Retailers and brands are putting the finishing touches on their final back-to-school displays in time for the height of the season. This year, time- and cash-constrained shoppers are looking for practical solutions to common problems.
While back-to-school spending is still expected to rise, we estimate a slight slowdown this year due to less stimulus from tax cuts and a slumping housing market. As a result, retailers will need to get creative and employ a mix of traditional and new strategies to drive growth this year. Aside from the buzzworthy, bulletproof backpacks now available at Office Depot, four trends are standing out to us so far in the 2019 back-to-school selling season.
Balancing Bargains With Baskets
Low prices have and likely always will be a dominant component of any merchandising and branding strategy. However, this year retailers are emphasizing bulk and quality to boost basket spend. Whereas retailers like Dollar General, Boxed, and BJ’s Wholesale are focusing on teacher discounts, coupon codes, and “Going back with big savings,” Walmart has chosen to emphasize quantity over price with its “Go back big: Everything you want; low prices you love” slogan. Target is combining these approaches by applying significant discounts at certain spending levels, such as $40 off $100 of back-to-college items. Grocers are using BOGO deals to entice larger baskets with savings. Home Depot and Lowe’s, which are gradually realizing the season’s potential for larger baskets, now have a small but dedicated back-to-college section in their stores this year.
Brands Are Back
After years of private label expansion, bigger, national brands are pushing back in key categories with a stronger presence in signs and displays in stores and online. The rise of beauty and athleisure/activewear as categories now extends to back to school, where brands are making big bets that focusing on these items, especially in department and apparel stores, will resonate strongly with shoppers. Walmart is taking a hybrid approach, focusing on private brands for its back-to college assortment and national brands for back-to-school shoppers. On another front, Amazon is taking the lead in redefining brand power by driving purchases through an influencer-sponsored assortment (Figure 1). Interested shoppers can filter back-to-school products by the influencer they like and read that person’s bio on the site for a more personal shopping experience.
Figure 1. Amazon’s Influencer Program
Source: Retailer website
As summer merchandising lingers into August, back-to-school and summer themes combine to blur any clear distinction between the selling seasons. In contrast to previous years, retailers are placing bets that shoppers will contract their shopping times and go on more purposeful trips closer to the start of the school year. As a result, one-stop-shop appeals are on the rise to secure shoppers who may make fewer trips, leaving less opportunity for peripheral players. Convenience-oriented features like checklists and mobile app integration for in-store and online purchasing continue to become more popular to entice discerning and time-strapped shoppers (Figure 2). At retailers like Home Depot, checklists that had been static in the past are shoppable this year.
Figure 2. Target Promotes School Checklists
Source: Retailer website
Programs and Platforms
Increasingly, retailers are using the back-to-school season to drive shopper awareness, membership, and purchasing on other platforms and programs that support their growth strategies more generally. Since back to school is an excellent time to sign up new users and keep them for repeat purchases throughout the year, Amazon has been heavily pushing its Prime Student platform with deals such as heavily discounted Mac computers. The Walmart Grocery platform is promoting and offering back-to-school consumables and even school supplies through targeted emails. In addition, Best Buy is using student-oriented tech deals to entice shoppers into signing up for its My Best Buy program, which offers cash rewards and added tech services.
Stay tuned for our full analysis of the back-to-school season later this month.
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