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Key take-aways:

• Emails with an offer in the subject line had a 21% higher transaction rate than those without
• Online search traffic was up 10% over 2010 with search teams like “back-to-school clothes” and “back-to-school deals” driving the increase
• Searchers tend to be female and between the ages of 25 and 44

Questions marketers should ask themselves include:

• What are the characteristics of my target audience – who are they, how do they shop, what resonates with them?
• How can I make my marketing messages more targeted so that they stand out from the crowd?
• What offers and promotions should I employ?
• How should my marketing budget be allocated across multiple channels?

To learn the answers to these questions and more, visit our back-to-school homeroom to see the latest data, emerging trends and opportunities that exist for marketers this season.

Data from Experian Simmons demonstrates the effect certain attitudes can have on back-to-school shopping behavior. When moms were asked how strongly they agreed with the statement “I find it hard to resist my kids’ request for non-essentials,” we noticed an increase in the percentage who agreed beginning around the end of June.

The increase is especially pronounced from the middle of July to the end of September. This happens to coincide with the heart of the back-to-school shopping season when moms are most likely to be keeping an eye out for special offers and promotions. The data also provides some evidence that moms are likely to be prime targets for spending on their children earlier in the back-to-school season than marketers might currently think.

But it isn’t really possible to know what all of your prospective customers are thinking. Unfortunately, you can’t speak to each and every mom or dad of school age children in a personal fashion – but neither should you treat your entire back-to-school audience the same way.

Casting a wide net to capture a faceless target audience used to work pretty well when I was a kid a few decades back. It was really a matter of which advertiser shouted the loudest and with the biggest hook. Not only that, but when Sears and Kmart were the only retailers in town, my mom didn’t have much of a choice. And how many marketers really bothered to target dads with back-to-school promotions back then?

Today, there are lots of ways to dissect the back-to-school market. Sure, we can describe households with kids using the usual demographics including age of parents, number of kids, age of children, household income, etc., but that doesn’t really capture the true essence of the back-to-school market. Why? Because demographics alone don’t paint a very interesting or clear picture of how to attract shoppers who are searching for all kinds of back-to-school merchandise and, at the same time, getting bombarded with multiple offers.

So let’s study the market more closely. I like to define the back-to-school audience in multi-dimensional terms. By doing this, we can develop specific lifestyle segments that can be targeted with the most relevant back-to-school offers and promotions. Here are some examples taken from Experian’s Mosaic® USA lifestyle segmentation solution:

• Babies and Bliss
• Families Matter Most
• Sports Utility Families
• Picture Perfect Families
• Kids and Cabernet
• Hispanic Harmony
• Cul de Sac Diversity

Based on an analysis of purchase and shopping data from Experian Simmons, we can see that these seven segments are quite unique in terms of their shopping attitudes and behaviors. Let’s take a look at some examples:

About 39% of adults who are parents with children living at home agree with the statement “I prefer to shop with my family.” But the percentage who agreed with this statement varies significantly when looking at our seven targeted segments. Cul de Sac Diversity and Hispanic Harmony are much more likely to agree. This could reflect cultural differences and their impact on shopping behavior. In this case, shopping is a family event. By contrast, some of the more affluent segments are less likely to agree. Consumers from the Kids and Cabernet and Picture Perfect Families segments might be more apt to be doing their shopping with fewer family members in tow.

Now take a look at how children have an influence on brands shopped.

Here, the influence of children on brands purchased is most pronounced for segments such as Kids and Cabernet and Babies and Bliss. Shoppers from the Hispanic Harmony and Cul de Sac Diversity segments also have an above average likelihood to say their children influence the brands they choose, but the influence is not as strong. The key take-away here is that certain segments are more brand-conscious than others and, where possible, the power of the brand should be leveraged when developing marketing campaigns that are targeted to these particular segments.

When we look at the influence of the Internet on shopping behavior, a different pattern emerges.

Consumers from the Babies and Bliss segment are most likely to agree with the statement “I often use the Internet to plan my shopping trips.” At the opposite end of the scale, Families Matter Most and Hispanic Harmony are not as likely to use the Internet to help plan their shopping. Clearly, these segments do not behave the same way.

