July 8, 2008
Retailers Look for Edge Going Back to School
By some estimates, the back-to-school selling season will be lackluster this year as the combination of a shaky economy and a dearth of “must-have” items keep consumer purchases down.
Competition for scant consumer dollars will be especially intense among middle-market department stores such as J.C. Penney and Kohl’s, according to a Wall Street Journal report. Some analysts expect that consumers may forego their usual back-to-school clothing purchases for needed items such as computers and textbooks.
Back-to-school, which is the second busiest selling period for retailers behind Christmas, is expected to be flat to slightly down compared to the same period last year.
Kohl’s is looking to get a jump on the competition by launching its back-to-school campaign a week earlier this year. The chain is rolling out a new, exclusive line of girls’ clothing and accessories from the Canadian rocker Avril Lavigne.
New ads from Kohl’s will feature music and screen celebrities including Lenny Kravitz and Hayden Panettiere talking about their memories of “favorite fashion moments.” Kohl’s is running a contest on Facebook inviting consumers to share videos in the same vein.
J.C. Penney is looking to set itself apart for those going back-to-school with exclusive brands including Fabulosity clothing and accessories designed by Kimora Lee Simmons and the Dorm Life home furnishings line. The chain plans to rollout five exclusive brands for back-to-school; the most it has ever debuted at any one time.
“It’s a huge time of the year for us, and we’re spending against it,” Mike Boylson, Penney’s chief marketing officer, told the Journal.
Discussion Questions: What will it take to succeed during this year’s back-to-school shopping season? Which product categories do you think will have the toughest time? Will results indicate anything relative to the upcoming Christmas shopping season?
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Extant of market-driving trends, BTS has always been more about the overall economic climate than anything else. Yes, core purchasing will go on, and the definition of what is “core” will change from year to year…hence the flat overall outlook, in a climate where a mid single digit drop wouldn’t really surprise me.
There is an incredible amount of uncertainty in the American consumer’s consciousness right now, with a very obvious tendency to believe things are going to get worse before they get better. In that environment, without a market-defining trend which absolutely requires either a complete technological make-over or a closet-emptying frenzy…sales will be difficult.
Between Kohl’s and JCP, I believe JCP has a head start in connecting with the tween and teen audience, having delivered viable fashion in those segments for a number of years now. The JCP ad spend in support of the season will also probably significantly exceed Kohl’s, and traditionally, in a flat inning, he who spends, wins. Each of them, however, needs to be looking for novel, dynamic and creative ways to enhance their connection with both the parent and the child–because it’s going to be all about market share. It’s very difficult to continue spending into a declining earnings forecast, even when NOT to do so is probably going to result in an even steeper earnings drop. It will be interesting to see which player “blinks” first.
With consumers spending more on gasoline and food, money for “extras” or “fun” things may be in short supply. The staples, however, will still be in demand. For those going off to college or moving into apartments, basic items will still be necessary but the fun, decorating items may not move as quickly this year.
Back to School is one of the best events of the year from drawing destination traffic. What retailers need to capitalize on to get best results is to surprise the consumer throughout the store with other amazing items for purchase. These items should not necessarily be even just for kids. Retailers can earn incremental profits with health and beauty, gadgets, general merchandise, and new items of all types.
I’m not sure I agree that b-t-s will be flat this year. I’ve seen the mixes and assortments for several chains and I think we will sell out! Popular licenses and excellent branding and packaging is going to drive this season. It’s up to the retailer to execute and provide service to sell through.
My advice to chains is to put your heads together and come up with something creative that will blow your customers away.
Cell phones are still the must have. Everyone already has one–or two–but they are priced to be a fashion accessory and the new generation of internet-enabled ones like the iPhone and its knockoffs make them even more desirable. Walk into any Apple store and you’ll know what I mean.
Good promotional prices on notebook computers will keep them moving off the shelf at the expense of desktops, which are “so yesterday.”
Clothing is a tough call. The ones you mentioned are moving in the right direction, but who knows what younger consumers will and won’t buy?
Seasonal events are all about promotion, and I think the success of this year’s BTS will depend on the quality of promotions. If consumers feel that retailers and suppliers feel their pain and are looking for ways to help them get by this season, keep the kids happy and blissfully unaware of economic hardship, then the season will go well. I expect “value” to be a key phrase this year.
Even in a tough economy, the BTS customer still will be out there spending on apparel and accessory items, even if the list is shortened to the basics, (footwear, denim, backpacks, & tops).
There is little in the way of new, gotta-have fashion trends this year and buyers will DEFINITELY be looking for bargains. I expect to see everyone on sale early with heavy promotions.
Style still rules the school but gas is expensive, so perceived higher end online retailers like Swell.com that offer free shipping, good assortments and decent promotions may generally do better than some other brick & mortar retailers.
If you’re located near a Steve & Barry’s, if they’re having a liquidation sale, your Back To School clothing sales won’t be good. Otherwise, the usual high-low price rules will apply. Any store with its own credit cards, if they’re willing, can build sales by offering higher credit limits. The #1 clothing problem: no blockbuster “must-have” new style right now.
What will it take to succeed during the back-to-school season? Value and innovation in my opinion.
