School is in session and back-to-school shopping has come to an end. The results are coming in, and the 2023 back-to-school shopping season has shown strong initial performance. “Retail sales rose 0.7% in July, well above expectations, showing a strong start to the important back-to-school shopping season” (Verdon). This growth is an indication of consumer behavior that is likely to carry over into Q4 and the 2023 holiday season.
In this industry, it is all about test-and-learn mindset and using new information to inform decision making. Let’s take a look right away at back-to-school learnings so we can utilize them in our Q4 strategy to continue to grow sales and maximize purchase intent.
Key Insights:
- Brick & Mortar is having a resurgence. Back-to-school has taught us that consumer behavior has shifted to in-store shopping. Retailers can use this information to leverage campaigns to drive foot traffic this Q4, but must ensure that they are well-stocked to serve customers’ needs.
- Consumers are choosing essentials and personalization over big-ticket items. The back-to-school season showed retailers that consumer preferences are straying away from high-cost purchases and are leaning toward essential offerings and more meaningful purchases.
- Strong initial back-to-school performance bodes well for this upcoming Q4. The rising retail sales this summer is a positive trend retailers are hopeful will continue into the holiday season. Consumers sought out promotions this back-to-school season and will likely seek discounts as they conduct their holiday shopping.
Coming out of the back-to-school push, retailers gained an understanding that consumers are spending, but how they are shopping and what they are purchasing has evolved. Consumers are buying essentials and making purchases for loved ones – both of which fit the back-to-school shopping brief. Retailers can apply this learning for Q4 planning to execute campaigns that lean into making holiday purchases for friends and family. In terms of shopping patterns and consumer expectation, it is important to account for the following shifts in behavior:
- Many consumers have returned to brick & mortar stores to make their back-to-school purchases. A survey conducted by Sensormatic Solutions found that “79% of respondents plan to conduct their back-to-school shopping in-store₂.” This is an important shift for retailers to keep in mind as they can deploy store traffic campaigns or promote in-store deals this holiday season. With a high volume of customers shopping in-store, it is important to keep best-selling items in stock and provide an enjoyable experience.
- Amazon Prime Day has impacted the shopping patterns of many consumers this back-to-school season. People have come to expect major sales across big-box retailers that align with major seasonal moments. This back-to-school push, many retailers offered aggressive and competitive promotions, in-line with Deloitte’s estimation that the “shopping journey will be centered around finding ways to economize, researching the best deals, shopping earlier, and figuring out how to purchase items in the most affordable manner₁.” The economy is stronger than it appears, but it hasn’t quite trickled down to consumers yet. Looking at back-to-school shoppers’ behavior, holiday shopping will likely be in a transition spot where people are making purchases, but seeking promotions throughout Q4. If a retailer cannot offer discounts, they can develop a holiday campaign focusing on the value of their goods. Other alternatives to discount pricing to incentivize shoppers are layaway plans, free shipping, product bundles, and free returns/money-back guarantee.
- Back-to-school shopping showed retailers that consumers are seeking the essentials and straying away from big-ticket items. Items that someone might buy for themselves, such as a computer or kitchen appliance, can become potential gifts from a friend or family member. As consumers continue to stray away from purchasing lavish material goods, it can be surmised that experiences and offerings that promote quality time will be desirable this holiday season. As retailers learned that consumers are economizing and personalizing their purchases, they can adjust their Q4 strategy accordingly to capture this trend.
It’s time to sharpen your pencils and get to work! Take advantage of these back-to-school learnings to inform decisions that maximize Q4 gains. Keep consumer behavior trends in mind and be sure to adapt to their ever-evolving shopping needs.
1. https://www.forbes.com/sites/markfaithfull/2023/07/14/back-to-school-spending-to-hit-record-high-as-parents-hunt-deals/?sh=77806e4c4aa6
2. https://www.forbes.com/sites/shelleykohan/2023/07/11/amazon-prime-day-is-a-key-driver-for-back-to-school-shopping/?sh=54c0826f78c2
