"Never price less any time you can be making more profit," should be the mantra of every successful retailer from enterprise on down. This is especially true of holiday selling, including the upcoming back to school shopping season. Here are some highlights of the 2015 NRF Back To School Shopping Survey, followed by "10 Very Smart Back To School Selling and Pricing Strategies for Retailers" outlining what retailers must do to drive increased retail revenues and margins during "the second busiest shopping time of the year."
First, some highlights from the 2015 NRF Annual Back To School Shopping Survey...
*Total combined spending for back to school and college is expected to reach $68 billion in 2015. (Down 9.3% from $75 billion last year, according to Phil Wahba writing in Fortune).
*Families plan to spend an average of $97.74 on school supplies like notebooks, pencils and backpacks, the second-highest amount since the recession.
*$630 is the amount the average family with children in grades K-12 plans to spend on back-to-school shopping.
*$899 is how much the average college student or college family plans to spend on back-to-college shopping.
*29% of households with school-age kids (6-17) plan to spend more than last year for back-to-school (compared with nearly 24% who said the same thing one year ago).
Some general shopper trends to watch...
*Mobile browsing and buying: More than three-quarters of college shoppers own a smartphone, and for the first time, more than half own a tablet. This year, 41% plan to use a smartphone to research products and compare prices, and 46% will use a tablet to shop.
*Online shopping and shipping: When shopping online, 9 in 10 back-to-college shoppers plan to take advantage of free shipping. Nearly half of online back-to-college shoppers plan to use ship-to-store or in-store pickup services.
*Digital: Consumers who use digital while they shop convert at a 20% higher rate compared to those who do not use such devices.
*Social Media: Consumers who access social media during the shopping process are FOUR TIMES more likely to spend more.
To meet these challenges, here are 10 Very Smart Back to School Pricing Strategies for Retailers…
1. Use analytics and study previous pricing behavior. Review historical data on back-to-school pricing, products and trends. Study what direct competitors did and when -- and use science and scientific data to put yourself in the best possible position for price and inventory optimization.
2. Concentrate on the core back to school categories. School supplies, electronics, apparel and accessories are the key areas retailers need to be most price-competitive.
3. Optimize back-to-school assortments. Bundle back-to-school products and look for opportunities to add to the overall basket-of-goods with higher margin items.
4. Look for opportunities to leverage private-label goods. This is always good practice for improved sales and more difficult competitive matching.
5. Appeal to customer-related sensitivities. Encourage loyalty programs, personalized promotions, offer digital coupons. A more relevant and tailored experience will lead to loyal and valuable customers.
6. Create a seamless online to offline experience. Insure in-store inventory reflects what is online -- and online inventory matches what is being offered.
7. Make shipping attractive. Consumers are 66% more likely to purchase back to school supplies from online retailers who offer free shipping.
8. Consider the differences among regional markets. When it comes to regional markets, there is no one-size-fits-all. Pay close attention to local school start dates. School calendars differ by grade, region and local school districts, so it is important for retailers to align pricing and promotions to local market dynamics.
9. Make sure your customer-facing employees are armed with real-time competitive intelligence. Prepare your staff to provide a more personalized experience (in the store and online). Ensure that associates are informed on campaigns and promotions, have ready access to up-to-the-minute competitive pricing, product availability and shipping terms. Staff up during days/hours when visits (or phone ins) are expected to peak and adjust in real-time.
10. Apply back-to-school discounts sparingly to avoid giving up margin unnecessarily! Thirty percent of back-to-school shoppers in the NRF study said they will wait until one or two weeks before school to start shopping, up from 25% last year, so beware of when you think bargain pricing will happen -- or if it will happen at all. No real shopper bargains were found until a week after Labor Day last year.
Never price less any time when you can be making more profit!!!
Here's the NRF Infographic on Back To School 2015...
Sources: National Retail Federation, Deloitte, Fortune, ShopperTrak