Trends Emerge In Tough Back To School Season

Back to school is getting tougher to call as the season becomes extended and complicated by a closer associated with the year-end holidays, however, trends are emerging that suggest consumers are becoming harder for retailers to reach.

Many retailers tried extending their back-to-school promotions into early summer but with mixed results. Teen retailers wound up discounting products deeply after early promotions didn’t drive enough traffic to stores. Office products retailers, too, jumped into back to school early. Staples launched its back-to-school season full bore on July 14 with an official corporate announcement and deals on organization products among other items.

Yet, gearing up back to school early didn’t necessarily help office products retailers. Among the first to comment on the season, OfficeMax, reported on August 3 that its sales had suffered a decline and that a “very, very tough” back to school period might contribute to lower revenues going forward. In late June, Office Depot predicted a promotional, competitive back to school season as it also reported a sales slump.

The king of season stretchers, Walmart, actually launched its back to school push as soon as the Fourth of July holiday ended. Although some retailers suffered by getting into the season too early, Walmart has a strategy that incorporates the entire period up through Labor Day in a multi-part effort that includes sales but also initiatives not dependent on price breaks. To get consumers ready for back to school, and to encourage them to think of as many items to include in their seasonal shopping as possible, Walmart posted lists of back-to-school necessities, including backpacks and scissors, as well as, options, such as facial tissues and sealable food bags. The retailer offers three lists, one each for elementary, middle school and high school students.

Beyond simple lists, Walmart is promoting distinct back-to-school product designations: boys and girls apparel, school supplies and study essentials. Under the essentials heading, Walmart includes laptops, printers, lounge seating and desks/chairs. Rollbacks deals start desk prices at $49 and desk/chair/lamp combinations– bundled product packages being a promotional focus for Walmart– at $69.

In 2010, the weather also has made consumer shopping patterns more unpredictable. Only 3% of consumers said they had purchased back to school products by July 25 versus 6% in 2009, according to a study by The NPD Group. After reviewing the results, NPD analyst Marshall Cohen said consumers are only spending when and if they must.

Hot weather in mid summer, however, made air-conditioned stores more attractive. After sponsoring a study of its own, NRF said that, by August 10, consumers had completed 43.2% of their back-to-school shopping compared to 41.6% at this time last year.

Beyond its significance as the second most important buying season of the year, back to school has become an introduction to and a proving ground for holiday promotions. The trend was evident last year when Walmart offered the first ever sub-$300 laptop from a major retailer and kicked off a price war on electronics that lasted through Christmas.

Lee Cote, principal and managing direct of the retail division at liquidation and investment firm Gordon Brothers Group, has developed a top 10 trends list for the current back-to-school season. According to Cote, retailers should be watching out for:

  • Smart Buys. Consumers are becoming sophisticated comparison-shopping strategists who make cautious, educated purchases.
  • Pervasive Shoppers. Back-to-school purchasers are leaving no sector unturned in a search to find the price they want to pay, a quest that visits dollar stores, discounters, department stores, specialty boutiques, office supply stores, electronics stores and the Internet.
  • Moving Relationships. Retailers are seizing the opportunity offered by social media and mobile applications to communicate more personally with their core customers in a way that, if properly approached, builds return on investment.
  • One Voice. Retailers are attempting to convey a consistent message across all selling and communications platforms they use, from advertising campaigns to online experiences to store-level execution.
  • Needs Versus Wants. Consumers are focusing on traditional back-to-school necessities first, with notebooks and backpacks taking a priority over fashions in a way that may push seasonal apparel purchases back as far as October.
  • Eliminating Extras. Families have adapted budgets to economic circumstances that still seem recessionary and made optional spending on second computers or extra-curricular activities rarer.
  • Brand Versus Bargain. Consumers are more closely weighing which brands are a must have and which can be sacrificed to the take advantage of a bargain.
  • Fast Fashion Facts. The summer heat has helped closeouts as students consider fashions they can wear immediately as well as for autumn.
  • College News. National Retail Federation projections put back-to-college spending at $33.7 billion this year versus $21.35 billion for grades K to 12 as 10% more college bound students plan to live on campus.
  • Delayed Spend. The traditional back-to-school season, which gets on track in mid-July and ends in early-September, will continue deeper into the year as consumers anticipate bigger promotions from retailers who have to move slow-selling products.