Starting in March, schools started sending students home—and many aren’t going back this fall.
This is creating a strange back-to-school season, putting stress on retailers. How have the changes impacted retailer advertising?
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Back to School Season is Abnormal in 2020
Sending children back to school was one of the most difficult decisions for government officials and parents—and there isn’t a uniform policy across counties or states.
This is impacting retailers, as each location is different. The Children’s Place reported that in 47% of the cities in which they have stores, schools are going virtual. In an additional 35% of their markets, schooling will be hybrid. Because of this, they do not expect the normal back to school sales bump, and predict Q3 revenue will decline 25-30% YoY.
Likewise, traditional back-to-school supplies are down 31% nationwide, according to Shopper-Intelligence company Catalina. This will impact grocery stores and pharmacies in areas where the pandemic had the greatest influence: California, Florida, Texas, New York, and Georgia.
Reallocating back-to-school dollars to tech
Instead of clothes, many parents will direct their back-to-school spending towards necessary tech items for remote learning, like computers and tablets.
According to the National Retail Federation, 63% of K-12 families are expecting to buy computers or other electronics this year, up from 54% last year. They plan to spend an average of $274.44. Overall, the report says that COVID may push back-to-school spending to record-level highs. It’s just that the spending will be on tech, rather than apparel and supplies.
“Mac and iPad, these are productivity tools that people are using to stay engaged with their work or stay engaged with their schoolwork,” said Apple’s Chief Executive Tim Cook on a recent earnings call. “And we believe we’re going to have a strong back-to-school season sitting here today, it certainly looks like that.”
Remarketing the college experience amid COVID
Even for university students, “going” to college (or logging in) will be odd. Bed Bath & Beyond launched a college-at-home program to help kids revamp their childhood bedrooms, featuring product lines like “dreamy dorm spaces” and “low-key bohemian.”
The idea is to encourage students to make their rooms “more effective and more exciting to them even if they can’t be on campus,” said Joe Hartsig, chief merchandising officer at Bed Bath & Beyond to The New York Times. “It’s a real window of change for students to reflect that they’ve moved on from high school and are in college, and want their room to reflect a different room.”
MediaRadar Insights: Advertising trends amid this strange back-to-school season
To understand how these trends were impacting advertising, we analyzed retail ad spend from the beginning of July through the first half of August (August 23rd). We looked at data from TV, digital, and print ad spend.
Overall, retail ad spend during this time period was down 31% YoY—paralleling nationwide sales figures for supplies. Though this figure is down, it is important to note that this spending level is much improved from where it was in the earlier days of the pandemic. For example, in mid-April spend levels were down by more than 60% YoY.
Because retailers normally advertise back-to-school sales in mediums like local newspapers, print advertising is feeling these cuts the most. Digital ad spend from these retailers is actually up 4% YoY. This is not surprising, considering that programmatic has done well amid the pandemic. People are spending more time online and shopping online—it’s unsurprising that ad placements have shifted to digital.
More than half of all retail ad spend during the back-to-school season came from the top ten advertisers. These advertisers are faring only slightly better than others: YoY their ad spend is down 29% YoY. Between July and August 23rd, they spent almost $275M on advertising.
Of the top ten advertisers, four increased their ad spending YoY. These four include:
Collectively, their spend is up 46% YoY.
On the other hand, the remaining top ten spenders (Target, Macy’s, Kohl’s, Staples, J.C. Penney, & Best Buy) collectively cut ad spending by 56% YoY.
In response to the ongoing pandemic, advertisers adjusted their creative. For example, Walmart is running a campaign that acknowledges that some kids are going back to school and some are staying home. Meanwhile, Target’s commercial is focused on schooling from home, with tech playing a heavier role.
There are many oddities to this back-to-school season—and this is just the start to a weird end of the year as we enter Q4. As the holiday season approaches, we’ll be tracking advertising trends as advertisers finish out 2020.
For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.