength of Michaels is that they root themselves in diversity and inclusion (D&I) both internally and externally. The company has their own D&I communication committee that works to integrate diversity and inclusion within company communications, programs, and strategies. They have resource groups and other training programs for their employees that support different interests, such as the Women Inclusion Network program, and consequently increase D&I in the workplace. Michaels has also publicly stood by their belief that “[they] are a company that is truly rooted in diversity and inclusion. [They] have a firm belief here that anyone can make thread, and anyone should have the ability to be creative and express themselves, regardless of race, sex, gender, or other characteristics.” This is evident in their most recent participation in the “Open to All” nationwide campaign, where businesses and other organizations open their doors to all customers and pledge to ensure and maintain a safe and welcoming environment for their employees, vendors, and other constituents, regardless of personal characteristics (e.g. religion, race, gender identity, disability, etc.). C O M P A N Y P R O F I L E

“It was important for us as a company to make it known and be a leader in the space when it comes to protecting people, whether our customers or team members, from discrimination, and making sure we are a clear advocate for diversity and inclusion. Those are policies we really lean into, from our CEO on down." - Mallory Smith, Public Relations Manager for Michaels

The strengths of Michaels may often be overshadowed by some prominent concerns. First, Michaels had a late start into the e-commerce market, only officially entering the game in 2014. Consequently, Michaels took a major hit in 2016, meeting declining sales and market shares. Today, even after Michaels caught up with digital sales and have been increasing their product assortment online, e-commerce represents only a small portion of their sales (4% of their $5.2 billion sales in 2018). Thus, there is an opportunity to take further advantage of e-commerce as Michaels’ key competitors (i.e. Amazon) continue to thrive with increasing online revenue. Another major concern of Michaels is that despite Michaels’ firm belief in diversity and inclusion, Michaels often misses this in their marketing strategies, particularly their advertisements. Their TV spots typically show white parents and children, if they show people at all. In the very few occasions that they feature people of color, the imagery becomes more a token representation of minority groups. Furthermore, as today’s society becomes more oriented towards storytelling in ads, Michaels still lacks narratives in their TV spots. Instead, Michaels heavily focuses on sales promotions, which loses the opportunity to connect with their audience at a deeper level. Finally, despite having different business practices compared to their direct competitors like Hobby Lobby, particularly on D&I, people oftentimes perceive Michaels to be similar to Hobby Lobby in having a conservative point of view, which could negatively affect brand attitude towards Michaels and their sales. Michaels needs to be bolder in positioning themselves as aesthetically and personally distinct from Hobby Lobby and their other competitors.

I N T E R V I E W I N S I G H T S

After conducting over 50 interviews with consumers we found that over half of our audience feels that Michaels and Hobby Lobby are difficult to distinguish one from the other. From those that can identify the differences, Michaels is the more favorable brand, not because they prefer Michaels but because of Hobby Lobby's company views. One customer, Mingo Villarreal said, "I love Michaels because even if I don't know what I want or what I should get, the staff always makes me feel like I don't have to know. They are super helpful and understand my needs without making me feel small."

2020 ADVERTISING STRATEGY / PAGE 7 IF MICHAELS WERE A PERSON

We asked 30 respondents the question, "If Michaels were a person, how would you describe them?" Below are a few of the responses we received.

"He's the guy who tries to fit in with all different groups but hasn’t found one that he’s accepted in."

”A guy with custom, wooden framed glasses, a custom- designed polo and dark jeans with leather dress shoes. Personality would be helpful as fuck. Definitely a Taurus. Creative af and probably a mommy’s boy. He would give very thoughtful and sentimental gifts and would likely be vegan.”

“Male who dresses quirky/preppy (tailored flood pants, oxfords, crazy printed socks, floral and collard shirts), friendly, 30s-40s, homosexual, petite but built frame, but shorter and not super buff. Majored in interior design with an art history background. Outgoing but not in an adventurous way. Not a backpacker but more in the social way. Likes routine, precision and comfort. Likes his urban, metropolitan lifestyle but knows how to appeal to rural homemakers.”

“Annoying person that gets excited about arts and crafts and explains way more than you want to hear, but doesn’t get the hint when you try to walk away.”

”Loves watching cooking shows and enjoys cooking and baking in their spare time”

“Wears decorative scarves in the summertime for fashion… kinda like a white Carlton” (from the Fresh Prince of Bel-Air TV Show).

"A brunch kinda guy and not into sports. Would watch the national dog show over the Super Bowl. Possibly knows how to juggle as a secret talent." COMPETITION

What are we up against?

We identified both direct and indirect competition. Direct competition includes other crafts stores such as Hobby Lobby and Jo-Ann’s. Our indirect competition consists of major retailers who do not focus solely on arts and crafts but do sell the supplies. These are stores like Walmart, Target and Amazon. Currently, Michaels is the leader in the market against their direct competition with 15% more people saying they buy their arts and crafts supplies from Michaels. However, the same percentage of purchasers say they buy their supplies from mass merchandisers, such as, Target and Walmart, as they do from Michaels.

91% of arts and crafts consumers say they buy their supplies in store.

2020 ADVERTISING STRATEGY / PAGE 9 P R O F I L E

Hobby Lobby is an arts and crafts store that is most similar to Michaels. They are the largest privately owned arts and crafts retailer in the world. Based in Oklahoma City, they are known for their home décor as well as their crafting supplies.

Hobby Lobby was built on the conservative, religious beliefs of the founders. They are affiliated with the Christian bookstore Mardel Christian & Education. Their religious beliefs were highlighted in the Supreme Court case they won in 2014, which granted them the right to refuse to cover contraceptives under their employees’ health insurance. Hobby Lobby has also advocated against anti-discrimination laws in the defense that it violates their religious freedoms. A portion of their profits are also donated to back a political network who engages in pushing a Christian agenda into American law.

S E R V I C E S

Home Decor Fabric & Sewing Custom Framing Scrapbook & Paper Crafts Crafts & Hobbies Yarn & Needle Art Floral & Wedding Wearable Art Party & Baking Seasonal Art Supplies Beads & Jewelry

I N T E R V I E W I N S I G H T S We conducted over 50 in-person interviews to understand our consumers' perspective on the competition. We found that many people believe that there are very few differences between the two craft stores, except that Hobby Lobby has more Home Decor items and has cheaper compared to Michaels. Over 65% of our respondents believe that Michaels has the same conservative, Christian values as Hobby Lobby. Advertising

Hobby Lobby's advertising is done by the Richards Group out of Dallas, TX. Their print ads are mostly coupons or highlighting the sales they are having. However, for their commercial spots, they take an emotional approach to their narratives. Diversity is lacking in their spots. There aren’t many spots with people of color and if they are shown, they are not a main character.

The Christmas campaign for 2019 features a spot called "Christmas is What You Make It” which focuses on a single mother raising her teenage son. The mother is shown working hard around the house and then rushing to work. While the mother is working the boy pawns his gaming controllers for some extra money. When the mother comes home he has decorated the house and put up the Christmas tree to surprise her.

Another spot from their Spring campaign features a dad away from his family somewhere in the snow. He receives a package with items to remind him of the season and he puts them up around his place and it brightens up the space.

2020 ADVERTISING STRATEGY / PAGE 11 IF HOBBY LOBBY WERE A PERSON

We asked 30 respondents the question, "If Hobby Lobby were a person, how would you describe them?" Below are a few of the responses we received. "Overbearing, preachy, librarian wearing horn-rimmed glasses, hair in a tight bun, and wrinkles around the mouth from constantly pursing her lips in disapproval of nearly everything."

"Definitely a middle aged woman in the 40s-50s age range. Dresses frumpy and doesn't pay much attention to her wardrobe, or even that of others. Lots of free, oversized T- shirts she's collected from random events, leggings and mom jeans, and a varying collection of Crocs. Booster Club/PTO mom, who is at times perceived as 'having let herself go.' She's on top of everything crafty and anything that requires her hands. Her kids always excelled at all the class projects and science fairs because she pulled all nighters putting their projects together. Contributes to most school sporting events, like working the concussion stand, even though her kids don't play sports. Suburban, comfortable life. Lives in a two story house and despite her husband's reluctance, she converted a spare room into a storage and craft space. She likely sold Avon and Scentsy products when her children were younger.

"Hobby Lobby is just a sign that says 'in this house we serve the Lord' in comic sans."

