Published August 08, 2008 11:23 pm - NEW YORK -- Retailers preparing for a difficult back-to-school season are getting creative in their attempts to entice shoppers into the stores -- aggressively introducing new products, slashing prices and amping up marketing in the battle for parents' bucks.
Retailers ramp up promotions for back-to-school
By Mae Anderson
NEW YORK -- Retailers preparing for a difficult back-to-school season are getting creative in their attempts to entice shoppers into the stores -- aggressively introducing new products, slashing prices and amping up marketing in the battle for parents' bucks.
But analysts say their efforts will likely make little difference to consumers pressured by rising costs, who will likely stick to shopping at discounters -- particularly as tax-rebate checks dry up and they aren't finding "must-have" fashion items in the stores.
"It will probably be one of the two or three most disappointing back-to-school seasons this decade," said retail consultant Burt Flickinger III, managing director of Strategic Research Group. "It will be very promotional. Consumers are more cash- and credit-constrained than any other time in U.S. history."
While consumers may not see a new backpack or pair of jeans as essential this year, retailers are trying whatever they can -- slashing prices of selected items, offering cash back or discounts on additional items, running some promotions at certain times of day.
"We assume it's going to be a very difficult customer environment so from a sales and promotions standpoint we'll be extremely competitive," said Mike Boylson, chief marketing officer at JCPenney Co.
The department store chain also is introducing six new lines aimed at teens and young adults during the season, compared with last year, when it introduced only one.
Patricia Edwards, an investment manager at Wentworth Hauser and Violich in Seattle, said the atmosphere was the most promotional she has seen in five or six years.
"Frankly, it smacks a little bit of desperation to me," she said. In terms of department stores such as JCPenney or Kohl's Corp., "the problem right now is traffic," Edwards said. "Wal-Mart has a captive audience because of the food they sell. People are already there so it's a little easier for them."
That's the case for Michelle Portillo, a public relations manager at National CineMedia in Centennial, Colo., and the mother of an 8-year-old and 4-year-old, who says she is "dreading" the back-to-school season.
"I just don't have the disposable income I had last year" because of rising costs, she said. For her daughter who is entering third grade, Portillo bought a dress for the first day of school but plans too hold off on buying any more clothes.
"I will purchase a new backpack from Wal-Mart with all her school supplies, but nothing else will be new at the beginning of the school year," she said.
Another problem experts cite is a lack of "must-have" fashion trends. Old favorites such as jeans and T-shirts are likely to be among the biggest sellers.
"There's an absence of anything new in fashion," said Marshal Cohen, chief retail analyst at NPD Group.
To get people past that thinking, retailers are going beyond any usual price cuts. Gap Inc. is expanding its "friends and family" discount program. American Eagle Outfitters Inc. is offering a free T-shirt to anyone who even tries on a pair of their jeans.
Some stores also are offering to cover the taxes on people's purchases. American Eagle is offering a discount to Florida shoppers, since their "tax-free" shopping week was canceled this year. Circuit City Stores Inc. plans to absorb the cost of state and local sales taxes for purchases at its California stores during two days in August.