Back-to-School Starts Early
We see Christmas in July sales and Halloween items on display by Labor Day, so it probably shouldn’t come as a surprise to anyone that some stores are already beginning to look to back-to-school before the Fourth of July.
In fairness, stores do have reason for getting an earlier start in many parts of the country as school years don’t follow the post-Labor Day schedules that many of us remember from our youth.
Back-to-school shopping also doesn’t mean the same thing as it once did. Shopping patterns are changing. While basic supplies such as pads and pencils are required for the start of school, kids don’t rush today to purchase fall fashions as their Baby Boomer parents/grandparents once did. Today, those purchases are often put off until after school starts, prices drop and the weather suits the clothes (thank you Harry Nilsson).
As a Dow Jones Newswire piece points out, big ticket consumer electronic purchases such as tablets and PCs are also common for back-to-school, especially among kids going off to college. (How about a show of hands from all those who remember when an IBM Selectric typewriter was a big purchase?)
The state of the economy will eventually play a major factor in just how much consumers spend this year for back-to-school. A National Retail Federation survey found that the economy will have an effect on back-to-school shopping for 80.4 percent of consumers with school-aged children, down from 86 percent last year. Predictions for just how much better or worse back-to-school will be this year have yet to be made public.
Discussion Questions
Discussion Questions: How has back-to-school shopping changed and what does it mean for retailers? Do retailers getting an early start have an advantage over those that wait?
Retailers should locally target back-to-school sales — even two neighboring towns can have schedules that are a few weeks apart, and in some regions of the country school begins in early August while in others it starts in early September. Colleges also have very different schedules, with trimesters and quarters commonly found alongside the traditional two-semester schedule. A back-to-school sale before July 4 may make sense in a district that begins the 2012-13 academic year the first week of August, but not in one that starts the week after Labor Day.
It’s important to distinguish between BTS shopping for apparel (which seems to happen later every year) and for dorm room furnishings and other categories needing some advance planning. And, given the wide variation in school opening dates (from early August to post-Labor Day) it’s reasonable for retailers to push this business now.
Stores that used to deliver too much fall apparel too early have learned their lesson. As the WSJ article points out, you might see “transitional” color palettes of short-sleeved goods in stores right now, but not a lot of unsaleable sweaters, etc. while most of us are dealing with record heat.
I agree with Dan that this is a prime opportunity for retailers to demonstrate that they are plugged into the local community. Two years ago, my kids attended school year-round. The school district finally built enough buildings that they didn’t have to continue that practice, but if they had, my kids would be starting their next school year next week.
At the time, it was frustrating for us because not only were there no deals out there, there was hardly any merchandise. And it definitely didn’t feel right doing back to school apparel shopping. And it was annoying, because the whole county — the largest county in Colorado — was on the year-round system. The store people would just shrug. “This is what corporate sends us.” And you knew that they were annoyed too.
So, if retailers do really get serious about making the store more relevant in a digital world, then this is one area where I’d expect to see instant improvement.
There are two rationales for retailers to “get out early” with seasonal sales.
The first is easy — the product is a consumable and the odds are that once it gets in the house it won’t last until the holiday, thus creating the need for an incremental “refill purchase.” A perfect example is seasonal candy. A counter example is the Christmas turkey or ham. Few people will eat the first before the holiday and then buy a second.
The second rationale applies to durables such as clothing or computers. The first retailer out might capture a few more purchases based on consumers buying early. Typical reasons are to ensure a good selection or to give time to return and replace if turquoise turns out not to be daughter’s shade. But this is primarily a share steal game for retailers. It seldom results in incremental purchases for the market as a whole.
Recent experience indicates that the opportunity for a good ROI on early display of seasonal consumables is about a 50/50 proposition. Early display of seasonal durables is much more iffy.
Back to school sales now include much higher ticket items from say 25 – 30 years ago. 30 years ago, back to school meant a new lunch box, pencils, ruler, erasers, backpack, new sneakers and some new cloths. You picked these items up at your local mall, department store, or possibly a mass merchant like Kmart and Walmart. Today, back to school is more about electronics including tablets, computers and printers. The primary shopping is now done online and at specialty stores including Staples, Office Depot or even COSTCO. Clothing and sneakers are still hot items, but the options are far greater for customers.
Like Christmas, this season is extremely important to many retailers and figuring out the correct assortment, pricing, marketing and timing of promotions is key.
I suggest retailers wait until after the July 4th holiday to kick off major promotions. Any sooner just doesn’t feel American.
If I can buy my kids school supplies from Staples.com or Officedepot.com and have it the next day, why should I care? If I can purchase my BTS technology needs from BB or Amazon and have it the next day, why should I care?