"She's either extremely organized or an extreme hoarder but nothing in between."

"Writes her name on every side of her Tupperware so when she cooks for people they know to bring it back to her."

"She's now a huge fan of Kanye and will openly start debates about it on Facebook."

P R O F I L E

Although they are not direct competition, Amazon has revolutionized the retail industry and is a major competitor in almost every category. The digital platform makes buying easy, without ever having to leave your home and also saves you money. However, there is lag time between purchase and delivery and the chatbot lacks a human touch component that consumers still crave.

The company has been in the spotlight for many years in regard to the way they treat their employees. Although they are known to be one of the most customer centric companies, they are also known for treating their employees like robots. In July, a group of Amazon warehouse workers protested against what Time Magazine called, “the day-to-day dehumanizing reality of their workplace.”

S E R V I C E S

Amazon Prime Kindle E-readers & Books Prime Video Home, Garden & Tools Amazon Music Handmade Echo & Alexa Sports & Outdoors Fire Tablets Home Services Fire TV Food & Grocery

I N T E R V I E W I N S I G H T S We conducted over 50 in-person interviews to understand our consumers' perspective on the competition. We found that although they still buy from Amazon, consumers don't think very highly of the brand. When asked specifically about arts and crafts supplies, about 85% said they would rather see and feel the supplies before they purchase them. This is reflective of our quantitative research that in the arts and crafts industry the majority of sales take place offline. Advertising

Amazon created a spot this year, perhaps solely to combat people’s perspective about what working for them is really like. The spot features testimonies from warehouse employees who talk about how much they love their jobs and the company. The spot does feature a lot of diversity including a transgender person. Trans and non-binary or genderqueer people are not historically represented in mainstream media, so for Amazon to not only show them, but also allude to the support Amazon provides for transgender individuals, is very forward thinking on their part.

Their “Happy Holidays” spot for 2019 features the song Everybody Needs Somebody to Love. This spot has many different narratives throughout. From little kids singing in a play, to a meet-cute on the train, a tone-deaf person singing off key on the bus and even an LGBTQ+ couple kissing at the airport. Amazon does a great job with diverse representation in their advertising and is one of the leading companies featuring the LGBTQ+ community.

2020 ADVERTISING STRATEGY / PAGE 14 IF AMAZON WERE A PERSON

We asked 30 respondents the question, "If Amazon were a person, how would you describe them?" Below are a few of the responses we received.

"An obnoxious body-building narcissist who is likely to mansplain mansplaining to you just to prove how ‘woke’ he is.”

"A white male. Heterosexual. Finance and bro-ish. Likes luxury but also takes those adventurous trips to Thailand, Madagascar and Argentina. Wears a combination of untucked half sleeved collared shirts as well as Henleys and Patagonia vests. Things come easy to him. He never had to study but always got straight As. A beer drinker but will have an occasional Jack and Coke. He was definitely in a frat, probably TKE (the rich white boy frat) but he never let his socializing get in the way of his academics.”

“Like an evil superman character, perhaps played by Chris Pratt (Fit Chris Pratt.)”

“He would look like Marlon Brando from the Godfather. Probably be in the Italian mafia.”

"He'd be a Scorpio for sure."

”They would be the person that comes in right when you’re about to close and demand to sit in the section that you just finished cleaning.”

“He’s social but overbearing. He always has a story about everything and its always just to one up your story.”

“Appearing kind and generous so people like them, but are actually conniving and sneaky.”

"He’s the guy in the park selling Rolex watches out of his trench coat. You’re not sure if they are stolen or just fake but its too good of a deal to walk away from.” P R O F I L E S

JoAnn Fabric and Craft Store is another direct competitor, however, they specialize in sewing and crafts. Although they offer other crafts as well, consumers view them as a fabric store.

Target and Walmart are indirect competitors as they are mass merchandisers. Walmart has become a less quality brand over the years. Target has become known to be the "chic" alternative to Walmart.

A D V E R T I S I N G

JoAnn hasn't created a new spot since 2016. They don't actively advertise on television. They do a lot of print advertising similar to both Hobby Lobby and Michaels with a focus on coupons and sales.

Target's televisions spots have a fun-spirited attitude and modern look to them. For the 2019 holiday season their ads are featuring music by Sam Smith, an artist who came out as non-binary earlier this year.

