July 9, 2014
Back-to-school shopping is the second largest retail event of the year, second only to holiday shopping. However, businesses are failing to use loyalty programs in order to take full advantage of the $72.5 billion back-to-school shopping opportunity, according to findings from a new study conducted by payment technologies firm Merchant Warehouse.
The company surveyed more than more than 100 small business owners and managers that sell back-to-school items and more than 700 back-to-school shoppers in June 2014. While 85 percent of shoppers noted that they tend to shop at the same retailers year after year for back-to-school, an overwhelming 91 percent noted they are "somewhat likely" (65 percent) or "very likely" (26 percent) to switch their choice of retailer if a promotion or reward applies. Meanwhile, only 34 percent of retailers plan to run loyalty programs for back-to-school shopping this year.
Most shoppers surveyed reported they buy items at the same retailers during both the back-to-school and holiday shopping seasons, with 58 percent shopping at a majority (60-100 percent) of the same stores for both. Shoppers indicated that price is more important to them during the back-to-school season when compared with other times of year; 53 percent of consumers list it as their biggest determining factor in where to shop and 66 percent said they are likely to sign up for a retailer's loyalty program during back-to-school shopping if offered a discount at the checkout. In fact, consumers look for these incentives, as 45 percent stated they're more driven to shop at a retailer based on their sales, discounts, or promotions during the back-to-school shopping season versus other times of the year.
A majority, 58 percent, of retailers surveyed believe loyalty campaigns would benefit their business during the back-to-school season, although only 34 percent plan to run a program this year. In fact, 97 percent of retailers that ran back-to-school loyalty campaigns last year had positive experiences and plan to run one again this year. So why are others missing out on this opportunity? The most common reason reported was that loyalty programs have not been beneficial to the business in the past, with 25 percent selecting this response. However, of those conducting loyalty campaigns this back-to-school shopping season, 65 percent are taking advantage of data-tracking and analysis (such as purchase data or demographic information) technology within loyalty programs to boost the benefit to customers specifically interested in purchasing back-to-school items.
Other findings of the survey:
