By Michael Haydock
It’s early August, but back-to-school shopping is already in full swing. In fact, in some cases, it has been for a while. Retailers like Walmart began advertising before summer vacation even began in hopes of capturing consumer dollars in the face of economic uncertainty.
According to IBM’s new Big Data-based forecast, such moves led to strong growth in July. For example, children’s, juniors and other clothing segments were projected to be up over 12 percent, year over year, in July. Spending on this category is expected to dip down to just 1.4 percent in August before returning to a 12.3 percent growth rate in September. (That’s because students typically like to wait and see what their friends are wearing before completing their back-to-school wardrobes.)
Footwear followed a similar pattern, increasing its growth rate to over 2.5 percent, year over year, in July. It is expected to drop to -1.12 percent growth in August and start growing slightly in September at .48 percent. While maintaining solid growth throughout the quarter, beauty too is expected to slow in August, going from nearly 7 percent growth in July to 5.4 percent in August before returning to over 7 percent growth in September.
Retailers understand that data-gathering and analysis can be powerful tools to use to anticipate what their customers want. Nearly half of all retailers’ Big Data initiatives are driven by a desire to better understand their customers’ behavior, according to a new IBM study.
IBM’s Big Data-based forecast applies analytics to some 22 years of historical retail data, consumer confidence, disposable income, unemployment data, stock market information, and a long list of other categories. Armed with this hyper-accurate, forward-looking information, retailers can better plan for occasional events like the back-to-school shopping season.
Although back-to-school is the second biggest shopping season of the year, it isn’t anchored by specific kick-off days like Black Friday or Cyber Monday. Looking to change that, millennial-focused fashion magazine Teen Vogue last year created an event called Back To School Saturday. The publication is planning to reprise it again this year on Saturday, August 10, with about 50 top vendors like Macy’s, Revlon and American Eagle, all participating.
Though IBM’s forecast predicts slowed growth for clothing, footwear and beauty in August, the Back to School Saturday is still a great idea. It delivers the kind of social and mobile experience that retailers need to entice savvy millennial shoppers who aren’t as easily reached through traditional mediums.
Other retailers are trying innovative options of their own to reach this customer segment. For example, companies from Target to Bed, Bath & Beyond, are planning to launch temporary pop-up shops on college campuses to sell students dorm room essentials. Last year, retailers began offering a service that allows college students to buy home goods at their local store back home, and then have the goods shipped to a location near the student’s college. These new models will help retailers boost home goods and appliance sales in the third quarter — with the latter predicted to grow nearly 6.6 percent – while building loyalty among the coveted millennial demographic.
Stay tuned later this month when IBM releases the findings from it’s cloud-based IBM Digital Analytics Benchmark that explores new data on how shoppers used mobile, social and online channels in their back-to-school shopping endeavors. Hint: last quarter, mobile shopping jumped 28 percent, year over year. With millennials in the driver’s seat of the back-to-school shopping season, I think we’re sure to see that growth continue in the third quarter.