As for the holidays, we don’t know what gasoline prices will be at that time. That will surely have an effect on consumer spending in many categories, from clothing to gifts to air travel.
IMO they could do well to continue to provide a higher standard of clothing for teens and young adults, staying away from the trap of “trendy” pop culture fashions put out by many big box “discount” retailers. Teens and young adults these days understand that although pop culture and fashion is fun on their private time, there is a time and place for everything. In other words, some pop fashion is not appropriate for school or the work place.
Honestly, I don’t understand how certain MegaMarts, (insert The Biggest Box Store Name Here) LOL, have gotten away with selling the cheap overly revealing clothing they have for so long. Children sometimes learn the hard way that although Brittany Spears may get away with wearing a cut off tee shirt and overly low riding pants, that kind of attention can be embarrassing and bring with it an undesirable stigma.
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Extant of market-driving trends, BTS has always been more about the overall economic climate than anything else. Yes, core purchasing will go on, and the definition of what is “core” will change from year to year…hence the flat overall outlook, in a climate where a mid single digit drop wouldn’t really surprise me.
There is an incredible amount of uncertainty in the American consumer’s consciousness right now, with a very obvious tendency to believe things are going to get worse before they get better. In that environment, without a market-defining trend which absolutely requires either a complete technological make-over or a closet-emptying frenzy…sales will be difficult.
Between Kohl’s and JCP, I believe JCP has a head start in connecting with the tween and teen audience, having delivered viable fashion in those segments for a number of years now. The JCP ad spend in support of the season will also probably significantly exceed Kohl’s, and traditionally, in a flat inning, he who spends, wins. Each of them, however, needs to be looking for novel, dynamic and creative ways to enhance their connection with both the parent and the child–because it’s going to be all about market share. It’s very difficult to continue spending into a declining earnings forecast, even when NOT to do so is probably going to result in an even steeper earnings drop. It will be interesting to see which player “blinks” first.
With consumers spending more on gasoline and food, money for “extras” or “fun” things may be in short supply. The staples, however, will still be in demand. For those going off to college or moving into apartments, basic items will still be necessary but the fun, decorating items may not move as quickly this year.
Back to School is one of the best events of the year from drawing destination traffic. What retailers need to capitalize on to get best results is to surprise the consumer throughout the store with other amazing items for purchase. These items should not necessarily be even just for kids. Retailers can earn incremental profits with health and beauty, gadgets, general merchandise, and new items of all types.
I’m not sure I agree that b-t-s will be flat this year. I’ve seen the mixes and assortments for several chains and I think we will sell out! Popular licenses and excellent branding and packaging is going to drive this season. It’s up to the retailer to execute and provide service to sell through.
My advice to chains is to put your heads together and come up with something creative that will blow your customers away.
Cell phones are still the must have. Everyone already has one–or two–but they are priced to be a fashion accessory and the new generation of internet-enabled ones like the iPhone and its knockoffs make them even more desirable. Walk into any Apple store and you’ll know what I mean.
Good promotional prices on notebook computers will keep them moving off the shelf at the expense of desktops, which are “so yesterday.”
Clothing is a tough call. The ones you mentioned are moving in the right direction, but who knows what younger consumers will and won’t buy?
Seasonal events are all about promotion, and I think the success of this year’s BTS will depend on the quality of promotions. If consumers feel that retailers and suppliers feel their pain and are looking for ways to help them get by this season, keep the kids happy and blissfully unaware of economic hardship, then the season will go well. I expect “value” to be a key phrase this year.
Even in a tough economy, the BTS customer still will be out there spending on apparel and accessory items, even if the list is shortened to the basics, (footwear, denim, backpacks, & tops).
There is little in the way of new, gotta-have fashion trends this year and buyers will DEFINITELY be looking for bargains. I expect to see everyone on sale early with heavy promotions.
Style still rules the school but gas is expensive, so perceived higher end online retailers like Swell.com that offer free shipping, good assortments and decent promotions may generally do better than some other brick & mortar retailers.
If you’re located near a Steve & Barry’s, if they’re having a liquidation sale, your Back To School clothing sales won’t be good. Otherwise, the usual high-low price rules will apply. Any store with its own credit cards, if they’re willing, can build sales by offering higher credit limits. The #1 clothing problem: no blockbuster “must-have” new style right now.
What will it take to succeed during the back-to-school season? Value and innovation in my opinion.
As for the holidays, we don’t know what gasoline prices will be at that time. That will surely have an effect on consumer spending in many categories, from clothing to gifts to air travel.
IMO they could do well to continue to provide a higher standard of clothing for teens and young adults, staying away from the trap of “trendy” pop culture fashions put out by many big box “discount” retailers. Teens and young adults these days understand that although pop culture and fashion is fun on their private time, there is a time and place for everything. In other words, some pop fashion is not appropriate for school or the work place.
Honestly, I don’t understand how certain MegaMarts, (insert The Biggest Box Store Name Here) LOL, have gotten away with selling the cheap overly revealing clothing they have for so long. Children sometimes learn the hard way that although Brittany Spears may get away with wearing a cut off tee shirt and overly low riding pants, that kind of attention can be embarrassing and bring with it an undesirable stigma.