Back to School and ‘Back to Normal’

Back to school is not only important because of the sales it directly generates, but because of the distinct shopper mindset among parents during the period. This mindset is defined by the anticipation of getting ‘back to normal’ after an often disruptive and sometimes challenging (particularly among working parents) summer. The back to school sales window is a time when parents are more likely to try new products and deviate from routine, so it presents opportunities for both retailers and brands.

 

 

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For the Big Four grocers, back to school is a major event that spans food and non-food. While we saw little in the way of innovation this year, each of the major retailers delivered strong cross-category ranges across stores, using bold POS to help shoppers find what they’re looking for. Online, one-stop shops and help and advice built on the success of such initiatives seen over recent years, and responded to the key back to school shopper insights. Asda’s back to school offer met its typical high standard, though the event’s impact is perhaps felt less now that the retailer maintains a School Shop all year round.

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Asda’s School Shop is open all year round.

 

Among discounters, Aldi had a strong back to school offer across food and non-food, continuing the retailer’s on-going efforts to drive sales from events. In-store POS was bold and eye catching so will have no doubt done a good job of attracting parents to inspect the range. Non-food ranges were merchandised in Aldi’s standard display units, which, while functional, were perhaps lacking in inspiration. The combination of a solid offer and Aldi’s ever-growing store estate and customer base will have ensured a good sales performance for the retailer.

Lidl has been far less ambitious than its German counterpart to invest in events more broadly. Back to school was no different. The retailer had no clear offer for the event either in-store or through its various online channels.

On the high street, M&S’ back to school offer and its communication followed a similar approach to 2014. Price messaging was kept to a minimum, with the emphasis very much on innovations and product benefits, such as Expandicuff, Stainaway and Ultimate Non-iron. In an improving economy, M&S has typically maintained a focus throughout this year’s events on product differentiation and targeting trade-up opportunities.

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M&S’ communication focused on innovations and product benefits

 

Inspiration is key for shoppers during the back to school period, and most turn to retailers as a major source of that inspiration. Social media had a major part to play in providing inspiration, with themes very similar to last year. We liked Aldi’s Lunchbox app, which did a good job of sending shoppers push notifications including new ideas.

Outlook for 2016

Throughout 2015 we have seen a steady improvement in consumer confidence and a resultant boost to consumer spending more broadly. Consumers have finally started to see the economic recovery translate into more money in their purses, as disposable income has returned to growth after a long slump.

Despite the improving economic landscape, the grocery market has struggled. An aggressive price war has squeezed sales values and profitability, particularly among the Big Four. Shoppers continue to migrate spend away from the Big Four’s flagship superstores, towards convenience, online and discount channels.

The outlook for 2016 however looks more positive. While there remain international risks to the economy and interest rate rises look likely for 2016, consumer sentiment continues to follow a positive trajectory. We expect that while shoppers will still look for great value across all price points, they will show a greater willingness to trade up next year. We anticipate the pace of the Big Four’s market share attrition will slow as they continue to realign prices and their turnaround strategies bear fruit.

Back to school in 2016 is likely to follow similar themes to this year – due to its functional nature it is one of the most consistent events year on year. However we see further scope to deliver consolidated one-stop shop solutions across categories, better in-store and online inspiration, and a more joined up approach between channels. Consistently in our research, these are the areas that shoppers ask for retailers to concentrate on.

We expect Aldi will continue to invest in events in 2016, building on improvements over recent years. There is scope for the discounter to enlarge its range further and significant room to develop merchandising techniques. Over the next year Aldi faces a challenge to find the right balance of investment to help attract shoppers and compete against the likes of Asda, while keeping costs low enough to maintain a price advantage. Lidl appears to have set out a strategy to avoid significant investment in events, focusing instead on maintaining a keen price position.