Do people really think about BTS more than a week or two before school starts? If that is true, the retailers are wasting money and effort that could be better spent.
Sorry, but nobody wants to see backpacks and plaid when the weather is ghastly hot. We also don’t want to see Halloween candy. When did alienating the customer become a best practice?
We live in Northern California and our schools start the end of July. Many of our schools provide a list of supplies needed on the first day of school. The earlier the sales begin the better for us.
As well as earlier season selling, we also now see heavy discounts occurring prior to key seasonal events like Christmas.
For back-to-school there may not be much in the way of incremental spend to be captured and it seems to add the risk of promotion driving. However, individual retailers are battling with each other to steal a trip/item so it doesn’t surprise me that this is happening. It does feel like old-school retailing tactics in a world that has moved on … in which it is now possible to be far more personalized and relevant.
As well as local awareness of school schedules, I’d like to see much more knowledge of individual family needs by using data in a smarter way. Convenience and simplicity is important for many families (like mine!), not just price. It is not too hard these days to leverage digital communication channels and apps to provide personalized opportunities to pre-order or reserve the products and colors/sizes you expect a family to need.
By knowing the customer you can also reward with differentiated prices/benefits and delivery commitments to key customers to help earn their full seasonal shopping with you. Working with customers on this in advance can help optimize the supply-side for both retailers and manufacturers too.
If you believe that the shopping experience plays a significant role in purchase behavior, then an early start is an advantage. As long as there are positive memories associated with getting ready for the first day of school (elementary, high school or college) shoppers will get gratification out of buying supplies, perhaps triggered by some just after July 4th displays. I’m guessing the retailers follow the lead of the manufacturers and other retailers. If not, the POS signage wouldn’t be ready to accommodate the products on the shelves.
If the retailer owns the product, they might as well display and sell it. I don’t see any real backlash for starting early. Even my kids, who find back-to-school revolting, are just as likely to cruise the BTS isle.
Retailers have needed to improve their ‘just-in-time’ techniques for a couple of decades now. Seems to be the #1 complaint I hear from our research: flannel tops in July, shorts in January, etc. With technology and more instinctual planning, this should be a lot easier than it was 20 years ago.
Smart retailers who understand their customers pay a little more attention: witness A&F, who carries shorts just about year round.
There’s no disputing the fact that today’s consumers don’t wait for retailers, CPGers, sale circulars or the calendar to tell them when to shop for seasonal and holiday items (e.g., back-to-school/college, Halloween, Christmas, Valentine’s Day, Mother’s Day). It’s an ongoing change in shopping behaviors that is the result of various other trends, e.g., more cost-conscious consumers, smarter shopping behaviors, 24/7/365 access to any product a consumer wants via e-shopping, and new and varying consumer lifestyles and behaviors.
That said, the key for retailers is to be ready with the goods when their consumers want to buy. It requires not only knowing more about your consumers’ lifestyles outside the shopping experience, but also more about their needs and behaviors inside the shopping experience. It doesn’t mean merchants must go whole hog with their back-to-school/college offer in June, Halloween costumes in July, or their Christmas offer in August. Rather, it means ensuring their consumers know that if they’re looking for school supplies in May or a holiday gift in July, they can purchase those at your store.
For certain groups of the brand’s shoppers who have, for example, indicated a willingness or desire to shop for holiday gifts in July or August, then it may be that the brand creates special emails for them highlighting holiday gifts, launches a reward program designed to reward them for buying gifts now, or creates a layaway payment plan. I’ve already received emails regarding back-to-school/college shopping from brands like The Container Store, Organize.com and Staples. That seems like smart retailing for these smaller brands, if they want to get a jump on the much larger Walmart and Target.
It’s definitely more difficult to anticipate and meet the needs of consumers when they want to shop and buy. But the alternative seems less palatable: Ceding this ground to competitors or adhering to increasingly outdated ideas of seasonal shopping behaviors.
The earlier the better for promotions, but for many types of retailers, a Memorial Day or Fourth of July start for B-T-S can cause confusion if not carefully handled. For Staples and Best Buy, an earlier start will likely enhance sales, particularly since potential consumers will have just finished school and have an active sense of what they need for the following year. However, for say a drug store or a supermarket, the key to successful promotions is getting into one and, as soon as it’s over, getting out of it fast — and making that promotion really intense to grab shoppers’ attention. An early start for these types of retailers might bring a mixed bag of results.
I think the “back to school” categories have changed and dramatically altered the shopping behavior of the season.
Aside from the elementary items shoppers don’t have to pre-plan to purchase, a contemporary “back to school” shopping list bears little resemblance to one from a decade ago.
I believe retailers need to plan their back to school sales based on their category purchase funnel. After all, buying a laptop is a different process than buying a wardrobe.