Retailers struggle to stand out
Levi Strauss CEO Chip Bergh remembers when back-to-school shopping was a one- or two-week thing. Now, it seems to go on forever.
“Back to school used to be a moment,” Bergh said, recalling the briefer periods of yore “where it was like a fistfight in the stores.” Today, “it’s morphed into five weeks.”
The prolonged back-toschool season mirrors what’s happened with other annual sales events, as retailers drag out the moments that bring shoppers in the door as long as possible. Black Friday, still the kickoff for the crucial year-end period, is now followed by the online deals of Cyber Monday — but the lion’s share of holiday sales come in discount-fueled December.
Even Prime Day, the midsummer event invented by Amazon, has been stretched to encompass two days, with competitors extending their promotions on the front and back ends.
For apparel chains, this often means that sales bleed into each other, and companies struggle to get shoppers excited for the next round of discounting before the current one has ended.
“Everything is so overpromoted these days,” said Craig Johnson, president of Customer Growth Partners. “People can be promoted out. They get bored with it.”
The endless sales have changed shoppers’ attitudes, with many now expecting discounts available at any given moment, rather than at designated times of the year.
“Consumers are numb to all the promotional activity,” Bergh said. “So a 20% backto-school offer is no different than whatever is going to happen in early September, when it’s going to be 20% off anyway.”
This is forcing retailers to manage their inventories more nimbly and keep the pipeline of new products flowing so the selection feels fresh for shoppers who visit several times during any given season.
The stakes are high to get it right: This year, American parents are expected to spend $507 on average for clothing, electronics and other schoolrelated items, according to a study from Retailmenot. That’s up from $465 in 2018. Deloitte, meanwhile, sees back-to-school spending for kindergarten through 12th grade totaling $27.8 billion this year, a rise of 1.8% from 2018.
Failing to move product quick enough can be detrimental for retailers — piled up inventory erodes profitability because it costs money to store and organize it, and companies have to discount deeply to get rid of it. Gap and J.C. Penney have gone through costly buildups of inventory in recent years that required markdowns to clear up.
“You want to get rid of it, and then you want some new product coming in,” Johnson said. “You don’t want to keep selling the same stuff that you’ve been selling for two months.”
To stand out amid the crowd, chains are trying new tactics — such as turning to the kids themselves for inspiration.
Old Navy, the off-price apparel chain owned by Gap, is selling T-shirts featuring drawings by 8- to 12-yearolds. American Eagle recently formed a “council” of young adults that was created, in part, to help guide its product selection this year. On their recommendation, the chain now stocks a larger range of sizes in its stores. J.C. Penney, meanwhile, is offering $10 haircuts for elementary and middle school students.
Johnson said the key to success is for retailers to have a detailed understanding of their customers.
“If you’re an apparel retailer, you want to make sure you’re in tune with the styles,” Johnson said. “If you place too big a bet and nobody’s buying it, then you can get hurt.”