Monday, August 11, 2014

An Educated Consumer May Have Been Sy Syms' Best Customer, But Today They’re More Difficult To Engage!


The 2014 Brand Keys Back-to-School report card is in: households with school-aged children (pre-school through 12th grade) plan on spending more – an increase of 9%, and an average spend of $655.00. That’s according to 8,300 families with interviews collected by telephone and central location intercept, to account for the surging number of cell-phone only households.

Preferred retail categories indicates an increase in anticipated use of all retail platforms this year except catalogs, although, to be fair, some of those consumer purchases have shifted from hardcopy to digital. Online has, of course, been growing and increased use of mobile outreach is responsible for this year’s significant growth for that specific platform. Consumers have come to expect discounts for, well, everything, so virtually everyone mentions “Discount Stores,” although that was up a bit too.

Discount Stores                  99% (+2%)
Online                                 93% (+30%)
Department Stores             35% (+25%)
Office Supply                      30% (+20%)
Specialty Retailers              34% (+13%)
Catalogs                              30% (-5%)

This year, the top-10 list most popular retail and e-tail brands consumers mentioned as places they intended to shop included:

Retail                                     E-tail

1.         Wal-Mart                                Amazon.com
2.         Target                                     Walmart.com
3.         Macy’s                                    eBay.com
4.         CVS                                        Kohls.com
5.         Best Buy                                 Macys.com
6.         TJ Maxx                                  Zappos.com
7.         Staples                                   Overstock.com
8.         Footlocker                              Gap.com
9.         Payless                                   Nike.com
10.      Apple stores                            Target.com

Some of this reflects the consumers’ perceptions of a slightly improved economy, but it also reflects a definite need to re-stock. For clothing and shoes there’s no way to get around children’s growth spurts. But the figures also represent a shift in consumer buying habits.

Retailers started running official Back-to-School ads in June but they’ve been discounting and couponing continuously for the since the beginning of the year for, well, everything. “Back to School” is yet another way to position promotions in the low-lower-lowest pricing retail marketplace.

Nearly 35% of these marketing-educated consumers indicated they’ve already bought and stockpiled supplies getting ready for the first day of school. Another 25% indicated they would wait for the ‘Summer Sales.’ The remaining 40% are waiting till the last minute. Retailers have spent more than a decade teaching consumers they can get something cheaper or of better value if they just wait longer or look a little harder, and consumers have graduated with honors. And a mobile device in their hands!

Speaking of mobile devices, it’s also worth remembering that bigger ticket items like tablets and smartphones and computers, which in years past had been traditionally been purchased at the start of the school year, are now purchased throughout the year, so parents don’t feel the need to upgrade just because classes are starting.

It was Sy Syms, the off-price clothing entrepreneur, who observed, "an educated consumer is our best customer." But as most consumers now have their Doctorates in Marketing, compliments of the sustained efforts of retailers, they expect a lot more. Particularly when it comes to value. More particularly when it comes to value that will engage them and get them to behave more positively toward one retailer or e-tailer than others. Value, of course, isn’t just pricing, it’s brand, brand differentiation, shopping experience, customer service, brand engagement and a raft of other things consumer have come to expect as a rite of retail passage. Retailers that can engage consumers and are seen as surrogates for added-value will always benefit. Consumers not only believe that, they act that way in the marketplace.

And that’s a fundamental lesson all retailers need to learn.


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

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