Mall Retailers Are Getting Smarter About Back-To-School
Author: Joan Verdon
Source: Forbes.com
It used to be, back before the rise of online shopping, that the back-to-school shopping season ended before the first day of school.
Moms stocked up on clothes for the entire school year and kids tried on sweaters and corduroy pants and winter coats in the August heat.
The stores set the timeline and the moms obeyed. They were motivated to shop early for the best selection. Popular items would sell out, and not be reordered. If you waited until you needed it, say January or February, to buy that winter coat you were out of luck, because that was when the stores decided you should be buying spring clothes and bathing suits.
Fast-forward to the online era, when you can buy anything any time you want it, from a winter parka in June to cargo shorts in the dead of winter. Consumers caught on pretty quickly that they didn’t have to buy when the stores said they should, because they could easily find what they wanted online, anytime of the year.
The brick and mortar stores did not catch on quickly. They stuck to the old timeline of rolling out fall and cold weather clothes in July and August for about a decade longer than they should have. But they now have figured out the new rules of back to school.
A tour this week of Westfield Garden State Plaza in Paramus, N.J. - a 300-store suburban shopping center dubbed the “most influential mall” in the United States by the New York Times because it is a favorite of Wall Street analysts – showed that mall retailers have learned the following back-to-school lessons:
1) Teens (and parents) want to buy “wear now”, not winter wear.
The sweaters that would have been on display ten years ago are gone, replaced with short-sleeved t-shirts, and clothes appropriate for late-summer clothes, including some back-to-school shorts.
2) There’s life (and an opportunity for clothing sales) after Labor Day.
Three analytics firms that track shopper traffic and behavior – Sensormatic Solutions/Shopper Trak, which has shopper-counting camera in stores; Placer.Ai, which measures the movements of mobile phones; and Spatial. Ai, which analyzes location-based social media activity - all agree that August is the peak month for back-to-school shopping. The busiest week of the month varies by region, they say, because schools in the South and West open two to three weeks before schools in the Midwest and East. But that doesn’t mean nothing happens after Labor Day.
Parents of younger children are more likely to complete clothes shopping before school starts. Executives at The Children’s Place, the largest specialty clothing chain for elementary-school kids, said August 21 that their back-to-school season was largely over by then.
Teens however, keep some of their (or their parent’s) clothes budget in reserve until after school starts, to see what the cool kids (the key influencers at their high schools) are wearing. At Westfield Garden State Plaza, the Saturday after Labor Day, the first Saturday after school begins in New Jersey and New York, typically is a busy day.
According to Bjoern Petersen, president of Sensormatic Solutions, Columbus Day weekend is the next period after Labor Day when store crowds peak. That is when a second, late round of fill-in clothes shopping occurs, for cooler weather clothes as well as things the cool kids are wearing.
Griffin Morris, co-founder and vice-president of product at Spatial.Ai said social media activity in the category Spatial.Ai calls student life picks up in September and October. He sees that as a sign that “there is probably a little bit of a delay on when are people fully in the school mindset,” and a possible marketing opportunity for retailers.
3) Be smart about markdowns
In previous Augusts, by now every teen store in the mall would have signs screaming 50%, 60% or even 70% off. This year there were surprisingly few of those signs as of Tuesday, with fewer outward signs of markdown desperation in the mall than in years past.
This year, big storewide discounts were more the exception than the rule. Aeropostale was advertising 50-70% off and the sign at Forever 21 shouted “70% Off.” Zara, Justice, Foot Locker, Kids Foot Locker, Journeys, Journeys Kids, Zumiez and Timberland had no signs announcing storewide discounts.
A number of retailers were using their 50% off offers to drive additional purchases, including Lucky Brand (“Buy one, Get One 50% Off) and American Eagles (“Buy One, Get One 50% Off on Jeans, Joggers, and Shorts”). Hollister went with a one-price strategy, with an “All Jeans $25” sign.
Sneaker and sportswear chain Van’s back-to-school promotion is designed to bring shoppers back after school starts. Customers who spend $65 or more between August 2 and September 11 get $25 off of their next purchase of $65 or more between Sept 13-30.
Who will get the best back-to-school grades?
Despite the signs that mall retailers are getting smarter about back to school, most analysts are predicting that Walmart, Target, and Amazon will eat their lunch during this year’s school season.
Ryan Fisher, a partner in the consumer and retail practice of A.T. Kearney notes that Target, Walmart, and Amazon have been developing strong apparel brands for children, which will boost their sales.
One key reason why back-to-school season is important for mall retailers is it is an event that draws shoppers to stores. Consumers say they are more likely to go to a brick and mortar store, than to shop online, for school supplies and clothing, according to a Sensormatic Solutions survey.
The National Retail Federation is predicting back-to-school sales will reach a record per-family high this year of $696.70, but because fewer families have school age children, overall spending will drop to $26.2 billion, down from $27.5 billion last year.
Other forecasters are less optimistic. Coresight Research expects sales growth of 2-2.5%, a significant slowdown from last year’s 4.4%. Deloitte predicted at the start of the season that sales would be flat.
That means more competition for back-to-school dollars. How well mall retailers learned their lessons will be determined when get their back-to-school sales report cards - their third quarter earnings results.