A Return to Normal for the Back-to-School Shopping Season
Back-to-school marketers have dealt with a volatile and challenging past couple of years. At the start of the pandemic, schools closed their doors and back-to-school shopping was focused on technology that would allow students to learn from the safety of their homes. Once schools reopened, many adopted a hybrid approach where at-home technology was still crucial for a student to be able to learn, but traditional back-to-school items became relevant again for when students were in fact in the classroom. The need for personal protective equipment (PPE) also emerged as parents wanted to keep their children safe when they were in the classroom.
This year, things are a bit different. We're still seeing external factors create pressure for families who are starting their back-to-school shopping, but the pandemic-driven volatility of previous back-to-school seasons seems to be behind us.
Today, consumer dollars are stretched thin. Inflation continues to surge and consumers are feeling the effects. Furthermore, supply chain issues are making it harder for retailers to keep shelves and warehouses stocked to meet demand. As a result, they’re facing higher costs on the backend and are struggling to increase their margins.
Marketers might look at this and think that this means the back-to-school shopping season is going to be difficult. They might think there isn’t an appetite among consumers to spend on new clothes, bookbags, lunch boxes, etc.— opting to reuse items from previous years as a way to minimize their spending needs.
They would be greatly mistaken, however, and marketers who chose to dial back spend due to these fears will likely miss out on a great opportunity.
Inflation Surprises Marketers With Minimal Consumer Impact
A recent study from Rakuten Advertising found that a significant number of parents (41 percent) have made no changes to their budget or number of items they plan to buy due to inflation. Seventeen percent of parents have actually increased their budget, but plan on reducing the number of times they need to make a purchase. This means that shopping carts are going to be bigger, and the ability to attract new-to-file (NTF) or returning purchasers will have even greater stakes than years prior.
Although inflation isn’t holding people back from spending, there is still a limited amount of money to go around for retailers. Nearly 80 percent of shoppers plan on spending less than $500 this year on their back-to-school needs. With budgets being limited to a few hundred dollars and with more consumers planning on making fewer shopping trips, marketers need to invest heavily in performance strategies that will help move the needle.
How to Pull Those Shoppers In
For marketers to make the most of this busy back-to-school shopping season they need to first understand where and how consumers are planning on shopping. The Rakuten Advertising report shows that there’s no clear answer here. Instead, consumers are incentivized by different rewards strategies and look for shopping inspiration in different places.
There really is no stand out “winner” when it comes to how marketer budgets should be allocated. Instead, marketers should be investing in cross-channel strategies, paired with unique and engaging incentives to create and deliver offers that appeal to the most shoppers possible.
Going all in on one publisher type or platform is going to leave a majority of back-to-school shoppers behind, and retailers will risk losing a ton of visibility.
Back-to-school marketers have a real opportunity to earn significant share of wallet if they diversify their strategies and ramp up their spend. Most consumers have already started their back-to-school shopping so marketers that are falling behind should take action now.
Anthony Capano is managing director at Rakuten Advertising, a company that connects advertisers with valuable audiences and helps publishers monetize their content.
Currently the Managing Director for Rakuten Advertising (operating as a division of Rakuten, Inc. one of the world’s leading Internet service companies) whose services include Performance Channels - affiliate marketing, display/retargeting, search and omnichannel attribution and Media - Rakuten TV, Rakuten Viber, Rakuten.fr, Rakuten.de and Viki. Leading the Australian business since its days as a start up, launching it's APAC operation and now overseeing the International regions of EMEA, LATAM and APAC based in London.