Tax-Free Weekend is upon us! Most retailers are very familiar with the back to school season. In the middle of the sweltering August heat, it’s the second biggest shopping season in the United States. Last year, Americans spent $27 billion in back to school shopping; for retailers, capitalizing on this time is an unquestioned must. But, we have good news and bad news. Here’s the bad news for locally owned, brick-and-mortar stores: 81% of consumers surveyed in this study say they plan to shop with mass merchants like Amazon. Here’s the good news: consumer confidence is at a 16 year high, so influencing consumer behavior and maximizing this huge shopping season is completely realistic. Marketing is more than advertising, so we’re going to present a completely comprehensive market strategy for retailers to maximize your profit for back-to-school shopping.
Anchor and Adjust
If you’ve been in business for more than a week, you know how important it is to monitor your competition. Assess your stock – who is offering substitutes? A shirt sold at a boutique store is not competing with a shirt sold at a Walmart. Understand who’s buying your merchandise, then figure out where else they could go to get it or an equivalent. Then, if you’re facing a high level of competition, consider lowering your prices for the season. When discounting, always take advantage of the anchor adjustment heuristic.
JCPenney stockholders are very familiar with the Anchor-Adjustment Theory. When Apple’s Ron Johnson was brought on to the department store as CEO, he decided to stop displaying deep discounts, and instead lowered the price on his company’s merchandise year-round, aka EDLP (everyday low prices). The results were disastrous. JCPenney shares plummeted an astonishing 51% in only two years. The entire company model relied on the anchor-adjustment theory, which tells us that when discounting, display the initial asking price, which acts as a consumer shortcut for assessing value. That way, when consumers see discounts, they can be absolutely sure they are getting a great price on high quality merchandise.
When we say go digital, it doesn’t mean that we’re advising you to transform your business into a completely e-commerce retailer, it means you need to market to your customers online. If you’re just now preparing for the back-to-school shopping season, launching a full-scale digital campaign right now won’t help compete with online giants who have been promoting this event for months. However, there is one powerful digital resource on your side right now: email addresses.
If you’re not already doing it, collect as many email addresses as possible. Here’s why: let’s say you have a database of 1,000 email addresses. Now assume that you can use email marketing to persuade 30% of your database to do their back-to-school shopping with you. Assume that they spend one-third of their back to school budget at your store. According to this study, that’s about $160. That means that thanks to your email database, you’re bringing in an extra $48,000. If we’re half wrong, you just made an extra $24,000.
First year business students can recite the 4 P’s of marketing (product, price, place and promotion) like it’s written on the back of their hand. For this shopping season, we’re rewriting the rule book and telling you that in August, the 4 P’s mean promotion, promotion, promotion, and promotion. We’re not necessarily telling you to spend massive amounts on media buys, but budget wisely and use cost-effective promotions like social media advertising, email blasts and in-store signage. If you haven’t caught on by now, we’re telling you to make sure that everyone in your market knows that you want to earn their business this August.
It’s a very exciting time for retailers, and we hope that you can use these strategies to maximize your bottom line. At Caledon Virtual, we act as an extension of your business, developing digital strategies to make every month feel like that back-to-school rush. But don’t wait to contact us for a free consultation – we’ll assess your brand and strategy, and come up with a customized plan that fits your needs to a T. For more marketing tips, visit our blog, and maximize your revenue this shopping season!