June 25, 2015
School’s out, it’s time to shop for back to school
One day, after my daughter finished up her last day of school this week, a package arrived at our door containing all the supplies she will need as she moves into second grade in the fall. While the timing may seem ridiculously early (it was part of an arrangement with our local school district), research conducted last year by Prosper Insights & Analytics for the National Retail Federation (NRF) found nearly 25 percent of families started their back-to-school shopping two months before the new school year begins.
Retailers are hoping for plenty of early shoppers again this year, especially in light of new NRF data. According to the survey of 6,400 adults with children, 29 percent of households with kids between six and 17 expect to spend more this year, up from 24 percent in 2014. Nearly 30 percent of families with kids in college will also spend more compared to 23 percent last year.
The shopping period for back-to-school has lengthened over the years. It’s not unusual anymore for kids and their families to wait until after schools open to buy items, particularly apparel, in search of deals. Getting customers to shop earlier offers merchants the hope of higher margin sales.
A study by America’s Research Group, via CNBC, found that 58 percent of parents plan to put off purchases for back-to-school as long as possible, up from 50 percent last year. The reason is simple; they are looking for better deals.
Source: jcpenney.com
Price, according to NRF’s research, remains a concern for many. The percentage of families with kids in college that plan to comparison shop rose from 28 percent in 2014 to 32 percent this year. More than 31 percent of those with kids K-12 will do the same versus 30 percent in 2014.
According to a separate CNBC report, retailers are planning on going all out to attract shoppers for back-to-school compared to last year when many focused on inventory management to reduce costs.
Retailers including Abercrombie & Fitch, Aéropostale, American Eagle and Urban Outfitters have all expressed increased levels of confidence as the selling season nears.
One of the factors behind brighter prospects for the season is the teen employment picture. According to Challenger, Gray & Christmas, the employment rate for teens between 16 and 19 is up five percent this year over last.
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Recent Discussions
Discussion Questions
What will separate the retail winners from the losers this back-to-school season? Are you more or less optimistic about the prospects for the back-to-school season this year than you were in 2014?
Poll
Only 32 percent of families comparison shop? That is a bit surprising. This “holiday” is probably the most price-sensitive season, and having three kids in college myself I can definitely tell you we will be looking at prices. I’m not certain there will be any significant shift in marketing/merchandising by merchants and CPG brands this season with the exception of advertising earlier and earlier each year as George stated in the article. The U.S. economy continues to recover slowly, so I think this year will be at least as good as 2014, especially as teen employment is on the rise. Now they will have a say in the spending potentially.
My son, just home from university, announced he will need new clothes for next year. Knowing his shopping list early and the budget we’re on (school is darn expensive) is helpful as we will start shopping right away and throughout the summer.
I have seen that this occasion is moving earlier and earlier in the summer. Sure I understand why: beat the competition (whether retailer or brand), take the shoppers out of the market before the “other guy” begins marketing, break through in a slow media timeframe, etc.
However I think that ultimately there will be a backlash. I imagine that neither kids nor parents want to think about school shopping in June. Let people enjoy their vacations and let the fall shopping remain a cherished (timely) ritual of the fall.
Retailers and market analysts are still underestimating the state of family finances as people are still recovering from the shock of the financial collapse and the inevitable middle class decline.
BTS and BTC positioning has already been established within markets. While people might be able to get some deals online or with coupons by waiting later, the problem is that the best of the merchandise is gone, baby, gone. And that is what will differentiate the winners from the losers: if a well positioned BTS/BTC retailer has winners in the market, then having it still in stock to continue selling through the season will/is critical especially with this short window of opportunity.
Design does make a difference (bedding/apparel/colors) and then price. Since BTS/BTC is my wheelhouse, I can speak with authority that product isn’t that great. It’s easy to beat the competition with cool product and good pricing. It always amazes me that this doesn’t happen and that good design is in short supply. The BTS/BTC market continues to go down-market.
This is the trendiest and most price conscious of markets. Price is not the only consideration, and when it comes to trend, it’s hard for people to create the right mix. Target used to be the exception and maybe still is, but I’ve seen a decline in their mix as well going to strictly commodity in order to manage something they’ve lost a handle on (Abercrombie, Gap, American Eagle, American Apparel, et al).
In the apparel department, Old Navy seems to be the only one who can ascertain the combo of trend plus price plus “what the market will bear now.”
Given the modern consumer trend of shopping any time, anywhere, the answer still comes to price and availability. Some segments of shoppers will shop early and often and assemble the kit over the summer; some will wait till last minute and cram the purchase. Technology like list tracking and showing availability will help especially for the last minute shoppers who can’t browse around.
Product, price, location, and the “cool” factor will all be key parts of retail winners’ models in the back to school season. 2015 will be a stronger, more rewarding season than 2014, and we will continue to see a growing role of the Internet as online sales continue to grow.
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Only 32 percent of families comparison shop? That is a bit surprising. This “holiday” is probably the most price-sensitive season, and having three kids in college myself I can definitely tell you we will be looking at prices. I’m not certain there will be any significant shift in marketing/merchandising by merchants and CPG brands this season with the exception of advertising earlier and earlier each year as George stated in the article. The U.S. economy continues to recover slowly, so I think this year will be at least as good as 2014, especially as teen employment is on the rise. Now they will have a say in the spending potentially.
My son, just home from university, announced he will need new clothes for next year. Knowing his shopping list early and the budget we’re on (school is darn expensive) is helpful as we will start shopping right away and throughout the summer.
I have seen that this occasion is moving earlier and earlier in the summer. Sure I understand why: beat the competition (whether retailer or brand), take the shoppers out of the market before the “other guy” begins marketing, break through in a slow media timeframe, etc.
However I think that ultimately there will be a backlash. I imagine that neither kids nor parents want to think about school shopping in June. Let people enjoy their vacations and let the fall shopping remain a cherished (timely) ritual of the fall.
Retailers and market analysts are still underestimating the state of family finances as people are still recovering from the shock of the financial collapse and the inevitable middle class decline.
BTS and BTC positioning has already been established within markets. While people might be able to get some deals online or with coupons by waiting later, the problem is that the best of the merchandise is gone, baby, gone. And that is what will differentiate the winners from the losers: if a well positioned BTS/BTC retailer has winners in the market, then having it still in stock to continue selling through the season will/is critical especially with this short window of opportunity.
Design does make a difference (bedding/apparel/colors) and then price. Since BTS/BTC is my wheelhouse, I can speak with authority that product isn’t that great. It’s easy to beat the competition with cool product and good pricing. It always amazes me that this doesn’t happen and that good design is in short supply. The BTS/BTC market continues to go down-market.
This is the trendiest and most price conscious of markets. Price is not the only consideration, and when it comes to trend, it’s hard for people to create the right mix. Target used to be the exception and maybe still is, but I’ve seen a decline in their mix as well going to strictly commodity in order to manage something they’ve lost a handle on (Abercrombie, Gap, American Eagle, American Apparel, et al).
In the apparel department, Old Navy seems to be the only one who can ascertain the combo of trend plus price plus “what the market will bear now.”
Given the modern consumer trend of shopping any time, anywhere, the answer still comes to price and availability. Some segments of shoppers will shop early and often and assemble the kit over the summer; some will wait till last minute and cram the purchase. Technology like list tracking and showing availability will help especially for the last minute shoppers who can’t browse around.
Product, price, location, and the “cool” factor will all be key parts of retail winners’ models in the back to school season. 2015 will be a stronger, more rewarding season than 2014, and we will continue to see a growing role of the Internet as online sales continue to grow.