Retailers, brace for a harsh lesson this coming BTS season

When school bells ring in September, students from nearly two out of three households (64%) will have spent less on supplies than a year ago due to economic concerns, Deloitte research shows. Many respondents (43%) expect to reduce their BTS spend by more than $100.

When school bells ring in September, students from nearly two out of three households (64%) will have spent less on supplies than a year ago due to economic concerns, Deloitte research shows. Many respondents (43%) expect to reduce their BTS spend by more than $100.

That sounds good only when compared with the survey’s figures of 2008, when 71% were spending less and 48% were cutting back by more than $100.

So, little surprise, value will drive this pivotal retail season in 2009. “Consumers still plan to stretch their dollars….Retailers should focus on delivering the best incentives and in-store experiences,” urges Stacy Janiak, vice chairman and U.S. Retail leader at Deloitte LLP.

The overwhelming majority (90%) will shop BTS at discount/value department stores, 40% will shop dollar stores, 29% office supply stores, and 28% at off-pricers, the data show. They plan to engage seven distinct savings strategies on their trips:
•    Buy more items on sale (74%)
•    Buy only what their families need (65%)
•    Buy more lower-priced BTS items (64%)
•    Use more store coupons (55%)
•    Shop at less expensive stores than usual (45%)
•    Buy more private label (32%)
•    Comparison shop online before buying (28%)

Clothing (81%) and shoes (49%) will be hardest hit, though supplies (32%) and backpacks/book bags (30%) won’t get a free pass, according to the survey.

These deliberate steps to save appear similar to the way people have been shopping for food and beverage staples in recent months. Since BTS products are regarded as educational necessities, the mimicry of shopping patterns doesn’t surprise, in our opinion at SupermarketGuru.com.  

Therefore, Janiak urges retailers to emphasize coupons, sales and loyalty programs in this imminent season.  “With more than three-quarters of shoppers expecting to do the bulk of their shopping in August, retailers can implement promotions now that may encourage customers to spend a greater share of the BTS budget in one place.  Campaigns that are both strategic and creative, such as mobile alerts or coupons, can target a specific customer segment, better engage shoppers and build loyalty.”

Economic erosion is behind shoppers’ stinginess: 22% of survey respondents told of the loss of a job in the household, and another 17% feared losing a job. Nearly one in three (32%) is saving more (up 10 percentage points from a year ago), and 33% are paying down debt.