Tax-free shopping holidays grow in importance
Many retailers are also paying closer attention to the growing number of tax-free shopping holidays this summer. Merkle’s Zelcer expects marketers to make sure any back-to-school sales or discounts are timed according to the events.
“Some of our clients are optimizing their promotions to align with the relief periods so they can maximize conversions,” she said.
Indeed, American Eagle’s Brommers said the chain is always watching such dates closely so it can run “hyper-targeted digital marketing” to shoppers in specific regions affected by the events. This year, however, tax-free holidays are one of the brand’s top five priorities as it kicks off back-to-school.
“Even at the CMO level—I’m going into multiple meetings to talk about what we’re doing,” Brommers said. “People will be even more attuned to anything that will provide them with a bit of relief and a bit of saving.”
Several states are offering sales tax holidays during the back-to-school season, but terms vary by state. Illinois, for instance, will offer a 10-day period next month when consumers can buy goods such as apparel, footwear and school supplies with a reduced sales tax. The state is also suspending its 1% sales tax on groceries through June 30, 2023.
Experts also expect retailers will be able to entice shoppers by pairing different products together as a cost-saving “bundle.” Such deals will appeal to budget consumers, but also serve as a way to unload excess or dated inventory, according to Katie Thomas, who leads the Kearney Consumer Institute, an internal think tank at global strategy and management consulting firm Kearney. Shoppers may be turning more to coupon apps like Rakuten, Honey or Ibotta to compare prices across brands and retailers and help with research, she added.
Clever marketing does come into play. “The messaging will be deal-oriented but still positive because that’s what people want to hear,” Thomas said, adding that “sometimes when it comes to deals, it’s just that perception is reality—people like to feel like they’re getting a good deal and the best bang for their buck.”