While parents prepare to send children back to the classroom,
advertisers race to win their share of a considerable pool of
Back-to-School shopping dollars. According to the National Retail
Federation, the 2014 Back-to-School season generated nearly $75
billion of retail spending, making it the year's second -largest
spending event after the winter holidays. Approximately two-thirds
of these purchases were connected to college students and one-third
to the younger K-12 population. With so much at stake,
Back-to-School is clearly a key battleground for marketers.
Back to school - in July. With schools and
colleges starting the academic year in August or early September,
the core shopping season typically gets underway in July and
stretches past Labor Day. Marketers align their ad budgets to this
calendar and make tactical decisions about the right investment
levels, the right weeks to support, and the right messages to
capture the sale. In both 2013 and 2014, Back-to-School ad activity
started after the July 4 holiday. Accordingly, for this analysis,
we focus on advertising featuring Back-to-School themes that
appeared from July 7 to October 5, 2014.
However, some marketers have been shifting budgets within this
period to create an earlier presence for themselves and target
early-bird shoppers. This was noticeable in 2014 when spending
during the week of July 15-21 jumped by more than 50% compared to
the prior year. Total media spending on themed ads for
Back-to-School reached $241 million in 2014, down 9% from the prior
year. The Top 10 advertisers accounted for almost $150 million of
this amount, a 62% share. (Note that these figures apply to ads
with Back-to-School themes only, and total ad spend for the period
would thus be higher.)
Head of the class: Target. Target won the
overall season with spending of $34.9 million, nearly as much as
the next two largest advertisers combined. Its leadership position
in Back-to-School is striking because Target typically lags behind
Walmart in overall ad spend, indicating a particularly strong
strategic focus on this event. Target's advantage was due to its
"tentpole" strategy of launching at a higher spend rate to get a
jump start on rivals and then sustaining its budgets deeper into
September. During the fiercely competitive stretch from July 14 to
September 8, Target was the top spender in five out of eight weeks.
Over the same period, Target won the week six times against its
narrower competitive set of department stores and mass
merchandisers.
Target and Walmart took very different approaches to the
merchandise lines featured in their seasonal advertising and there
was surprisingly little head-to-head competition. Target focused on
apparel, school supplies and a cause marketing program to help
underprivileged students. Meanwhile, Walmart emphasized computer
products and accessories, food items for the lunchbox, and a
general promotion message touting savings during its
"Back-to-School Sales Event".
The new kids: financial services, food and beverages,
telecom. Back-to-School is foremost a retail sales event,
and the retail category accounted for $191.8 million of the total
$241 million spent on themed advertising during the 2014 season.
Department stores, apparel merchandisers and consumer electronics
stores were the most active retail segments, consistent with the
types of products shoppers spend their money on.
Besides retail, several other categories demonstrated
significant spending, typically concentrated among a short list of
marketers. Financial Services exemplified this phenomenon with
$10.7 million of media expenditures, virtually all of it from
American Express. The credit card issuer touted its plastic as a
payment method for Back-to School purchases and the rewards card
members could earn. A wide range of Food & Beverage advertisers
spent a total of $8.9 million to promote items for student lunch
bags and after-school snacks. The Telecom category was responsible
for $7.5 million of media spend, principally from wireless service
providers offering plans and equipment with "back-to-school
savings".
Sales and savings in the lesson plan. Sales and
savings were the name of the game for mass merchandisers and
department stores as they competed to have their deals and steals
stand out. Target advertised 20% off for school supplies, while JC
Penney promoted savings on backpacks, apparel and footwear. Walmart
took a different approach, comparing its rollback prices for school
essentials to prices of the same items from Dollar General and
calculating the savings.
When it came to targeting college students, advertisers did not
fall short. Walmart showcased bright-colored designs for students
to spruce up their dorm rooms, as well as affordable essentials for
college cooking. Kohl's wanted to be students' college destination,
promoting a variety of electronics, appliances, apparel and more.
Best Buy portrayed students with all of the electronic essentials
needed for schoolwork, entertainment and keeping in touch with
family and friends throughout the semester. One advertiser with an
unusual approach was the Southern California Honda Dealers
Association. Using a hidden camera to capture the moment, its
representative approached students at random in a campus bookstore
and surprised them by paying for their textbooks.
Source: Kantar Media