Monday, July 13, 2009

Rushing the Season

Local schools had been closed for three days when the first back-to-school sales popped up in advertising inserts. Granted, back-to-school is the second-most lucrative selling season (#1 is, of course, Christmas/Hanukkah). Still, in early July, how many parents and students are going to stampede to Staples, Apple, JCPenney, Old Navy, and every other store that's running a back-to-school ad?

And this year's outlook is especially murky, unless some economic miracle comes to pass. A July 3rd story in the Chicago Tribune quoted Cheryl Bridges, director of the Center for Retailing Studies at Texas A&M University, as saying: "If a retailer breaks even for back to school, they're doing great." Not good news for retailers struggling for profitability. Shoppers are holding onto every last penny for as long as they can and holding out for the best sales before they buy.

This brings up another key question: Are retailers doing too much to rush every selling season? My answer: Yes.

Last year, some stores had Christmas cards and ornaments on display during late August. The image above shows Sears pushing Christmas in July. On January 2nd, I saw valentines and similar merchandise at center stage in CVS and other stores. It's common to see winter coats and boots front and center by July 20th. Halloween holiday items are on store shelves by August. And if you need a wool scarf on January 15th, you'll have to wade through racks of shorts to find them.

Is this good marketing? In a world obsessed by "new" and "improved," pencil cases and winter coats that have been in stores for weeks can look very "yesterday" and tired. Repositioning racks and shelves to give everything a fresh look can do wonders, but this tactic won't work for merchandise that's been on display for months (I know from my retailing days).

Costco and Zara and other stores capture shoppers' imaginations because there is always new merchandise shipping in. Costco is expert at marketing its "treasure hunt" items. Granted, Sears and Staples can't have treasure hunts for back-to-school merchandise. But I doubt that rushing the season will bring in any extra cash. It probably shifts some buying from a later period to an earlier period. And a sale might encourage consumers to buy a little from Store A if Store B is selling at regular price. But to just break even for the 2nd-largest selling season? Not the best strategy for an industry in crisis.

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