School is back in session. Kids have already been handed their class schedules and assigned to a seat. Students are fully prepared with their new backpacks, pencils, pens, rulers, notebooks, and calculators. But, how did they make their back-to-school purchases and whose advertising grabbed their attention and dollars?  

The State of Retail

A lot has been written about the state of retail in the United States in recent years; brick and mortar sales are lagging and, as a result, many stores have closed. This decline in sales can be attributed to the fact that consumers are deciding to make their purchases online and that industry disruptors, such as Amazon, are changing the landscape.

Back-to-School and Black Friday Shopping Seasons

Despite these transformations, the back-to-school season is still the longest and second biggest shopping season of the year. Black Friday is ranked number one. It’s a huge opportunity to capitalize on for those in the retail industry.

Amazon vs. Brick-and-Mortar Stores

But, lately, more and more fierce and innovative competitors like Amazon have entered this market. The American electronic commerce and cloud computing company created Amazon Prime Day on July 19^th, forcing other retailers to kick-start their back-to-school campaigns even earlier in the summer. To get a better sense of early back-to-school advertising in the retail landscape, MediaRadar dove into the seven different categories of July advertising activity.

7 Categories of July Back-to-School Advertising Activity

1. In the retail category as a whole, we see over 4,000 companies advertising in July 2018, collectively spending an estimated $600mm across national TV, print, and online channels. Compared to last July, advertising spend is now down 6% year over year, as the category removes their dollars out of print and TV channels.

2. Diving even deeper, we find that over a third of July retail spend is consolidated around seven of the top retail advertisers, accounting for over $210mm in spend. Ad spend has also increased slightly year over year by just 1% for these seven specific companies, including Target, Walmart, Macy’s, Kohl’s, Amazon, IKEA, and Best Buy. These retailers are on a chart below, ranked by total estimated spend across all three channels – national TV, print, and online.

3. Looking at total spend across all three channels, we see that three of these companies have increased their ad spend year over year, while another three have actually decreased their spend. Only one has remained flat.

1. The three companies who are up are: IKEA (+46%), Amazon (+42%), and Target (+8%)
2. The three companies who are down are: Walmart (-16%), Best Buy (-11%) and Kohl’s (-3%)
3. Macy’s has remained flat year over year

4. The two companies who have most significantly increased their spend year over year are IKEA and Amazon and they did so with large investments in TV campaigns. Each increased their year over year TV spend by over 65%, while running back-to-school ads.

5. The company who changed their media buying strategy the most year over year was Best Buy. In July 2017, the company ran ads across all three channels. However, in July 2018, we saw nearly all of Best Buy’s spend move to digital and online channels.

6. Among these seven retailers as well as the retail category as a whole, the channel which saw the most growth was online advertising. Interesting to note is the fact that Best Buy, Kohl’s, and IKEA more than doubled their online ad spend year over year.

7. Two companies also ran back to school ads on Snapchat; Walmart, who owns Jet.Com, ran ads directly geared to college students while Amazon was promoting Amazon Teen, as well as running a Prime Day lens on days close to July 19th. Target and IKEA also ran Snapchat ads during the month of July, although they were not exactly related to the back-to-school season.

Conclusion

The landscape of retail is changing. More specifically, the back-to-school season is starting earlier and earlier. While Amazon may be slowly taking over, big brands, such as Target, Walmart, Macy’s, Kohl’s, Amazon, IKEA, and Best Buy, are still in the game. Online advertising is growing rapidly, but TV advertising and digital are still considered wise investments. Snapchat is also an up-and-coming option for back-to-school advertisers.