Advertisers Miss Back-to-school Oportunities

Richmond’s back-to-school sales tax holiday weekend has come and gone, and Labor Day (which the start of school must come after, according to Virginia law) is still to come. So let’s take a look at what, if anything, the barrage of tax holiday advertising for back-to-school merchandise accomplished.

There sure was a lot of it.

That, at least, makes sense, since, according to PointRoll, whose research has tracked consumer retail shopping patterns over the past three years, “Back-to-school season…represents a vital period for certain manufacturers and retailers who do some of their biggest business as families and students stock up on gear for the new school year, ranking second only to winter holidays.”

But much, if not all, of the other things they do makes little sense when you think about it analytically.

“[W]e’ve witnessed major retailers throw at it bundles, up-sells, bulk discounts, co-branded promotions, free shipping, buzz agents and every other conceivable sales trick,” writes Jonathan Salem Baskin in Advertising Age, “And yet it’s hard not to think that they’ve missed the boat.”

They have, in five significant ways.

Missed opportunity #1: Shifting timing instead of building sales

The premise behind the tax holiday weekend seems to be that if you get everyone to do their back-to-school buying over the same weekend, total sales will somehow skyrocket. Maybe the presence of all the parents buying back-to-school stuff at the same time will inspire an impulse-buying frenzy. Maybe the prospect of saving a big 5% on state sales tax will inspire spending 10% more on merchandise. Or maybe trenchant advertising will give one manufacturer an overwhelming gain in brand preference and share.

It won’t, for reasons discussed below.

If this were, say, New York (8.875%) or California (10.75%), the sales tax savings might make a bigger difference. But Virginia consumers can avoid our 5% tax in the comfort and convenience of their own homes, by buying online from vendors who offer free shipping (and often better pricing).

It’s not as if there were that much upside potential, either. “Kids grow up,” Baskin notes, “so lots of this year’s purchases are required to replace stuff from last year that no longer fits.” Also, all the notebooks that were written in and the pencils, pens, markers, crayons, etc., that did the writing.

But that’s a zero-sum game. The most tax holiday weekends can do is shift the timing, not the total amount or value of purchases. They work just like Cash for Clunkers or the first-time home buyers’ tax credit – and you know how well those turned out.

Missed opportunity #2: Being out of touch with your audience

According to Baskin, back-to-school marketing “presumes that [stores and manufacturers] never before met their customers, and as if this is the first time their target audiences have gone shopping for school stuff.” This presumption is grounded in fantasy, not reality, because “[e]very family shopping for school this year had to shop for it last year, save those of newly minted kindergartners…They already know the game, from who has the best selection, sizing and quality, to when to catch the best prices…”

Which leads to the next missed opportunity.

Missed opportunity #3: Being out of touch with the calendar.

Tax holiday weekends and their attendant advertising work as if all parents were gluttons for punishment who did all the back-to-school shopping at once.

They don’t.

PointRoll’s analysis shows that “manufacturers and retailer of Apparel and Office and School Supplies (OSS) reduce their efforts by 75% from their peak at the end of August and prior to Labor Day.” The problem is, that’s just when lots of consumers are just starting to pay attention. Or they’ve lost it. PointRoll data show that parents are still interested in in apparel and OSS “into September and after school started” – after the advertising has gone away. For computers, consumer interest peaks in early summer and tapers off by end of August – mostly before the advertising starts.

Missed Opportunity #4: Same old same old advertising message

Since virtually all back-to-school shoppers have been doing this for years and know the ropes, Baskin wonders why “[t]he ad creative is frighteningly similar across brands, evoking variations on the theme of ‘we have low prices on whatever you’re looking for.'” It’s generic rather than specific, it’s self-referential instead of audience-oriented, it talks features (inventory and pricing) instead of benefits, and in any event, the parents have been hearing it over and over since their oldest kids started kindergarten, if not preschool.

So is it any wonder they ignore it?

Missed opportunity #5: Myopia

It’s as if kids spent only one year in school, or their parents had mid-term amnesia.

The marketers and their advertising treat each back-to-school period as if it were a discrete, unique event rather than one more step in a nine- to thirteen-year process. This approach throws away an opportunity to build long-term loyalties, which are important because the best new customer is a satisfied, loyal previous customer.