Walmart uses both comedic and emotional narratives in their ads and features spots breaking gender stereotypes. The Thanksgiving spot for 2019 featured a father and son making Thanksgiving dinner. They feature interracial families, and cast diverse talent. CONSUMER

Millennials are referred to as "the crafting generation" so to further our understanding of their shopping habits and how they relate to brands we did a deep dive exploration of this audience.

As a market of crafters, AFCI reports that 62 percent of all U.S. households participate in one crafting hobby, but a shocking “39 percent participate in two to and 45 percent are involved in five or more creative hobbies.”

Lucky for Michaels, The largest percentage of crafters (41 percent) are millennials, between the ages of 18-and-34 years old. In addition to being the largest group of people that participate in crafting, millennials over-index in terms of their share of the population that crafts, as shown in the table below. Consumers have a large interest in crafting that spans disciplines, but the challenge for stores is to attract them in a purchase journey that matches their purchase preferences.

Let’s start in the store. Grow wire states that, “56 percent of millennials said they shop in stores at least once per week.” Even more encouraging on the retail/brick-and-mortar front is that “Older millennials—those ages 32 to 37—make 43 percent of their purchases in stores and 57 percent online, making that group the most likely to shop in stores…” This group of people are interested in retail, and Michaels has the opportunity to position itself to serve digital and physical audiences in tandem.

We can establish that Michaels physical stores are part of the shopping set in our target. reports that these stores are actually an asset and are useful to Millennial shopping habits. They say: “You want to touch it; you want to smell it; you want to pick it up.” This is part of a larger idea that millennials enjoy experiencing the product before purchasing.

They say: “You want to touch it; you want to smell it; you want to pick it up.” CONSUMER

THE DIGITAL NATIVES

Even though the store experience is critical to our target consumer, they are still using their smartphones and tablets even while shopping in stores. They read reviews, research products and compare prices. Millennials are constantly browsing, even when they do not intend to purchase a particular product. It’s in their social media feeds, and for brands, content is king when it comes to owned and paid channels of distribution. Social media can lead to a 24/7 shopping habit; where millennials are constantly looking ETHICS OVER PRICE at products, but not necessarily making regular purchases. It’s key that Michaels exist in channels where Millennials are Finally, we have found that there is constantly looking — literally 24/7. significant attention paid to the ethics of a brand. A study by LavaReviews found that over 30 percent of millennials avoid buying products and services from Millennials would switch companies that didn’t meet their 91% brands to one associated expectations of ethical social practices. In with a cause. fact, Millennials actually prefer brands who take a stand for something. About 60 Millennials use social percent of our target thinks that diversity media to engage around is a good thing, and are increasingly open 66% Corporate Social to LGBT people and people of color living Responsibility more integrated and celebrated lives. It’s in this radically changing social Millennials are willing to environment that Michaels can position 62% take a pay cut to work for a itself in the minds of this established responsible company. target market.

CONCLUSION

Traditional retail is not dead. In fact, Millennials prefer in-store purchasing to online, especially when it comes to arts and craft supplies. However, having a digital presence is vital for reaching an audience. In order to break through the noise, brands need content that evokes emotion. Millennials want to see the brands contributing to the betterment of society, as long as it is genuine and authentic. They are 16 percent more likely to share branded content than any other generation. It is our job to create content that shareable. CONSUMER

