Deloitte survey: Back-to-school shoppers ready to spend, driven by mobile
New York — A survey released Tuesday by Deloitte found that shoppers are prepped to spend on back-to-school items, and plan to use their mobile phones in the process.
Deloitte’s annual Back-to-School survey revealed that smartphones and online channels will guide bargain-hungry shoppers again this year. More than four in 10 (43%) of smartphone owners indicate they use their devices at least half the time for back-to-school shopping. Price-checking tops shoppers’ lists, cited by 62% of smartphone owners who will use their devices for back-to-school shopping. Nearly half (45%) of those smartphone shoppers will download discounts, coupons and sale information.
Among those who plan to visit social media sites during the back-to-school shopping season, 70% will seek promotions and nearly half (49%) will browse products. Social media users are also increasingly seeking and posting reviews. For example, four in 10 (39%) plan to seek out reviews, up from 28% last year, and the number who plan to post them doubled, from 9% in 2011 to 18% in 2012.
In terms of spending, the survey found that 88% of consumers plan to spend the same or more on back-to-school shopping this year, with higher prices a contributing factor for some families. Among the 34% who plan to spend more this year, nearly six in 10 (58%) cite higher prices as their reason for doing so, and 34% say their children need more expensive items than last year.
Despite these intentions, few intend to forego the tradition of setting a budget or looking for a sale. Nearly six in 10 (59%) consumers have a budget in mind for back-to-school shopping, and while 66% say they will shop for items on sale, fewer respondents feel stores are offering them more value for their money (36% in 2012 versus 47% in 2011).
"Consumers’ price sensitivity and bargain habits have been hard to break," said Alison Paul, vice chairman, Deloitte LLP, and retail & distribution sector leader. "Retailers will likely have to give consumers a good reason to fill the baskets in their stores, such as promotions that incentivize volume purchases or return trips. Retailers may need to quickly analyze their customer data and traffic to identify, replenish and market the popular items that can keep the momentum up throughout the season."
Additional back-to-school spending may come from students. Deloitte’s survey found that 68% of parents expect their school-aged children to spend $51 or more, an 18 percentage point increase over 2011.
Deloitte’s survey shows that traditional media and word of mouth will serve as the strongest influences over what consumers plan to buy this year. Television ranks as the No.1 source for parents to hear about the items they intend to purchase, cited by 41% of respondents, followed by family members (37%), newspapers (37%) and friends (36%).
Canadian home-improvement chain rebuffs Lowe’s offer to acquire
Mooresville, N.C. — Lowe’s Cos. on Tuesday confirmed a July 8 proposal to acquire Canadian home-improvement and hardware retailer Rona, but said the Quebec-based chain rejected the $1.9 billion offer.
According to the 800-store Rona, the sale to Lowe’s would not be in its best interests.
"Rona’s strategic focus remains to execute on its business plan with a view to capturing the significant opportunities that it sees for the business," Rona said in a statement.
According to Lowe’s, talks between the two companies launched last year, and negotiations included at least one previously rejected proposal. Despite the rebuffs, Lowe’s said it plans to continue its efforts to acquire Rona.
“We believe a combination of Lowe’s and RONA makes enormous business sense,” said Robert Niblock, Lowe’s chairman, president and CEO. "We encourage the board of Rona to reconsider its position."
Under Lowe’s proposal, Rona would remain a Quebec-based company with the Canadian head office in Boucherville, Quebec.
Rona turns down $1.9 billion acquisition bid by Lowe’s
Lowe’s made an offer, but Rona refused.
The two North American home improvement giants will continue to operate as competitors in Canada, where Lowe’s has been growing organically for the past several years amid rumors that just such an acquisition play was in the cards.
In the end, the Canadian retailer and distributor Rona rebuffed a $14.21 per share — $1.85 billion — acquisition offer. "Rona’s strategic focus remains to execute on its business plan with a view to capturing the significant opportunities that it sees for the business," Rona said in a statement.
According to Lowe’s, the non-binding proposal was delivered to Rona board chairman Robert Paré, on July 8. Rona’s board asked Lowe’s for additional time to consider the proposal but, then rejected it.
On Tuesday, Lowe’s made it’s proposal public, and it can be seen here.
Lowe’s, which operates 31 stores in Canada, says it hopes the Rona board will reconsider the offer.
In its pitch, Lowe’s said that “Combining Rona’s Canadian operations with Lowe’s strong global presence would provide Rona’s operations with substantial benefits by creating a strengthened Canadian home improvement retailer with world-class capabilities across channels and geographies. While the combined Canadian business would undoubtedly benefit from Lowe’s global reach and deep supplier relationships, Lowe’s believes that preserving Rona’s local market expertise and relationships is critical.”