After a 16.4% sales decline in U.S. retail in April, retailers are looking for signs of optimism as the late summer season opens up new opportunities and renewed interest in shopping. While most states are in the full swing of reopening, there’s still plenty of hangover from Q2, and retailers are under increased pressure to gain back lost revenue as quickly as possible.
But it’s not all gloom and doom for the retail industry. Shoppers are poised to make a comeback, with a higher projected spend in Q3 across events like Back-to-School and Amazon Prime Day, which is now expected in September. So how can retailers capitalize on this pent-up shopping demand in July?
RetailMeNot has kept a close eye on shifting trends and sentiment from both retailers and consumers over the last month. According to recent research conducted by RetailMeNot and Kelton Global in May 2020, there are a few considerations to keep in mind if brands want to start the second half of the year strong.
Consumers Are Ready to Spend, but Need Savings More Than Ever
Timing and logistics around students returning back-to-school this fall may still be in question, but one thing is certain: Consumers are ready and eager to shop in July and August. Among those surveyed, the average planned back-to-school spend is $532 in 2020, up from $507 last year. Additionally, Americans polled said they planned to spend $504 during what would have been Prime Day in July this year.
With all the uncertainty experienced over the past few months, consumers are craving a sense of normalcy and a return to their usual spending behaviors, however they need to feel confident that they're making the best use of their limited resources. In fact, 73% of shoppers are looking at close to three sources for deals every time they shop. More than ever, strong promotions are needed to incentivize shopping in categories that consumers may have paused on during Q2.
Prime Day Pushed, Retailers Look to Fill the Void
In a survey of more than 200 senior retail marketers, 70% said their organization will struggle to meet yearly financial goals if Prime Day is pushed outside the back-to-school season and July timeframe.
With the potential absence of Prime Day weighing on brands that typically capitalize on the July shopping period, many retailers still have significant year-over-year comps to hit in Q3—not to mention losses to make up for in retail softness due to COVID-19 restrictions earlier this year. In fact, three in five retailers say they will not alter their promotional timing to match Amazon Prime Day’s changes and are adjusting their marketing investments in order to hit those goals.
Brands that leverage new promotional strategies and generate shopping excitement during this timeframe will help fill the void of Prime Day promotions no longer slated for July.
Back-to-School Timing TBD
Compared to last year, parents are twice as likely in 2020 to start their back-to-school shopping before or in July, however retailers say they are 16% less likely to be ready, and many are making multiple marketing plans in order to account for uncertainties.
Because of the unknowns surrounding the back-to-school season, it’s imperative that brands maintain a flexible promotional calendar in July and August and look to reach a broader audience beyond just parents shopping for school supplies. To capture shopper interest regardless of whether or not schools are back in session, retailers can opt for pulsed promotions and turn-key solutions like sitewide codes and cash back offers during well-timed promotional events in July.
Meet Shoppers Where They Are
With many unknowns surrounding store reopenings based on state-level precautions, it’s essential that contactless and flexible shopping options remain to empower consumers to shop how they want—and to ensure a transaction. Brands wanting to optimize in-store options can look at categories like clothing and accessories, as consumers are eager to purchase these products again in physical stores.
Additionally, retailers that promote convenience and the safety measures they are taking as well as those that price match across all channels will be best poised to meet the consumer when and where they are ready to shop.
We’re excited to help our partners reach shoppers, manage demand and grow their business during this crucial time of year. To learn more about how you can jumpstart Q3 sales by participating in our Rebound with RetailMeNot: Mega Savings event in July, email your Account Director or reach out to our Partner Services team.