According to findings from a new study by Merchant Warehouse, back-to-school shopping is the second-largest retail event of the year, behind only holiday shopping. However,
businesses are failing to use loyalty programs in order to take full advantage of the $72.5 billion back-to-school shopping opportunity, says the report.
Of the businesses running
loyalty campaigns this back-to-school shopping season, 62% are doing so with the intention of building loyalty with customers in advance of the holiday shopping season.
survey of more than more than 100 small businesses that sell "back-to-school" items and over 700 back-to-school shoppers shows that while 85% of shoppers noted that they tend to shop at the same
retailers year after year for back-to-school, 91% said they are "somewhat likely" (65%) or "very likely" (26%) to switch their choice of retailer if a promotion or reward applies. However, only 34% of
retailers studied plan to run loyalty programs for back-to-school shopping this year.
Most shoppers surveyed reported they buy items at the same retailers during both the
back-to-school and holiday shopping seasons, with 58% shopping at a majority of the same stores for both. Shoppers indicated that price is more important to them during the back-to-school season when
compared with other times of year; 53% of consumers list it as their biggest determining factor in where to shop and 66% said they are likely to sign up for a retailer's loyalty program during
back-to-school shopping if offered a discount at the checkout.
58% of retailers surveyed believe loyalty campaigns would benefit their business during the back-to-school
season, although only 34% plan to run a program this year. However, 97% of retailers that ran back-to-school loyalty campaigns last year had positive experiences and plan to run one again this year.
So why are others missing out on this opportunity asks the report.
The most common reason reported (from 25% of the respondents) was that loyalty programs have not been beneficial to the
business in the past. However, of those conducting loyalty campaigns this back-to-school shopping season, 65% are taking advantage of data-tracking and analysis (such as purchase data or demographic
information) technology within loyalty programs to boost the benefit to customers specifically interested in purchasing back-to-school items.
Jenn Reichenbacher, senior
director of corporate marketing, Merchant Warehouse, says "… small businesses are challenged with vast competition in attracting back-to-school shoppers… it's alarming that so many small
business retailers are missing out on valuable loyalty programs… (to) keep existing customers coming back throughout the year… (and) year after year… consumers… (are)
willing to be loyal to businesses year-round based on the business' back-to-school offering… “
Additional individual findings from both Consumers and Businesses
are summarized in the report, and included here…
Consumer Findings Summary :
- Consumers are loyal to businesses they’ve shopped at for
back-to-school items in the past, with 85% typically shopping at the same retailers, year after year, for back-to-school items
- Promotions and rewards will sway consumers to shop at a store
they don’t typically shop at during the back-to-school shopping season, with 91% of respondents “somewhat likely” or “likely” to shop at a store they don’t
typically shop at during the back-to-school season if offered a discount or reward
- Back-to-school shoppers are extremely price sensitive, with 53% stating that price is the biggest
determining factor when deciding where to shop Price matters more during back-to-school than other times of the year, with 41% of respondents stating they’re more price sensitive during the
back-to-school shopping season than other times of the year, and 45% stating they’re more driven to shop at a retailer based on their sales, discounts, or promotions during the back-to-school
shopping season than other times of the year
- Consumers’ most preferred method of redeeming discounts is a plastic loyalty or rewards card
- 66% of consumers are likely to sign
up for a retailer’s loyalty program during back-to-school shopping if offered a discount at the checkout.
- Most consumers shop at the same stores during the back-to-school and holiday
shopping seasons, with 58% shopping at more than 60% of the same stores for both shopping seasons, and 81% shopping at more than 40% of the same stores during both shopping seasons
consumers use 1-5 loyalty programs each month
- Consumers are more likely to buy back-to-school items in-store than online, with 69% typically purchasing in-store, two% purchasing online, and
29% purchasing a mix of in-store and online
Business Findings Summary:
- 58% of retailers agree that loyalty campaigns would have a positive
impact on their business this back-to-school shopping season
- Only 34% of retailers will run a loyalty campaign targeted at back-to-school shoppers this year, a 4% increase from last
- 97% of retailers who ran a back-to-school loyalty campaign last year will run one again this year
- Only 15% of book stores surveyed plan to run a loyalty campaign targeted at
back-to-school shoppers this year
- Of retailers not planning to run a loyalty campaign this back-to-school shopping season, only 18% say they
will not run a loyalty campaign because their business lacks the technology needed, and only 13% say that the technology needed to run loyalty campaigns is too complicated.
- 56% of retailers
responding plan to execute loyalty campaigns over email this back-to-school shopping season
- 56% of retailers are planning to run a loyalty campaign saying that, challenges aside,
they’d execute a campaign via mobile app, and 65% stating they’d execute a campaign via social media, putting aside cost, experience and other concerns.
- Of the retailers running
loyalty campaigns this back-to-school shopping season, 65% will use customer data, such as purchase data or demographic information, to run campaigns targeted at customers likely to be interested in
purchasing back-to-school items
- Of the businesses running loyalty campaigns this back-to-school shopping season, 62% are doing so with the intention of building loyalty with customers in
advance of the holiday shopping season
Additional information may be found here: http://merchantwarehouse.com/missed-opportunities-for-retailers-during-back-to-school-shopping-season