NEW YORK — Back-to-school season is always a bellwether for fall and holiday sales.
This year’s season already portends shifts in how and where shoppers are going for the myriad needs of the 55 million students heading back to classrooms. B-t-s is now the second-largest retail season after Christmas. According to the National Retail Federation, spending will approach $17.6 billion in 2006, up a pretty impressive 31 percent. But many retailers still worry about topping last year’s dollars.
Families are expected to spend about $527 each during the season, but beauty represents only a small fraction of that total. However, where customers go for beauty could determine where they pick up notebooks, backpacks and apparel.
The escalating cost of gas is affecting where shoppers go. According to industry observers, big-box retailers, which typically are on the outskirts of towns, are losing out to supermarkets and drug chains in heavily trafficked neighborhoods. The theory is that if shoppers can get what they need at a food store, they don’t need to use more gasoline. Many analysts believe rising gas prices have hit Wal-Mart consumers especially, and Target warned about slower-than-expected sales last month.
The tussle for consumers is resulting in early and sharper promotions at discount stores that are trying to lure shoppers into their doors. Wal-Mart started b-t-s discounts earlier than last year. Target has already downgraded. The intense promotional activity could attract shoppers, but put a dent in profits.
On the other end of the spectrum, drug chains and supermarkets increased their selections of school supplies. According to Wendy Liebmann, president and founder of WSL Strategic Retail, stores are fighting to get shoppers in the door as consumers cut back because they are worrying about gas prices and a weakening house market. This season could be a good time for drug chains to recover some beauty business.
The merchants that get passing grades for b-t-s, experts said, will be those that put an emphasis on value. That means the higher-priced beauty lines, even those at mass, will feel a squeeze. Rather than attempt to trade shoppers up at this time, retailers will do better offering low prices and values. “Consumers are speaking with their pocketbooks and there is resistance to high prices at mass,” said industry consultant Allan Mottus.
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Mass merchants also face stepped-up activity from Internet options this season. Fifty-five percent of those queried by PersonalShopper.com said they plan to use electronic retailing for back to school.
While stores in the South are already set up for b-t-s, the Northeast is just starting to turn stores over from summer to fall merchandise. The goal with b-t-s beauty is to convince consumers it is time for a change — a new shade or a new look. Retailers are adopting different strategies for marketing b-t-s.
A Rite Aid in Somerville, N.J., for example, has an endcap of must-have beauty items for school adjacent to notebooks and other school supplies. Among the items on display is a b-t-s standard — Smackers from Bonne Bell. To put shoppers in the fall mood — on a record-breaking, 100-degree day — the store featured straw scarecrows.
Mass and midtier retailers are taking a cue from concept shops in department stores. Kohl’s is off to an early start, linking its Candie’s apparel with the launch of Candie’s Heartbreaker fragrance. In a b-t-s circular, Candie’s fragrance is promoted at 10 percent off the suggested retail, at $12.99 to $30.99.
Kmart also featured a tie-in with That’s So Raven clothing and underwear with the Raven fragrance, priced at $12.99. The discounter devoted a full page of a circular to grooming items, including 25 percent off Cover Girl Advance Radiance, TruBlend and Outlast. The ad also touted Nice ‘n Easy hair color, Pantene hair care at three for $9 and Clearasil for $6.
Target encourages consumers to pick up personal care in its doors with ads for Pond’s and Dove skin care at $4.50 and L’Oréal Vive shampoo at $3.79.