You may be basking in the last few weeks of summer and counting down to Labor Day getaways, but for retailers it was time to go back to school a month ago.
That's when many of them started promotions for one of the biggest shopping periods of the year one that's also become perhaps the most prolonged shopping period of the year, with families buying back-to-school items from practically the fourth of July until after classes start. Deloitte's annual back-to-school shopping survey out last month found that more than a quarter of parents plan to finish their shopping after the start of the school year.
We're seeing it expanded out throughout the season, says Steve Bratspies, executive vice president of general merchandise for Walmart. He says customers are shopping more frequently and making smaller basket purchases over a longer period of time rather than doing one huge buy.
And that means stores are throwing absurdly cheap prices think 17-cent notebooks and price-matching guarantees at customers in an effort to stay relevant and competitive over three months of back-to-school shopping.
Staples is offering a 110% price-match: If a customer finds a product cheaper somewhere else, Staples will match the price plus give the customer back 10% of the difference. And those 17-cent notebooks are part of a list of items at low prices for the entire shopping season. Rulers, glue, paper, colored pencils, erasers, crayons, ballpoint pens and markers are all on sale for a dollar or less through Labor Day.
Walmart has 30% more back-to-school items available online than last year and is reducing prices on 10% more back-to-school items than last year both online and in stores. This month, a price-matching pilot program rolled out store-wide. It allows customers to enter an ID code listed on their in-store receipt at Walmart.com and compare the prices of everything they bought to all advertised prices from that week. If Walmart's prices were more expensive, it will refund the difference in the form of an e-gift card.
Old Navy, already known for its steep back-to-school promotions, has T-shirts starting at $4 and jeans starting at $8. We obviously started early, says Jamie Gersch, vice president of marketing. And then want to make sure we stay relevant through Labor Day. The retailer started back-to-school deals in mid-July.
Sears is trying to make shopping more enticing by expanding in-store pickup across both Sears and Kmart stores. Customers can order items on Kmart.com but pick them up at a Sears, and vice versa. Sears customers don't even have to get out of the car if they opt for in-vehicle pickup for online orders.
The National Retail Federation expects families to spend $670 on average during the back-to-school season, up 5% over last year, on supplies, clothes and electronics.
Retailers are also sympathizing with teachers, who are increasingly paying for classroom supplies with their own money, by luring them with extra discounts. Walmart has a 10% discount for teachers throughout the season. Staples had a teacher appreciation weekend the first weekend of August teachers who are rewards members got 25% off and the company donated $1 million to Donors Choose, an organization that helps teachers pay for supplies.
Retailers are pushing a longer shopping season and earlier-than-ever deals to try to get customers to buy more over a longer period of time, says Mark LoCastro, spokesman for DealNews, which tracks price and discount trends across the Web.
If they can push into your mind 'don't procrastinate, shop early,' they're hoping you'll do some impulse buys, he says. Plus retailers are also responding to competition. If you're a major retailer and your primary competitors start to advertise in early June you're going to lose out on sales, LoCastro says.
With constant discounts though and 24/7 access to online retailers, shoppers have lost the sense of urgency that can lead to such impulse buys, says Simeon Siegel, retail equity analyst at Nomura.
The days of catalyst-driven shopping have stretched, he says. When you need to attract shoppers with something other than product, you use price and time.
Siegel says that means retailers are offering steeper discounts and for longer periods of time to try to get customers in the door. His research shows Gap has been offering higher discounts and longer promotional periods through July and August than in the comparable weeks last year. And discounts between 30% and 50% have become standard at many retailers.
Still, LoCastro says it pays to wait. DealNews finds the best prices are still at the end of August, when summer clearance and back-to-school promotions converge. LoCastro says that historically, August is one of the best times to buy laptops and apparel.
Meanwhile retailers are stuck serving the whims of millions of shoppers who seem to increasingly hold all the cards when it comes to getting cheap merchandise. Stores have always marked down items to clear inventory, Siegel says. Now they're doing it incessantly out of a need to keep shoppers with hundreds of other options interested, especially during crucial buying seasons like back-to-school.
The reality is I think they need to do it, Siegel says. It's somewhat of a prisoner's dilemma.