Sentiment Data Gave Retailers an Inside Edge for Back-to-School Timing and Promotions

Every year retailers try to optimize back-to-school inventory and promotions so that parents and stores alike have a positive shopping experience. With so many store choices, retailers really need to be on top of their game at this time of year.

One important task for retailers is to balance availability and promotion of stock without sacrificing service. Without access to data from previous years or insight into shopper sentiment, however, it's challenging to make adjustments that can drive improvements for future years. Sales data can tell part of the story, but customer sentiment helps fill in the "softer" metrics that numbers alone just can't provide.

We all know the importance of data for improving store performance, but retailers often don't have the time or tools to collect, analyze and apply findings. Luckily, SAP's annual back-to-school social sentiment research gave retailers an inside edge when it came to planning and executing based on how shoppers "feel" about decisions retailers make during important times of the year.

This year, SAP analyzed social media insights from over 3 million consumer conversations online. The findings give retailers real information that can be applied now and during the 2015 back-to-school season.

Don't Rush Families Back to School
Families want to enjoy the summer and don't want to be subjected to back-to-school promotions too early. In fact, this year's social sentiment findings reported that overall consumer sentiment toward back-to-school advertisements didn't become positive until the end of July. Before that time, sentiment hangs lower than negative 20 percent. Granted last year was worse: In 2013, social sentiment toward commercials stood at negative 46 percent for the same timeframe.

The most recent National Retail Federation (NRF) back-to-school survey also confirmed that back-to-school shoppers tend to delay. Its annual survey found that, as of Aug. 12, 2014, fewer families were taking advantage of retailers’ special school savings opportunities. Specifically, nearly one-quarter (23.6 percent) had not started shopping yet, up from 20.9 percent last year.

The lesson here is to let families enjoy the summer without pressuring them to start thinking about the school year too early. Advertisements and promotions pushed out before late July are wasted and may even hurt your image if they push too hard.

Promote Deals at the Right Time
While the research showed that merely running commercials provides little value, deals and sales receive positive sentiment year-round. Social sentiment suggests that retailers should time promotions to match the buying season of certain products — but not too early and not too late.

According to the NRF, 25 percent of shoppers take advantage of late summer deals, crossing items off their back-to-school lists just one week to two weeks before the first day of classes.

Furthermore, sentiment data reports that apparel, supplies and electronics are more likely to be purchased in August anyway, so why aggressively push too early in summer when you risk negative sentiment and have limited sales opportunities? Wait for the right time, when shoppers are more likely to have a positive reaction to your deals.

Customize the Message for the Purchase Channel
In 2013, social sentiment research tracked more chatter around in-store purchases than online purchases. In 2014, the in-store chatter proportionally decreased, with 50 percent of shoppers purchasing online. The research also showed a 13 percent increase in online shopping from 2013 to present. If this trend continues, online shopping is set to outpace in-store shopping in 2015.

Knowing that consumers are buying online for school supplies, it's increasingly important to customize messages and customer support offerings for the buying channel. In other words, what works for print or TV ads may not work online.

A NRF back-to-school survey from June indicated that 33 percent of college students and parents now compare prices online, up slightly from 31.7 percent from 2013. Shoppers are clearly using online resources for price comparisons, but they also make decisions based on online support and service. SAP's research found that many retailers are aware of the shift to online back-to-school shopping, but are failing on providing consistent service and support online. This year, overall consumer sentiment about online customer service ranged from neutral to negative, which can erode customer loyalty and negatively impact sales in the long run. For retailers, providng a quality experience across channels needs to be a higher priority leading into 2015.

Matthew Laukaitis is the senior vice president and general manager of SAP Retail, a provider of retail management software.