What US eCommerce retailers need to know about this year’s back-to-school shopping madness
It’s July, and the school holidays are well underway.
However, in over six weeks time our kids will be forced to retire their water pistols, step away from their iPads and kick the habit of cake for breakfast. It’s back-to-school time, meaning parents across the country can breathe a sigh of relief.
But, as K-12 students prepare to say goodbye to their summer freedom, parents brace themselves to say goodbye to their paycheck — as the daunting deluge of back-to-school-shopping approaches. New figures from Statista show that total BTS expenditure in the US amounted to $29.5 billion last year, a 20% increase from 2015.
So, what does this mean for US retailers? Asides from the smug rubbing of hands and slapstick dollar signs in the eyes, it’s the most competitive period for eCommerce companies — meaning they have work to do before they bring in the bucks.
In this article, we explore the BTS predictions for 2018, how they compare to previous years and provide some invaluable tips for US retailers hoping to capitalize on the spending spree.
As if last years’ $29.5 billion wasn’t enough cash to splash on stationary, The National Retail Federation is predicting $30 billion will be spent on school essentials this year.
Compared to the $25 billion projections in 2016, this figure has increased by a massive $5 billion in only 2 years — proving the BTS sector is on the rise and shows no signs of slowing down.
With Black Friday and Cyber Monday also on the horizon, the following months pose a range of challenges that businesses will need to overcome if they’re to penetrate the market effectively — it’s not just the students having to do their homework.
In a 2016 survey, industry experts Field Agent found that 53% of parents agree that BTS spending is a “strain” on their personal budget, with a further 24% strongly agreeing with the statement.
Those figures increased in 2017, with 57% agreeing and 25% strongly agreeing, and again in 2018 — rising considerably to 80% of parents agreeing with the statement.
In addition, Deloitte’s 2018 BTS survey uncovered that 59% of parents ranked price as the highest priority when they bought BTS supplies. Interestingly, only 26% of participants marked quality as a priority, down from 38% in 2016.
Clearly, price and bargain hunting has been and continues to be a major factor for parents when shopping for BTS products, something which retailers should keep in mind.
The same Deloitte study found that 57% of shoppers plan to do their BTS in-store, with 20% of parents still undecided whether to shop virtually or physically. This entails a huge opportunity for retailers, as $5.5 billion is still up for grabs amongst those indecisive shoppers.
Furthermore, omnichannel methods are becoming increasingly popular and convenient for busy parents, with more than ever favoring the following: Order online, pick up in-store (52% in 2018 vs 42% in 2017); App-based ordering (41% vs 39%); curbside pickup (24% vs 18%) and ordering using voice-apps, such as Amazon Echo (now up to 12% of parents).
In 2018, Amazon is predicted to be the third most popular retailer for BTS supplies, with 57% of parents expecting to turn to them for necessities.
Walmart (91%) and Target (65%) are the two market leaders, with Dollar Tree, Dollar General, Staples, Walgreens and Office Depot popular choices, although far behind the market leaders.
These figures are similar to 2017–16, with Amazon taking a larger percentage of market share from other retailers. Evidently, they’re setting the benchmark for BTS retailing and companies should take a leaf out of their book if they’re to replicate such success.
In terms of competitor’s promotion activity, retailers typically start running BTS adverts in June but they start discounting and couponing continuously for these products at the start of the year. This suggests that to keep up with rivals, retailers may have to begin the work earlier than expected.
Top Product Categories
To give them an indication of what to discount and push, companies need to know which products are popular and drive the most profit.
Deloitte’s 2018 study also quizzed shoppers on their favorite product categories, providing retailers with this key insight.
The most popular range was Clothing and Accessories –with $15.1 billion forecast to be spent on these products in 2018, suggesting this is an area in which retailers should focus on.
Second most popular was School Supplies i.e. stationary and files, with $6b predicted to be spent on them over the coming year.
Next up was Computers and Hardware with a $3.7b projected market spend — however, this category yielded the biggest average price per unit at $299 — indicating these products could catapult retailers into profit paradise should they sell enough of them.
Back-to-school top tips for retailers
With all that in mind, what are the key areas US retailers should focus on in order to capitalize upon the BTS mayhem?
- Keep prices competitive
According to Deloitte’s 2018 BTS survey, more than half (59%) of customers value quantity over quality when it comes to back-to-school products. In the challenging competition of the BTS period, retailers shouldn’t be afraid to introduce flash sales and regional offers to keep them ahead of rivals.
- Emphasise in-store promotions
Yet, it’s been found that more customers are likely to stick to the traditional roots of shopping and do it in-store. (57% of them, to be exact). Retailers should apply these special offers in their shops, in order to target the maximum number of customers and drive sales effectively.
- Use BitRewards
BitRewards loyalty system magnifies the retailer’s revenue by a significant percentage. At the same time, it gives merchants a huge advantage over competitors as they give a flexibility to their clients to use either regular loyalty points and bonuses or a liquid and tradable asset — BIT token. And it is easy to guess what customers will choose.
Besides, the stores are capturing a crypto-enthusiast market, which is active and embraces the attention of regular businesses. Subscribe to pilot test right now: https://join.bitrewards.network.