Instrumented Interconnecteds Intelligent

By Jay Henderson, Global Strategy Program Director, Enterprise Marketing Management at IBM

There is a reason why back to school sales start earlier every year. It’s a retail goldmine, second only to the grand daddy of them all, the winter holidays. Last year alone, families spent $7.7 billion at clothing stores in August, according to the U.S. Census Bureau. And with record numbers of students heading off to college this year, the expectation was that we would see huge sales heading into the Labor Day weekend.

At least that’s what many thought would happen. While it’s very possible September could deliver a spike in back to school sales, at this juncture it appears while parents were off packing up the mini-van the majority of students opted not to cash in on big back to school deals.

As a parent do you remember the days when you offered to buy your child something and they politely declined? No? That’s because it doesn’t happen.  That’s what made this back to school season so interesting. A recent New York Times article touched on this topic, stating that according to August research from the National Retail Federation only 8 percent of consumers with school-aged children had completed their back-to-school shopping, the lowest figure in four years. One reason for this may be that students are waiting to see what hot new items their peers have chosen before taking the plunge themselves.

What this leaves us with is a classic “Chicken and Egg” scenario with students waiting to see who buys what pair of jeans and whether messenger bags are still cool before diving in themselves. And that was the case for most returning students…but not all.

It wasn’t too long ago that we were busy talking about the death of social commerce. Based on the results of our Q2 Retail Online Index we had good reason to form that conclusion. Well a funny thing happened on the way to the funeral, a group of students decided they were going to bring it back to life. In August, shoppers referred to online apparel stores through social networks generated 2.2 percent of all sales, up more than 112 percent over 2011. This 2.2 percent represents the social media mavericks who rather than waiting for someone to set the tone in the hallways at school, turned to their networks to see “what’s hot and what’s not,” and in doing so tapped into some great deals. Given that social media channels skew younger, it isn’t a surprise that a shopping period which caters to students would see a spike in activity.

While these social hipsters were clearly not the majority, it’s only a matter of time before this tide rises and everyone becomes less socially awkward. For this July and August the big winners were the marketing teams who had a plan and deployed social marketing campaigns.  Think just how powerful social media can be – these forward thinking marketers lured students away from the powerful influence of their friends, something us parents fail to do on a daily basis, then connected them with the styles of 2012 and turned them into fashion icons destined to rule the runway and the hallways this fall at a school near you.

Longer term, the winners will be those that integrate social into their overall marketing systems, as social is not just a power marketing execution channel, but also a great channel for learning more about a customer’s likes, dislikes, interests, and brand preferences.  There is a substantial opportunity for brands to differentiate themselves.  According to our recent State of Marketing survey, only 22 percent of marketers run social tactics as part of integrated campaigns with the remainder conducting them in silos, discretely and on an ad hoc basis. These retailers who represent the 78 percent get a failing grade and need to hit the books before Thanksgiving, when shoppers exchange turkey and tryptophan for a wave of shopping that won’t end until 2013.

One year ago we saw a glimpse of how mobile could transform the 2011 holiday season, something that we continue to see this year. But marketers cannot allow the success of mobile to distract them from the social opportunity. Over the next 10 weeks chief marketing officers (CMO) and their teams need to huddle together with the chief information officer and IT to determine how they can transform their marketing systems into one capable of becoming a social commerce influencer for their business. If you think failing social commerce at school is bad, getting an F from Santa Claus could mean something a lot worse than winding up on the naughty list.

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