MICHELLE RAUL Lives in Chicago. Older millennial at 35 Lives in Miami. Crafting realist, and years old. Considers herself a home overwhelmed when he visits retail brick decor maven, and uses social media to and mortar stores. For this reason, he constantly scroll and get inspiration for curates a diverse set of DIY, craft, and her new home. Even when she’s not interior decorating blogs, newsletters, consciously shopping, she is embedded and social media feeds so that he can see in online communities that show the trends and be inspired. He does not process and product, so she knows distinguish between branded and quality when she sees it in a store. She unbranded content, and just wants visits in store to see the quality of her quality served to him. Because he is shy purchases, and goes in with a general about in-store experiences, he wants to idea to be inspired by. She asks for help be welcomed with an experience and in store, but only if she needs to know glide path from his mobile world to the where something is. She is a single mom check out counter. He is not loyal to of a preschooler and is starting to look for Michaels and searches for the best deal crafts she can do with him. She has no online and in store, but is willing to spend idea what she would do without Michaels a little bit more if there is a coherent and visits at least quarterly, but even online experience that translates into a more frequently during the holiday store or retail environment. Raul cares decorating season. Her current Michaels passionately about diversity and experience is centered on coupons, and inclusion, and it is a frequent topic of she wishes Michaels had more resources online conversation for him. He expects for her to give her ideas or keep her and demands brands to be on the right inspired. She took her son to Chicago side of history, and though he is open to Pride last year, her first Pride Parade. As different brands, he refuses to shop at an HR consultant, she is passionate about Hobby Lobby because of their inclusion in the workplace and wants her viewpoints on anti-discrimination laws. son to grow up understanding how Raul does home improvement/decorating imporant diversity is. She looks to buy and crochets to express himself and it is a brands that show ethical practices for hobby he enjoys keeping to himself. their employees, their customers and the environment. CULTURE

What's going on in the world?

In an age where gender stereotypes are being challenged, gender as a binary is also being challenged. Over 50 percent of Millennials see gender as a spectrum, while over one-third of Gen Zers already know someone who uses gender neutral pronouns. Companies are creating environments where people can not only feel comfortable identifying their pronouns, but feel invited to do so. Pronouns are being included on name tags at networking events and on email signatures. According to the Pronoun Project, if we allow people to feel represented and respected authentically, we can establish a real and personal connection between brands and consumers.

78% of Millennials believe brands should seek to challenge gender stereotypes.

Should advertising simply reflect inequalities or does it have a responsibility to drive equality?

I don't know 17%

Should reflect inequality 18%

Has responsibility 65% Three Key Insights

Millennials are the crafting generation and prefer brands that stand for something. Michaels does stand for something, however, almost half of their consumers think they are aligned, with the conservative, religious beliefs of their competition. Michaels needs to be vocal about their position. Millennials are the most open- minded, diverse and progressive generation of all time. Millennials understand the importance of diversity and inclusion. They are not only accepting of people who are different than them, but they prefer to build diverse friend groups. Being non-binary can feel like you are DIYing your own gender. As a non-binary person in a gender binary society, you have to create your own gender expression and build a space for you to belong.

2020 ADVERTISING STRATEGY / PAGE 21 The Big Idea

Create it yourself.

No one is born a creative. Creativity is a seed inside us all and those of us who create, water it. We choose to make our life more interesting, to color outside the lines, because we see a bigger picture than what is outlined before us. We don’t see creativity as black and white, we see every color working together in harmony. We are the artists, the engineers and the hopeless romantics. We are the doers because we believe in ourselves. We explore our curiosities and see each topic we are unfamiliar with as a brand new adventure. We refuse to accept the world as it is, instead, we take it upon ourselves to design the world we want to live in. We just create it ourselves. We are the creators. #createityourself

Positioning

For those who choose to color outside the lines, Michaels is the creative guru to the artist, the engineer, and the romantic in us all by providing support, guidance and a community of creators that ignites the fire of our own creativity.

2020 ADVERTISING STRATEGY / PAGE 22 Creative Execution

How the idea comes to life.

Our campaign launches with the TV spot below, to create a buzz around Michaels. Other spots will feature similar narratives inspired by stories where people can't find what they need.The goal of these TV spots is to personally connect with audiences and show that Michaels not only understands but also is actively providing a welcoming community within the store and supplying them with tools that will inspire, empower and help them boldly express themselves. Aside from the spot shown below, another spot idea for this campaign is a man standing alongside his girlfriend as she works hard in school and daydreams of becoming the first female president. He goes to Michaels and makes her first Presidential Campaign sign. These spots will also be featured across Michaels’ social media pages with the hashtag #CreateItYourself, with the goal of creating buzz and sharing the content from peer to peer.

The spot starts on our main character She shops both online and in-store and is realizing she has a wedding to attend that is unable to find what she is looking for. coming up soon.

So she decides to create it herself. She goes We show her making a wedding gift for a to Michaels and makes friends in the Cricut non-binary individual. aisle.

The last scene shows her leaving for the The last scene fades out to a black screen wedding with her handmade wedding gift. that says "If it doesn't exist, create it yourself." Followed by the end card with the Michaels logo and #CreateItYourself.

