The forecasts for back-to-school sales are important, both as major contributors to many retailers' yearly numbers but also as an indicator of whether holiday sales will be good or bad. Most experts put this year's school sales at even to a few percentage points above last year -- and that was before the government almost reneged on its debt and the jobs picture flat-lined.
The truth is that such a tepid (and small) forecast was always more of a hope than a prediction, but with it came an interesting observation: Store traffic has and will likely continue to decrease, so any sales will come from a fewer number of shoppers buying more than they did last year. This is a big deal, made only bigger by the fact that most retailers seem incapable of admitting it, let alone doing something about it.
You should thank your lucky stars you're not a retailer CMO. If you are, you have my condolences. Skip the rest of this article and go get yourself onto one of those marketing panels where you can wax poetic about brands and tweeting and whatever. The 2012 job market is going to be of particular interest to you.
Here's a simple illustration of the problem: Are you aware of a retailer doing anything new or interesting this year compared to last? I'm not talking about creating great ads, placing product in webisodes, orchestrating complicated "like" campaigns via Facebook, or any other communications artifact. That's easy stuff, and it's the same throwaway stuff that any marketer can create for any brand, especially those doing business on the web. I understand that many retailers are banking on exclusive apparel lines, which seems like a high-stakes crapshoot to me. It's also nothing new.
It's as if these retailers have never "met" their customers before, and each year need to troll to find them. But surely that 's not the case. Every family shopping for school this year had to shop for it last year, save those of newly minted kindergartners. They have rituals around this activity, along with specified budgets and limited time. They already know the game -- from who has the best selection, sizing and quality to when to catch the best prices and how to facilitate returns. There's no possible way that one store will possess "the shirt" that everyone wants, or that it will for long. The funniest marketing rarely translates into the best sales.
And there are fewer shoppers this year than last. So why aren't retailers selling an ongoing relationship with their customers instead of dressing up tired old marketing ideas and talking to them as if they were total strangers? It seems like such a duh-level idea that I hope I'm simply too dim to understand why it's not happening. The only truly interesting thing I can find is Kmart's in-store layaway program, which it has expanded to allow college students to stretch their payments out over four weeks. I floated four similar relationship-based possibilities in this column exactly a year ago, and they're worth reviewing.
1. Shopping Guides. Why not tell customers which stores have merchandise in the right sizes for their kids? One of the worst experiential drawbacks of real-world shopping is digging through a pile of clothes without finding the right item. How about a ticker that updates me on item status either weekly or, if I'm really on the verge of shopping, daily? Couldn't customers enter and update sizing information in their customer accounts? Sales promo info could be keyed to this availability.
2. Trade-ins. Kids grow up, so lots of this year's purchases are required to replace stuff from last year that no longer fits. Why not let customers subscribe to some level of merchandise (say, underwear, or basic T's) and by doing so get some incredibly good (and guaranteed available) deal? Customers could literally bring in the outgrown merchandise for the annual swap (great charity tie-in here). Why not have a subscription for "the latest, craziest fashion statement" items that are sourced and offered with kid involvement leading up to September?
3. Replacement Purchases. Like trade-ins only without the subscription, how about proactively offering customers replacement items on things they purchased in the past? There are algorithms to compute likelihood that things have been outgrown or worn out. Why not offer better prices on items for customers who would be repeat buyers in a category, like winter coats, or shoes? Customers could enter the items they're interested in replacing far earlier in the year, and perhaps there's a group-buying function, too?
4. Multiyear Benefits. What retail brand wouldn't like to have the committed repeat business of multi-kid families? So where are the frequent-buyer points that add up like airline points, with elite levels getting access to special store hours and other benefits? Annual patronage would be required to keep the accounts "active," which would bring folks into stores. Where are the extra ease-of -use return programs for repeat customers, or whatever other operational benefits that might make visiting a store more attractive than sitting in front of a computer to do all that shopping? A better approach to changing rooms would be my two-cents contribution.
I just don't get it. Offering such true relationship marketing would constitute a far better loyalty program than any CRM email campaign or pointless chat on a social-media platform. Back-to-school shoppers must shop -- it's not an impulse or option, but rather more like taking the car in for a yearly checkup -- so why don't retail brands re-imagine their strategies and recognize the dimensions of that behavior? Where are the agencies and consultants with the guts to propose some real, large-scale innovation?
No wonder the outlook for the season is flat. Think of what it means for the holidays. Even if it's too late to save this year, perhaps retailers will finally come to their senses and start planning to do something truly different next year. My bet is that different CMOs will be making those decisions.