“[W]hy aren’t [advertisers] strategically marketing their…brands and selling an ongoing relationship with their customers instead of pitching tired old sales promos as if they were total strangers,” Baskin asks. He goes on to suggest some “ways retailer CMOs could recognize last year’s shopping behavior in order to prompt it this year.” Here are a few of them:

  • Shopping Guides that alert parents to which stores have which merchandise in which sizes, with inventory updates. You could even customize this by giving parents a way to key in their kid or kids’ size(s).
  • Replacement discounts for parents replacing items their children have outgrown in selected categories . The outgrown clothes go to charity (with appropriate publicity), the parents save money on replacements of the same brand, and advertisers save on the cost of wooing new customers by incenting repeat ones.
  • “Frequent student” programs like airline frequent flier programs. Families accumulate points for their purchases from the brand over the years and can redeem them for specific rewards (maybe even participation in state prepaid collefe tuition plans).

As you can see, there are lots of boats (or, more appropriately, school buses) that apparel, OSS, computer and other back-to-school marketers are missing. Maybe it’s time for them to go back to school themselves, take some refresher Marketing 101 courses and come up with ways to improve their schoolwork next year if they don’t want to be left behind.

3 Comments

  • Zachariah Barbin on Feb 07, 2011 Reply

    Really it is quite useful post and i also like to read these techniques and even We are giving it a go and thank you sharing such type of techniques please keep it sharing.

  • bgoldman on Aug 31, 2010 Reply

    Thanks for your very thoughtful and substantive input.

  • Ellen Sorstokke on Aug 31, 2010 Reply

    This concept applies well to B2B as well. Constantly building future customers, including repeat traffic, is at least as important as selling a particular widget today. Granted, this is marketing thinking not salesman thinking, but without long-term product development [think of your business as a product] the “today” sales won’t happen.

    Wholesalers [all kinds] who sell products that have “retail seasonality” [any kind] need to build demand by routinely reminding their retail dealers of products/services that are available from you. The year-round messages need to bring your business to mind as their first choice supplier. Further, it pays to offer off-season deals [including 1-piece “sample” order requirements] to retailers so they can do a touchie-feelie in their store environment.

    Since there are still quite a few mom and pop retailers who probably don’t make it to every trade show and may or may not have road reps calling on them, this method gets the product into the dealers’ hands at minimal cost to everyone. The retailer pays for the product and can show it to customers, treating it initially as a “what do you think?” or “this is something new” type of item.

    Assuming the product isn’t complete junk, the dealers will sell them, if not immediately, then when the season arrives: people who have seen it in their stores and/or heard about it from someone who has are likely to remember it and come back for it — especially if there is some kind of promotion before and during the “season.”

    For retailers, building seasonal inventory [and customer demand] without using every penny of their credit lines or getting trapped into high-interest payment plans, i.e., spreading out their purchases/deliveries whenever possible, and for everyone who wants to minimize the seasonal product-handling [shipping/receiving/display] crunch in their warehouses/stores, extended advance promotions [months before the last minute seasonal business] are necessary. [Admittedly, this can be all but impossible for some types of products, especially those having fashionable whims as a key selling factor.]

    Note that the above applies to “seasons” with some overlap. In this instance, back-to-school [BTS] and XMAS can be viewed as all one thing. The retailer needs to have some XMAS items on display before the BTS shopping starts. BTS shopping, which nearly always involves a lot of “no,” can still provide the shoppers with ideas for XMAS. A 10-year old gets a trumpet for the school band and the younger siblings want something, too. They might get a kazoo today, but how about a ukulele for XMAS? Ukes are very affordable [stocking stuffer range], involve transferable skills and are age-appropriate down to about 2 years old [through adults]. If the trumpet student is doing well, convert the rental to a purchase at XMAS.

    Customers have usually been in a retailers establishment [or on their website or viewing catalogs/magazines or seeing/hearing TV/radio commercials] at some point prior to the actual purchase to “shop.” Note that “shop” is not synonymous with “buy,” especially where kids and/or higher priced items are concerned.

    Kids may know they have no chance of persuading their parents to buy a particular item prior to a set time period, but that doesn’t keep them from determining exactly which item they want and why. If you think kids don’t work on their parents to get that item, you’ve either never had/been around kids or you’ve forgotten your own youthful behavior.

    Kids can be very sophisticated shoppers. And, smart sellers treat them as if they had the cash to pay today. Actual purchase may be minutes or years away, but the kid remembers how he was treated and will want to go back to that store — hopefully for all subsequent purchases as well.

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