2020 ADVERTISING STRATEGY / PAGE 23 CREATIVE TESTING

We asked respondents, both cis-gendered, non- binary and trans how they felt about the spot. Some of their responses are below.

"I love the tag line because that's what it feels like to be non-binary a lot of the time. You have to create your own space, presentation and gender."

"I love how relatable the story is. I have non-binary friends and I've seen them struggle to find their place. This idea tells that story."

"That is such a cool idea. You don't see any other brands doing that."

"As a non-binary person, I would feel so seen by that spot. It's not a cheesy or forced idea. Its so genuine."

"I can't imagine living in a society where you don't fit in. It's so important that these people have a voice, otherwise change will never happen."

"That's such a beautiful idea. Brands calling out society for being in the wrong is so cool to me."

"Sometimes people forget that there's so much more to it than just figuring out what bathroom to use. It's everything, everyday. A spot like this is so empowering."

"The story is so perfectly aligned to what Michaels does. Michaels is there to help you create, whether that is creating yourself or your projects."

"To be honest, I get so excited about the future when I hear about inclusive stuff like this." Activation

The Launch

To lean into Michaels’ position on diversity and inclusion, our team plans to launch a place-making activation where local LGBTQ+ artists and other community members work together to create a grand mural in a public space. The launch of the activation will take place around Pride Month and in New York City. The choice to install the activation in New York is based on the heavy concentration of Michaels stores in the state and New York being one of the most LGBT-friendly states. The activation will take place in a public space where millions of people would come to visit, such as Central Park or Columbus Park. More importantly, street artists, musicians, and other performers are often seen in these locations, making it ideal to install an art-related piece in those locations. The event will be led by local LGBT artists. Together with other locals and visitors of all ages, races, gender identities, etc, they will create the largest ground mural that features LGBT leaders and icons. Michaels will be there to provide all supplies and basic necessities for people to join in the fun in creating the mural. Michaels will invite news reporters to cover the launch. They will also encourage visitors to post pictures on social media of the mural at each stage of the process with the hashtag #CreateItYourself. This would generate impressions and engagement and increase positive brand sentiment towards Michaels. After the launch, the activation can also be replicated in other LGBT- friendly and Michaels-heavy cities like Miami and Chicago. Overall, with the display of colors and the craftsmanship of these artists and visitors, the goal is to create a display of love, community, and diversity not just in the mural but also in the process of creating the mural. The Extension

Michaels will install an idea wall in each Michaels store that features a different theme each week that revolves around diversity and open-mindedness. People are invited to come up to the wall to post their ideas related to the theme and also get the opportunity to be inspired by these ideas when finding a project or related supplies in Michaels. Moreover, during the weekend, Michaels will open up a class or a space where people can come in, take an idea off the wall, and create that idea within the Michaels store. All supplies will be provided, the class will be of little to no charge, and there will be Michaels employees who are trained in different crafts to be present during the class to assist anyone who needs help. In addition, Michaels can either go live on Facebook or Instagram, or post videos and Instagram stories that show a local maker taking an idea off the wall and creating a tutorial of a way to make the idea come to life. With this installation, it would encourage makers to post their ideas on the wall and to exercise their creativity with these new weekly themes. More importantly, this allows Michaels to make their store a safe place to nurture diversity, to discover new crafts and approaches to projects, and to show everyone that any idea can be made a reality when you work with Michaels.

2020 ADVERTISING STRATEGY / PAGE 25 MEDIA IDEAS

Media spread for the Create It Yourself campaign will be a mix between paid, earned and owned.

We expect it to comprise 40% owned and paid, with the remaining 20% being earned due to the eye-catching nature of the work and its resonance with our target. The traditional approach to marketing is thrown out the window for this audience, but Michaels can access a bevy of owned channels and promote on social and search to comprise the 40% of paid media. Getting in front of this audience is more and more online, so we propose inserting those spots and activations, as well as owned media, on the Michaels website and app. The stories should glide people into the offerings and usefulness of Michaels stores. We propose owned media and paid promotion because of these statistics within the millennial audience:

33% rely on blogs.

