Class Dismissed

Anyone who’s followed those shady “leading economic indicators” on the nightly news has probably puzzled over an apparent disconnect in today’s retail world. While economists have been telling us for 14 months now that the recession has officially ended, somehow the everyday evidence all around us seems to say the opposite. Now comes another bit of news to suggest that the U.S. isn’t quite out of the woods: Back-to-School shopping time is upon us—and it looks to be a season of skimping. A study just released by the National Retail Federation brims with statistics suggesting that both parents and students are taking an austere approach to what’s traditionally a yearly shopping binge. Among the study’s findings: Not only will the average amount of money spent on apparel, school supplies, and electronics be less than last year (albeit modestly: $603.63 compared to $606.40 for 2010), but also shoppers say they’ll be buying more store-label brands, visiting discounters, and—brace yourself, tech brands—making do with last year’s smartphone instead of plunking down big bucks for the latest upgrade. “When you read the papers and look at the unemployment rate, you can see that we’re still healing from how bad thing things were,” said Mike Gatti, executive director of the Retail, Advertising & Marketing Association, a division of the NRF. “There’s a new conservatism when it comes to shopping—but we all kind of knew this.” Well, you sure know it if you’re the parent paying to provision Junior for a return to the classroom come September. Among the survey’s more telling findings: Nearly 40 percent of Americans say they’ll be buying generic names, half report they’ll hunt for sales, 68 percent confess they’ll buy at least one item from a discounter, and nearly 44 percent admit they’ll be spending less money in general. They’ll be going out of their way to save that money too. Over 42 percent of shoppers report they’ll start roving the store aisles three weeks to a full month before the school bell rings. Why? Some just want the time to comparison shop. But others, said Sherry Orel, CEO of marketing consultancy Brand Connections, are responding to early-bird sales. “Shoppers are shopping earlier because brands and retailers are giving them incentives to spend,” she said. “They’re capturing consumers’ attention early with plentiful deals.” Not that those always work, especially when it comes to digital deals. Apple, for example, started an “education pricing” promo on June 16 that handed a $100 Apple gift card to anyone who bought a new Mac. The problem? According to the NRF study, only about 46 percent of students and their parents plan to buy a new smartphone, MP3 player, or computer this year at all—that's the lowest number since 2005. “Everybody already has one of these things anyway, so the question becomes: How old is it?” Gatti explained. “Electronic-item obsolescence used to be a two-year thing, but now parents are telling their kids, 'You can make it another year on that.’” Parents seem to be saying that about a lot of things, in fact, because clothing purchases—which enjoyed an encouraging bump last year—are again down for 2011. So this year, kids, you’ll have to make do with last year’s jeans. The ripped ones. Then again, didn’t they have rips in them when you bought them new?

Brand Marketing

Class Dismissed

National Retail Federation says Back-to-School season likely to disappoint retailers, brands

Robert Klara

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Robert Klara