Back-to-school trends

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Industry insiders share back-to-school shopping trends and tips for retailers.

By Kat Zeman, Senior Editor at Knighthouse Media

As the back-to-school shopping season approaches, online and in-store retailers are preparing to unleash whopping sales and new promotions and marketing campaigns. The good news for retailers is that consumers appear to be ready to spend a lot of money. However, industry insiders suggest that retailers need to be aware of consumer habits for sales to flourish and have policies in place to prevent fraudulent transactions.

“For marketers, back-to-school is a critical period to reach sales goals,” says Dani Cushion, chief marketing officer at Cardlytics. The Atlanta-based company has analyzed more than $1.5 trillion in spend across credit, debit, ACH and bill pay to provide retailers and marketers with insights into back-to-school purchase patterns.

“It accounts for nearly 20 percent of non-winter holiday spend among families,” she says of the firm’s analytics. Every year, Cardlytics takes a look at back-to-school spend to understand consumer behavior. The company has found that for the past two consecutive years, retail spend grew faster during the back-to-school shopping surge than at any other time of the year.

Its latest report, with data spanning from 2015 to 2017, seeks to identify the change in spend across in-store and online channels over time and looks at how Amazon Prime Day (June 21) impacts spend among each channel. “Again, we’re seeing that Amazon Prime Day continues to have a significant impact on back-to-school spend, pulling it earlier every year,” Cushion says. “However, traditional retailers are getting smarter at capturing some of those early dollars.”

School3In 2017, brick and mortar online spend stayed flat for back-to-school versus the decrease it has seen in pervious previous years. “This indicates that retailers are pushing their back-to-school promotions earlier in the season, to run in line with Prime Day,” Cushion adds. “We also see Prime Day driving increased spend among consumers. Customers who shopped the week of Prime Day spend more overall in every channel during the back-to-school season.” Some other Cardlytics’ insights and tips into consumer purchase patterns that retailers may want to consider this year include:

* Prime Day shoppers are big spenders in every channel, spending up to 23 percent more than customers who don’t take advantage of Prime Day.

* Online shoppers often fill their baskets throughout the year and hold off on making a purchase until they see a major sale, leading to bigger online baskets this time of year.

* More than 73 percent of back-to-school shoppers made their purchases exclusively in-store. However, these consumers still prefer digital deals over paper coupons.

* Post back-to-school marketing campaigns are key. It may be tempting to hold off on promotions until the winter holidays, but it’s important for merchants to stay top-of-mind all year ‘round to strengthen brand loyalty.

“Retailers should consider launching early summer back-to-school campaigns to capture some of the spend that we see taking place in the July timeframe,” Cushion says. “Back-to-school is also a great time to engender loyalty for the rest of the year. After the back-to-school season ends, retailers should launch post-back-to-school campaigns to keep their brand top of mind leading into the winter holiday season.”

Protecting Consumers

Aside from looking at consumer behavior and spending habits, retailers should also focus on having effective fraud prevention strategies in place. Back-to-school season is also a prime season for fraudsters. “Back to school is a busy season for people buying electronics,” says Lisa Rankin, vice president of marketing and partnership at Accertify, a global fraud prevention company. “There will be a higher than normal transaction volume and higher than normal order size. Fraudsters know that and use it as an opportunity to attack and place fraudulent orders.”

One of the biggest challenges facing retailers is the growing popularity of buying online with in-store pickup. Online fraudsters will often work with a local criminal counterpart who lives close to the targeted store. Since retailers are trying to make in-store pickup as fast as possible, it doesn’t often give them enough time to authenticate transactions. Accertify has four fraud prevention tips for retailers:

* Leverage machine learning models. Automated fraud screening systems powered by machine learning can help businesses reduce fraud. They analyze and lever a number of variables and improve predictive power. The analytical results enable more identification of risk and require less human intervention. “It allows retailers to better identify likely fraud orders from legit orders,” Rankin says. “The larger retailers will typically have a software provider that allows for orders to go through machine learning. Smaller retailers may have built something in-house.”

* Have simple in-house rules for managing fraud. This could mean simply limiting the number of iPads a customer can pick up at a given time.

* Collect and analyze data on the device making the transaction. It’s typically a Java script that will tell the retailer where the computer is transacting from, if there’s malware on the device, etc.

* Good communication between the loss prevention team and other departments such as marketing and IT. All departments should be aware of special promotions and the retailer should have a policy in place on how employees should handle suspicious transactions.

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