50% rely on emails

search for digital coupons 35% before an in-store purchase

search for a discount 52% before purchasing offline

While these are not overwhelming statistics that traditional TV used to offer, we can be confident that the search and engagement by hosting these materials will allow us to position ourselves in the digital space for consumers. Keep in mind that our audience exists on two tails: one that researches online before going to a store and one that buys in store on a whim. In both cases, we need to deliver content to them that engages them and promotes their status as creators and makers.

For markets to begin in, we would want to launch the television and digital campaign nationally, with specific markets that can test the deeper integration with activations and local influencers on social media. These include the LGBT-friendly (and Michaels hotspots) of Miami, Chicago, and the NYC tri- state area. We may expand our efforts to other DMAs based on the success of these pilot areas. MEASUREMENT

We recommend measuring website visits and app downloads year over year to measure success. Social media measurement and listening tools such as Nuvi, Hootsuite, or an integrated CRM such as SalesForce can be used to measure the success of the activations and owned/paid social (e.g. impressions, engagement, shares). From social and the website/app, we would want to use a brand tracker and watch the ethics or D&I metric increase as consumers associate Michaels with celebrating the maker and creator, no matter their gender, sexuality, or any other class or creed. FUTURE RECOMMENDATIONS

Although Michaels currently has instructions and a product list for certain projects, we recommend including Tasty-like videos along with the product list and instructions. The videos will be visually stimulating and show makers how easy the projects really are and inspire them to create. These could also be used on social media pages as well and would drive more people to the website. We also recommend the Michaels Makers and creating a blog on the website for them to contribute to and give their personal project tips. This way Michaels helps with the research phase as well as the purchase phase.

Another trend that Michaels could take advantage of is subscription boxes. Subscriptions have become very popular from brands like Stitch Fix which sends you clothes every month, Bark Box, Birch Box, Book of the Month Club, etc. In our research we found that currently there is no arts and crafts subscription box. By allowing customers to pick a project out of 3 or so monthly projects, could be an opportunity for Michaels and would drive even more traffic to the website.

References

Adminota. “Michaels Declares It Is Open to All; Pledges to Serve Everyone on the Same Terms.” Open to All, http://www.opentoall.com/michaels-joins-open-to-all/.

“Annual Reports.” The Michaels Companies, Inc., https://investors.michaels.com/sec-filings/annual-reports#.

Armstrong-Benson, Becca, et al. “What Role Does DIY Play in the Millennial Age?” Millennial Marketing, http://www.millennialmarketing.com/2017/12/what-role-does-diy-play-in-the-millennial-age/.

Augustine, Karen. “U.S. Millennials Still Shop in Stores, but Increasingly with the Help of Smartphones.” PaymentsJournal, Publisher Name PaymentsJournal Publisher Logo, 21 Nov. 2018, https://www.paymentsjournal.com/millennials-shop-with-help- smartphones/.

Brooks, Katherine. “Using Craft Art To Explore Contemporary LGBTQ Culture.” HuffPost, HuffPost, 7 Dec. 2017, https://www.huffpost.com/entry/queer-threads_n_4551235.

Cain, Áine. “Amazon Will Raise Its Minimum Wage to $15 an Hour -Here's What It's Really like to Work There, According to Employees.” Business Insider, Business Insider, 2 Oct. 2018, https://www.businessinsider.com/what-its-like-to-work-at-amazon- 2018-2#though-amazon-received-an-overall-favorable-work-life-balance-rating-some-employees-say-it-can-be-rough-5.

Contributor, STORES. “Michaels Boosts Customer Engagement through Tailored Messaging - STORES: NRF's Magazine.” STORES, 1 Mar. 2019, https://stores.org/2019/03/05/michaels-boosts-customer-engagement-through-tailored-messaging/.

Cornell, Brian. “Diversity & Inclusion: Target Corporation.” Target Corporate, https://corporate.target.com/corporate- responsibility/diversity-inclusion.

Crawford, Katie. “The Millennial Consumer: How They Shop & Why They Buy: Blog: Ascend.” Herosmyth, https://www.herosmyth.com/article/millennial-consumer-how-they-shop-why-they-buy.

