We look at BIGresearch survey data through segments–(the lens of the primary back-to-school shopper by key account) to find the story behind the story, and the opportunities that may be uncovered within. We looked at moms with kids under 18 who shop at Wal-Mart and found the biggest increase in “plan to shop” store type in 2007 vs. 2006 is shopping online–28% more Wal-Mart moms said they’ll shop online for back-to-school products this year. But while the percentage increase is significant, the penetration is only 18%, a little shy of the national average of 21%. Still, an opportunity for Walmart.com at the very least. The more significant opportunity is uncovered when looking at the decrease in Wal-Mart moms who plan to shop in the discount channel this year. In 2006, 81% of Wal-Mart moms said they’d shop in the discount channel, for 2007 that number is down to 78%. Seems like a small percentage change, until you consider that Wal-Mart claims 138 million shoppers a week, and focuses its marketing efforts on the moms. Do… Read more »

No question it will be a competitive BTS in areas like school supplies, electronics, footwear and jeans that historically drive this business. However, apparel retailers don’t always get as much traction out of Back to School because they will tend to front-load stores with too much fall apparel rather than “buy now” merchandise still timely for August and September weather.

Keep in mind that the NRF forecast of 7% increases from 2006 need to be taken with a big grain of salt. Retailers are by nature optimistic but the NRF is guilty every year of blue-sky sales forecasts that have little to do with that season’s economic reality…in 2007, characterized by concern about gas prices, mortgage rates, and political uncertainty. I’m sure if you study the NRF’s history of holiday sales forecasts vs. actual results you will note quite a difference.

Back to School (BTS) has evolved and developed to one of the most significant shopping events of the year beyond the traditional mass markets channels, however, Wal-Mart’s aggressively advertised price strategy will lure chunks of BTS market share back to their stores, and to that channel.

The competition for BTS dollars is healthy for the economy and I think it’s positive for the retail world and exciting for consumers. Many products that are not even necessarily BTS items in a traditional sense, are benefiting from these traffic events, and smart retailers are capitalizing by taking full advantage from the traffic and indirect selling opportunities, as well.

Those who have been following Wal-Mart press in the last year may have noticed that Wal-Mart has been hinting that they are returning to an emphasis on their core competence…Price Leadership.

While it may seem to be obvious to many that Wal-Mart is a low price leader, the reality is that this leadership position has been eroding over the last decade. Marketbaskets show that Wal-Mart’s advantage has been shrinking.

BTS is one of the key seasonal selling periods and the company has determined that they are not going to be undersold and are marketing the fact that they are lowering prices to serve their customers. The fact that their COO, Bill Simon, is acting as spokesperson tells you a lot.

You can expect more of this press as each of the key selling periods approach (Thanksgiving, Christmas, Easter and so on). Wal-Mart is focused on reinforcing to the consumers and the financial world that they are THE price leaders.

Retailing’s growth slowdown in recent years means every store is now doing all it can to get every 1% more comp sales possible. Previously overlooked areas are getting emphasis. Every seasonal event is getting more attention, not just back-to-school. Successful retailers used to focus on building sales growth through e-commerce and building new locations. Now that e-commerce is in a slower growth mode, and many retailers see than building new locations often hurts their comp sales trends (via cannibalization), retailers are doing all they can to build sales organically.

From the July issue of Integrated Retailing: By every indication, consumer spending will continue to grow through the rest of the year and beyond. Economic, employment, income and spending growth, although not spectacular, are all in positive territory. Any declines in the value of home equity are marginal and by no means permanent; the overall drag on the economy from the housing industry should decline in coming months (Moody’s). Leading indicators, including new orders for consumer goods, are rising. The resiliency of the US economy and American consumers are again trumping all predictions of doom and gloom. We have weathered the worst. The run-up in gas prices has hurt, but the effect has not been profound or lasting. Consumer sentiment may be restrained, but is not gloomy. There is no hint of recession anywhere on the horizon: economic conditions are good, equity markets are strong. What this means for retailers: be prepared for breakouts — sudden explosions of consumer desire and spending for goods and services in high demand. As always, we counsel following trends,… Read more »

Every season, BTS never ceases to amaze me. The product mix gets bigger and bigger and the price ranges get wider and wider. There is selection for every budget. I think some consumers may sway out of Wal-Mart this year based on the quality of products sold last year. Many of the BTS skus Wal-Mart carries are no-name and have questionable quality. A discounted backpack or calculator that lasts for only 2 months is hardly a deal. With that, I don’t think Wal-Mart will see that big a dent in sales this year and their price cutting program will more than make up for customers who question quality. Wal-Mart has established itself as the BTS destination for the price conscious and those who seek value and they will continue to hold that position. Staples and the other chains can only compete by offering exclusives and unique products not carried by WM.