The collective findings from these three statements alone mean we need to develop a unique back-to-school marketing plan for each of the segments. For example, we might target the Cul de Sac Diversity segment with display ads and emails emphasizing a wide selection of brands that kids like. This could be coordinated with certain in-store events and promotions that are designed to appeal to the entire family.

Now let’s look at who the bargain hunters are.

Somewhat surprisingly, Picture Perfect Families are 21% more likely to agree that they shop around to take advantage of special promotions and bargains. I say “surprisingly” because they are one of the more affluent consumer segments out of our targeted audience. This indicates that they are actively seeking out and searching for good deals. Consumers from Babies and Bliss and Cul de Sac Diversity also have an above average propensity to be looking out for special deals.

But notice when asked if they have used a coupon either online or from an email promotion, it’s Sports Utility Families and Families Matter Most who are most likely to agree. Consumers from both of these segments didn’t particularly stand out in terms of their likelihood to use the Internet for planning their shopping trips but they are highly responsive to targeted promotions. This could be an indication that they are less proactive in seeking out special deals but highly reactive when approached with a compelling offer they can’t refuse.

For more information, watch our recent webinar about planning your back-to-school marketing campaigns in style. You’ll see more information on what’s outlined above as well as informative stats around search behavior and how to target the lucrative college student market.

I remember growing up as a kid in rural Massachusetts thinking about how “back-to-school” TV ads were so irritating. Back-to-school? In July? I’m not even half way through my summer vacation! Little did I know back then that marketers like to get an early start to the back-to-school sales season by planting seeds with their target audience and hoping those seeds grow into a healthy crop of new customers. This remains true today and planting season starts even earlier.

The back-to-school sales season represents a huge opportunity for marketers. Here are some facts and figures that help quantify the size of the market:

• According to the National Retail Federation, consumers will spend approximately $70 billion on back-to-school merchandise. About $23 billion of this is spending by parents of children in kindergarten through 12^th grade. The remainder represents spending by students starting or returning to college. All told, the back-to-school season is the second largest consumer spending event for retailers outside of the winter holidays.
• According to the U.S. Census Bureau, this year there will be over 55 million students enrolled in schools from pre-kindergarten through high school. About 56% of these students are in grades one through eight, 28% are in high school and 15% are enrolled in preschool or kindergarten.
• About one-third of households contain children under age 18. That translates to roughly 38 million households. The vast majority of these contain school-age children.
• The back-to-school season is not just about reaching kids in elementary school, middle school, junior high school and high school. Another 20 million students are expected to be attending college. That’s a huge opportunity to sell things like dorm room furnishings, electronic gadgets and computers, just to name a few.

With every marketing opportunity come certain marketing challenges. It’s never easy. Marketers of back-to-school products face their own set of challenges when vying for the attention of parents of school-age children. Here are some specific examples:

• Who are my key targets and how can I differentiate my marketing message?

Targeting a market that includes a vast array of families with contrasting attitudes, opinions, motivations, lifestyles and shopping behaviors is incredibly challenging. Not all of these families are working from the same shopping list. And not all of these families will respond to the same marketing message. Segmenting your market into finer target audiences is highly recommended.

• How should my marketing budget be allocated across multiple online and offline channels?

You have multiple sales and marketing channels to consider. You don’t want to build a marketing plan without a well-defined strategy for reaching your best targets. For instance, moms have a greater propensity to have a smartphone compared to the overall adult population. Thus, marketers should then be thinking about integrating mobile applications into their overall strategy.

• What can I do to make my message stand out above the crowd?

Put yourself in the consumer’s shoes. I’m sure some of you are parents with children in school or in college. It’s a very crowded and cluttered back-to-school marketplace with many, many retailers clamoring for attention. One idea for standing above the crowd is to start by identifying your existing customers who are most likely to have families with children. Then send them an email early in the summer with suggestions for fun things to do this summer season. This can be followed up later with an email campaign containing some tips about getting ready for back-to-school. The key is to grab their attention and start engaging early.

• What variety of offers and promotions will enable me to capture a significant share of back-to-school expenditures?

To capture your fair share of the back-to-school market you’ll need to develop offers and promotions that are both enticing and relevant. This requires learning as much as you can about your prospects and what motivates them to buy.

