Consumers Defer Back to School Shopping in Favor of Purchases for the Home, IBM Reports
ARMONK, N.Y., Sept. 18, 2012 /PRNewswire/ — While U.S. consumers shopped this July and August, they were not buying clothes and notebooks for their children but rather items for the home. According to findings from IBM (NYSE: IBM), the biggest retail gains this back to school shopping season came from home goods purchases which increased 30 percent in July and more than 25 percent in August over their respective months in 2012.
While experts speculate that consumers were holding off on back to school purchases to eye the choices of their peers, social networks appeared to drive purchases with social sales increasing 69.7 percent. The social influence was especially apparent when it came to apparel, where shoppers referred to online stores through social networks generated a 2.2 percent of all sales in August, an increase of more than 113 percent over 2011.
Mobile commerce also continued to grow with sales increasing 15.7 percent in July and 15.4 percent in August. For home goods mobile sales reached a high of 20.1 percent.
The growing influence of both mobile and social media further validates the need for a Smarter Commerce approach that helps retailers attain, understand, and act – in real-time – on deep insights about their customers in order to meet the unique needs of each.
“Back-to-school season is proving to be a trigger event that spans across categories beyond just notebooks and backpacks. Retailers that are cashing in are those who understand how this trigger drives sales for home furnishings, as well as for apparel, and can target their inventory levels and promotions accordingly,” said Jill Puleri, Global Retail Leader, IBM. “This year’s winners were the companies that successfully connected consumers with the right products, at the right price, and through the right medium-whether in a store, a mobile device or through popular social media channels.”
“When I speak to executives at the leading companies, one of the discussions that continues to come up most frequently is around harnessing big data and their efforts to try and understand how to take all the noise and word of mouth that is being generated and make sense of it,” added W. “RP” Raghupathi, Professor of Information Systems, School of Business, at Fordham University. “Today, with so many consumers shopping and sharing their opinions online, we are seeing more and more retailers tap into the power of sophisticated analytics technology to help them react faster to evolving trends and customer needs.”
Part of IBM’s Smarter Commerce initiative, the IBM Benchmark is the only analytics-based, peer-level benchmarking solution that measures online marketing results from the web sites of more than 500 leading U.S. retailers.
The IBM benchmark reveals the following back to school trends that are critical to chief marketing officers (CMO), e-commerce leaders and customer service professionals:
- July and August Online Sales: Overall sales for July increased more than 11 percent over July 2011 while August slowed with sales up 3.9 percent compared to last year.
- Social commerce: In July, shopper referrals to retailer sites from social networks generated 1.6 percent of all sales, an increase of 25.1 percent over last year. This trend continued in August reaching 1.8 percent, an increase of 69.7 percent over the previous year.
- Mobile commerce: Mobile commerce remains strong with sales from mobile devices reaching 15.7 percent in July and 15.4 percent over the month of August.
As for vertical industries the following categories experienced success over this timeframe:
- Home goods: In July online sales grew by just over 30 percent and 25.5 percent in August with consumers shifting some back to school purchases toward the home. Over this period mobile sales also thrived, reaching 19.1 percent in July and topping out at 20.1 percent in August.
- Department stores: Online sales grew 22.1 percent in July and 28.7 percent in August. Over this period mobile sales were strong, hitting 19.2 percent in July and 18.9 percent in August.
- Apparel stores: Online sales were up 9.2 percent in July and 9.8 percent in August. Over this period mobile sales reached 15.1 percent and 16.4 percent in August. Apparel stores also experienced strong social commerce with shoppers referred to their sites from social networks generating 1.4 percent of all sales in July and 2.2 percent in August, up more than 113 percent over 2011, more than any other industry.
- Office Supplies/Electronics: Online sales grew by 6.3 percent in July while dropping by .92 percent in August. Mobile sales reached 5.7 percent in July remained steady in August a 5.9 percent.
Part of IBM’s Smarter Commerce initiative, the IBM Benchmark provides intelligence on how consumers are responding to the products and services being offered to them. With these insights CMOs and teams gain deeper insight into each customer which they can use to present personalized recommendations, promotions and other sales incentives across the wide variety of channels–including social networks and mobile devices.
More information on Smarter Commerce can be found at www.ibm.com/smarterplanet/us/en/smarter_commerce/overview/
IBM Media Relations