Direct Line Blog

Back-to-School for the Small and Midsize Retailer

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More pencils, more books—and more teacher's dirty looks
More pencils, more books—and more teacher's dirty looks

In a few short months, it will be time to pack those lunchboxes and banish the children back to the classrooms where they'll eventually learn to be functioning adults.

But before Mom and Dad can uncork that giant bottle of fermented grape juice, they'll need to prepare their children for the academic deathmatch. The conquest for a higher, extremely expensive education can only be attained through careful preparation. And what do children need to be successful? Swag. Material goods. High-end electronics. Can Junior be a National Merit Scholar without a new iPad? He cannot. Teenagers everywhere agree. And don't forget new clothes: Look good, feel good, test good as the saying goes (Not really).

We all know that the credit cards come out well before the school year starts—a consumer survey from marketing firm SG360 and Leo J. Shaprio & Associates found that 86% of households with kids aged 5-13 are going to start buying pretty early. Much of the planning-and-purchasing frenzy happens in late July and early August, according to the study. And back-to-school shopping is big business: the National Retail Federation's (NRF) 2013 survey expects total back-to-school spending to reach $26.7 billion.

But economic hardship means that 80.5% of back-to-school shoppers will change the way they spend; 36.6% of respondents said they'll price-compare online and 18.5% will do more online shopping.

Here's the problem: The big box retailers and online giants like Amazon dump so many resources to claim their share of the multibillion dollar pie, how can a smaller company compete?

Forget price; try bundling items

Face it: beating Amazon on price is pretty much impossible. “There are all sorts of pricing algorithms the retailers run every day,” says Billy Nava, VP of retail solutions at multicultural marketing firm TransPerfect. “They'll go to the manufacturer, or lower their price and squeeze their margin.” For retailers without Amazonian resources, this sucks because, according to the SG360 survey, sales and offers are the top purchase influencers for back-to-school buying.

Nava suggests coming up with offers that present other value-propositions, like bundled services. This can include a free item or a free subscription to a service. “If you bought a coffee item or a juicer, you'll get a coupon that goes to Whole Foods,” Nava suggests.

Engage locally

That the big box guys are everywhere dilutes their local presence. This is something smaller retailers can use to their advantage. David Perez, CMO and cofounder of Convertro, a provider of cross-channel marketing optimization solutions, says one of the simplest things to do is target email addresses and phone numbers through Facebook. “That's a tool small retailers can go out and leverage,” he says, adding that that sort of targeting can be done within an hour. “And if they put forth an offer based on previous purchases, they can get those customers to come back and make another purchase,” Perez says. Nava points out that some retailers give discounts at the Wi-Fi level—meaning that if customers are online within a store's network, that store can push out offers. “The objective,” Nava says, “is to keep them in the store longer.”

Your relationship is an asset

Yes, the big box retailers have the resources to invest in complicated CRM constructs but that doesn't mean smaller retailers should just give up. Not every CRM solution needs to be a premium one with all the bells and whistles and some data is definitely better than none. “You already have a database of users that are buying and that data can be leveraged, providing different offers based on the likelihood of those users to convert,” Perez says. “The biggest mistake retailers make is not leveraging the relationship they have with buyers.”

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