For instance, a typical mom with elementary school-age children might enter the back-to-school season with the following thoughts:

“I want to buy him the cool gear to go back to school with: new clothes, shoes, backpack and lunch box. And I don’t mind, I actually LOVE back to school shopping.”*

That mom may quickly respond to your marketing message. Or, you could have a mom with these thoughts:

“I’m not upper class – we’re in the lower/middle income bracket and money is tight for us. I budget for school expenses as I would anything else…and I won’t have my son miss out because ‘we can’t afford’ something… I’d give up something else first.”*

She loves shopping for back-to-school, she has budget limitations, and she’s willing to make certain adjustments to her budget with the best interests of her child in mind. If you knew what she was most likely to be thinking, do you think it would influence the messaging and offers you would use to attract her? Well, of course. Attitudes shape shopping behavior.

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Watch our recent webinar about planning your back-to-school marketing campaigns in style. And stay tuned for part two of my blog series on the topic in a few days.

*Feedback was compiled from PHD in Parenting: http://www.phdinparenting.com/2011/08/22/who-should-pay-for-school-supplies/

It seems those marketers are on to something – we’re seeing that mailings in the first half of August garner the most revenue. Why the first half of August? Success could be related to a number of factors, including:

• When the first day of school is after Labor Day, families may choose to get their shopping done before their end-of-summer vacations.
• When school starts in August, shopping may be driven by peer-group influence – children see what peers are wearing and ask their parents for similar items.

This information can be used to drive your messages and offers.

There are 55 million school kids out there and even more parents with wallets at the ready.

There are 55 million school kids out there and even more parents with wallets at the ready. We’ve been thinking about how to reach these plumb shoppers and will cover a variety of marketing strategies and tactics during a webinar on Tuesday, May 15 at 1:00 p.m. EST. Here are a few of the questions our subject matter experts will answer:

• Who are my key targets and how can I differentiate my marketing message?
• How should my marketing budget be allocated across multiple online and offline channels?
• What can I do to make my message stand out above the crowd?
• What variety of offers and promotions will enable me to capture a significant share of back-to-school expenditures?

Visit the Back-to-School Homeroom to register and to download an email-focused white paper.

• Sneak Peek — Go Back To School In Style!
• Reading, Writing, Arithmetic & Shoes!
• FREE Shipping — Today Only! Get Your Back-to-School Shopping Done Today!
• Up to 40 percent Off Just in Time for Back to School!

Weekly tracking data from Experian Simmons found that online shopping during the previous two years began a seasonal increase in August/September and ended only after the winter holidays were over. In 2009, for instance, the share of online adults who made purchases online during a 30 day period rose from a low of 27% the week of September 21 to a high of 39% the week of January 11, 2010. Likewise, we report that on August 2, 2010, 27% of online adults had made a purchase online during the previous 30 days (the lowest point of the year) and rose to 43% on December 27, 2010 (the highest point recorded in over three years).

If trends hold true, the 2011 online purchasing surge is well underway and retailers will have to be quick to pivot from the back-to-school theme to holiday without missing a beat.

Back-to-School: Not just for parents anymore

While the seasonal effect of online shopping is less pronounced among online adults without kids in the home, the pattern closely adheres to that observed among those with kids. Interestingly, childless adults also show an uptick in online purchasing starting in late summer even though they are unlikely to be doing any back-to-school shopping. These shoppers are possibly lured by seasonal specials just like parents even though they are not being targeted directly.

This trend strongly suggests that retailers should not forget childless shoppers in their back-to-school marketing campaigns. Offering deals and specials to this seasonally forgotten group will likely result in a further boost in sales. Furthermore, while online parents report a higher seasonal spike in online purchases, they also exhibit a strong dip in purchasing after the New Year. Online adults without kids take a break after the holidays as well, but they’re back in the game more quickly providing retailers with much needed revenue in the low season.

Many marketers have historically grouped the back-to-school audience into one collective segment of households with school-age children.  This leaves money on the table because there are better ways to target Moms with kids when developing a back-to-school promotional strategy.  Just like the inventory of new clothes and notebooks that retailers have neatly arranged on store shelves, families with school-age children come in an assortment of sizes, shapes and colors.

