From The Editor | August 8, 2013

Capitalizing On Back-To-School Earlier

Source: Innovative Retail Technologies
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By Bob Johns

Retailers are in the end-run for back-to-school, but they started earlier than ever to get a leg up on the season.

Much to my children’s chagrin, back-to-school is in full swing. Having a teacher for a wife, I used to routinely send her pictures of back-to-school merchandise that arrived at retail stores on the same day school let out, just to remind her how short summer really is. Retailers obviously plan for back-to-school early in the year, but it doesn’t usually hit consumers’ minds until late in July, when kids start rolling their eyes at the endless displays of notebooks, crayons, backpacks, and calculators.

After a record-breaking 2012, where families with school-age children spent an average of $688.62* on back-to-school supplies, 2013 looks to be a down year for retailers. According to NRF’s “Top back-to school trends for 2013,” the average back-to-school shopper is predicted to spend 8 percent less than in 2012. This number is misleading, though. “In historic terms, this is a very strong year,” says NRF president and CEO Matthew Shay in a recent media briefing. “Retail sales and consumer spending are one of the only consistent areas of growth in today’s economy. While lower than in 2012, 2013 sales should still be 5 percent higher than 2 years ago.” This still leaves back-to-school as a $26 billion season.

Retailers look at things differently, though. They look at year-over-year growth, and back-to-school is their second most important season, next to the holidays. Like has happened with Thanksgiving creep, retailers are trotting out back-to-school supplies earlier than ever. The thinking is that if they get the merchandise out early, consumers will spend more over time than they would in a shorter time period. This strategy has yet to pay off for the holidays, with the majority of customers just shifting their purchase time earlier, not increasing the amount they spend. With back-to-school, it may be a different story.

When I walk down the aisles at Walmart, Target, or OfficeMax with 3 or 4 kids in tow, we seem to inevitably buy something they “need” for school. I am sure we have already purchased enough to get them through the school year and beyond, but we will inevitably buy more. When my wife is shopping with my mother-in-law and our girls, they hit the sale racks, and if there are good sales, they will come home with numerous bags. This season, they have started pretty much right when the sales were being advertised. I realize we are a small sample, but our buying season has definitely started earlier.

Holiday shopping, on the other hand, is done primarily without school-age children. With back-to-school, you want your kids to pick out the lunchboxes and backpacks. You need them with you to get the correct items for each class. With holiday shopping, everything is supposed to be a surprise. Consumers usually set aside time to go shopping without the family, which leads to less opportunities for the impulse purchase and extending the purchase cycle. With holiday shopping, earlier sales may do nothing but move up purchase dates, but with back-to-school, retailers may have a real opportunity to increase sales the earlier they start.