Danziger, Pamela N. “Millennials Are Ready For Crafting, But Is The $36B Crafting Industry Ready For Them?” Forbes, Forbes Magazine, 9 July 2018, https://www.forbes.com/sites/pamdanziger/2018/07/08/millennials-are-ready-for-crafting-but-is-the-36b- crafting-industry-ready-for-them/#2bfa63973a2c.

“Four Ways to Catch the Growing Wave of Millennial DIYers.” MARC USA, https://marcusa.com/four-ways-to-catch-the-growing- wave-of-millennial-diyers/.

Guendelsberger, Emily. “Amazon Treats Its Warehouse Workers Like Robots: Ex-Employee.” Time, Time, 18 July 2019, https://time.com/5629233/amazon-warehouse-employee-treatment-robots/.

“How Millennials Are Changing The Face Of Retail Shopping.” BDI, https://www.bdiusa.com/blog/how-millennials-are-changing- the-face-of-retail-shopping.

Hudson, Matthew. “What Does the Next Generation Want From a Retailer?” The Balance Small Business, The Balance Small Business, 31 Oct. 2019, https://www.thebalancesmb.com/generation-z-retail-shopping-behaviors-4140379.

“Investor Relations: Amazon.com, Inc.” IR, 24 Oct. 2019, https://ir.aboutamazon.com/.

“Investors.” Target Corporation, 20 Nov. 2019, https://investors.target.com/.

Jasminecwu. “Gen Z Shopping Habits Can Fuel a Brick-and-Mortar Resurgence, Report Says.” CNBC, CNBC, 17 Sept. 2019, https://www.cnbc.com/2019/09/17/gen-z-shopping-habits-can-fuel-a-brick-and-mortar-resurgence-report-says.html.

Melton, James, et al. “US Millennials Now Do 60% of Their Shopping Online, up from 47% in 2017.” Digital Commerce 360, 11 Nov. 2019, https://www.digitalcommerce360.com/2019/03/26/millennials-online-shopping/.

“Michaels Arts and Crafts Store Joins Open to All Campaign Embracing LGBTQ Inclusion.” Metro Weekly, 15 Oct. 2019, https://www.metroweekly.com/2019/06/michaels-arts-and-crafts-store-joins-open-to-all-campaign-embracing-lgbtq-inclusion/.

O'Shea, Dan. “Michaels Deploys Personalized Shopping Tech.” Retail Dive, 5 Dec. 2018, https://www.retaildive.com/news/michaels-deploys-personalized-shopping-tech/543621/.

Omnichannel Retailing - US - May 2019 - Market Research Report, https://academic.mintel.com/display/920302/.“Our Strategy.” The Michaels Companies, Inc., https://investors.michaels.com/company-information/our-strategy.

References

Parker, Kim, et al. "Generation Z Looks a Lot Like Millennials on Key Social and Political Issues.” Pew Research Center's Social & Demographic Trends Project, 18 Jan. 2019, https://www.pewsocialtrends.org/2019/01/17/generation-z-looks-a-lot-like-millennials- on-key-social-and-political-issues/.

“Purchasing Habits of the Millennials.” Lava Reviews, 13 Dec. 2016, https://lavareviews.com/purchasing-habits-of-the- millennials/.“Retail for the Millennials – How Do They Purchase and What Do They Really Want?” V12, 5 June 2019, https://v12data.com/blog/retail-millennials-how-do-they-purchase-and-what-do-they-really-want.

“Secondary Navigation.” Michaels, https://www.michaels.com/about-us-|-michaels-corporate/About-Us.html.“Secondary Navigation.” Michaels, https://www.michaels.com/about-us-|-michaels-corporate/About-Us.html.

“The Arts and Crafts Consumer - US - January 2019 - Market ...” Mintel, http://academic.mintel.com/display/918404/.

“The Pronoun Project.” The Pronoun Project, https://thepronounproject.com/.

Wahba, Phil. “Michaels Offers Fresh Lessons in Perils of Being a Retail Tech Laggard.” Fortune, Fortune, 7 June 2019, https://fortune.com/2019/06/06/michaels-stores-arts-and-crafts-sales-decline-e-commerce/.

“Who Are the Millennial Shoppers? And What Do They Really Want?” Accenture Outlook, https://www.accenture.com/us- en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail.

“Yes, Millennials DO Shop in Stores.” Grow Wire, https://www.growwire.com/millennials-shop-in-stores.