What is the most effective way to segment the back to school audience?

This begs the question “”  Marketers can always turn to basic data elements for segmentation.  These include age and gender of children, number of children in the household, parent’s age, household income, and the full spectrum of school classifications (preschool, elementary school, middle school, junior high school, high school, etc.).  Though a more powerful approach would be to utilize a segmentation methodology that recognizes the lifestyle and behavioral differences among households that are most likely to contain school-age kids.

Here are three snapshots of family-oriented, children-centric market segments that are highly likely to be responsive to a wide variety of back to school promotional offers.  All three segments have been selected from Experian’s Mosaic lifestyle segmentation solution.

Babies and Bliss

Description: Babies and Bliss represent the premier lifestyle for large families in America.  With a majority of households containing at least five people, this segment is a haven for large broods living in new suburban subdivisions.  Parents in this segment tend to be in their 30s and 40s.  There is a wide range of kids in these households, from preschoolers up to those in high school.  There is also money in this segment, reflecting the high educations and low six-figure incomes that come from dual earners employed in professional and technical occupations.

Some key traits of Babies and Bliss households include upscale tastes, large families, well-educated, conservative views, financially-savvy, convenience, and power shopping.

Implications:  Given their large families, it’s not surprising that Moms from Babies and Bliss households are value-conscious shoppers who seek appealing deals for quality merchandise.  They carry coupons, like to comparison shop when buying expensive items and head to the clearance rack first whenever they buy clothes, which tend to be conservative in style.  In the mall, these Moms follow their children’s lead but also remain very open to consider generic store brands rather than high-priced name brands.  They like to shop (it’s practically a sport) and are happy to open their wallets at department stores, specialty shops, catalogs and online sites.  They especially pride themselves in being very Internet-literate.  With their jobs, kids and errands, they appreciate the convenience of shopping online and are receptive to email ads, sponsored Websites and Web page links.

Families Matter Most

Description:  A fast-growing segment, Families Matter Most consists of young, middle-class families in suburban locations leading active, family-focused lives.  Nine out of ten households have kids (nearly two-thirds have multiple kids).  These young, middle-class families have settled into a landscape of recently built subdivisions.  Many adult household members are urban exiles who’ve sought a suburban setting with room for kids to grow.  They are proud of their new homes, schools and shopping centers, where they can find everything they need just a short drive away.  Families Matter Most distinguish themselves by having adopted attitudes and routines to help them effectively juggle the responsibilities of work and child-rearing.

Some key traits of Families Matter Most households include sprawling families, family values, casual perspectives, price-sensitivity, credit revolvers, conformists and risk avoidance.

Implications:  Families Matter Most are casual in their attitude except when it comes to their children.  They take their role as parents very seriously, which they describe in conservative terms.  They avoid risks and feel little need to make a statement with their possessions.  As shoppers, Moms from Families Matter Most households are price-sensitive consumers who look for discount stores that offer durable and comfortable fashion.  They are worried about spending money impulsively and try to be informed consumers.  Most are happy to wear last year’s fashions and they tend to zero in on a few stores that carry the affordable brands they prefer.  With their growing families they shop most often at discount and mid-market national chains including Target, Walmart, Kohl’s, Toys R Us and Old Navy.

Cul de Sac Diversity

Description:  Cul de Sac Diversity consists of ethnically diverse, middle-aged couples with school-aged children.  This segment has an above-average concentration of Hispanic and Asian household members.  Nearly one-third of Cul de Sac Diversity adult members are foreign-born.  They are three times more likely to be bilingual compared to U.S. adults overall.  These upper-middle-class households are well on their way to achieving the American dream.  They believe in home and family, but also recognize the need to work to get ahead.  They look at their work as a career, not a paycheck, and are willing to give up family time in exchange for the opportunity to advance in their careers.

Some key traits of Cul de Sac Diversity households include ethnically diverse, bilingual, mainstream mindset, community-minded, tolerant and career-focused.

Implications:  Moms from Cul de Sac Diversity households like to shop with friends and family members in order to get everyone’s opinions on potential purchases.  As consumers, they often seek status and recognition through their possessions.  They are attracted to designer labels and sometimes spend more on clothes than they can truly afford.  They like going to mainstream retailers to shop for their children including Kohl’s and Macy’s as well as sporting goods chains such as Dick’s Sporting Goods and Sports Authority.  They are only moderately receptive to online advertising.

Deploying a back to school marketing strategy that treats all households with school-age children as one undifferentiated market is like creating a basic lesson plan and applying it to all grade levels of a one-room schoolhouse.  Instead, marketers are encouraged to study their target audience more closely.  With key insights in hand, they will have acquired the necessary prerequisites for graduating to a strategy that acknowledges the shopping characteristics and needs of a diverse and potentially lucrative audience of back-to-school Moms and their children.

A big part of a successful back-to-school email marketing program is knowing the best time to start promotions; what types of mailings will drive the most customer response; and how to capitalize on peak times of buying interest on a more granular, or product, level.

Back-to-School mailings with offers in the subject line had 69 percent higher transaction rates than those without offers.

According to a new analysis, major email marketing trends and opportunities for driving back-to-school retail sales, include:

• September shows a higher proportion of back-to-school supply promotions in comparison to apparel.
• Search queries including “back to school” have increased each year for the past three years.
• Back-to-School mailings with offers in the subject line had 69 percent higher transaction rates than those without offers. (This is noteworthy given the fact that during last holiday season, for example, campaigns with offers in the subject line provided an average 20 percent lift in transactions).
• And more…

Click here to view all findings in the new white paper, 
Back to School Countdown: The A,B,C’s of preparing your email programs for the big day

For many marketers, segmentation is like breathing – it comes naturally and is a part of everything they do. To better connect with your target audience, use a good segmentation system with multiple layers that provides a breakdown of essential information while tying in lifestyle and transactional data.

Consider marketing to parents. The most basic information includes demographics such as age, income, presence of children, etc. Add to that lifestyle information – the family has two working parents who rely heavily on the Internet for research and purchase convenience. The transactional data can really set apart where a parent falls on the parenting lifecycle. For example, is the parent still purchasing diapers and feeding supplies for their infant or bedding, towels and a coffee maker that might indicate their “baby” is headed to college? Both parents may look similar when comparing demographic and lifestyle information but the transactional data differentiates their needs.

According to Experian Marketing Services:

• Parents use the Internet far more than the average American
• Moms are 34% more likely to buy products online and 33% more likely to participate in a blog than the average adult.

“Marketers are targeting more carefully based on both the parents’ life stage and consumer behavior,” says Jan Jindra, senior product market manager at Experian Marketing Services.

“Younger parents, and those of smaller children, have different information needs than parents of older or college-age children. It’s not only the life stage they’re in, but the lifestyle,” Jindra says.

Read the full article and check out the latest in marketing to parents in DMNews: http://www.dmnews.com/household-brands-observe-parents-needs-in-defining-segmentation-tactics/article/205902/.

Since the onset of the recession, the propensity of moms to indulge their children has been on the decline. In fact, as of May 3, 2010, Experian Simmons classified only 71% of moms ages 18 to 39 as indulgent* down from 74% who were indulgent on May 4, 2009 and 80% who were indulgent on May 5, 2008. Fortunately for retailers, both the back-to-school and holiday shopping seasons serve as a sort of stop loss if not an outright reversal of the decline as more moms indulge their kids during these key times of year than they do during other months.

Experian Simmons is already seeing this trend during the current back-to-school season. As mentioned above, the percentage of moms who were indulgent had fallen to 71% by the end of the 2009-2010 school year. But by June 21, 2010–when many retailers were preparing to roll out the school supplies–fully 83% of moms were indulgent. This trend illustrates that even if times are less than ideal, moms will usually find a reason to indulge their children – a speck of good news for troubled retailers.

Experian Simmons will continue to monitor this and other important consumer trends and share those findings here. To be the first to know when new insights from Experian Simmons DataStream are available request an alert here.

*Indulgent moms are 18-39 year old moms who agree with one of the three statements: “I often indulge my children with little extras;” “My children have a significant impact on the brands I choose;” “I like to provide my children with the things I didn’t have as a child”