Missing the Bus: The Overlooked Potential of Back-to-School Campaigns
By Dave Donnelly, Executive Director of Retail Sales, Eyeview
Retailers’ back-to-school campaigns are in full force across the nation, but it takes more than a successful circular to get a passing grade in the school of modern advertising. With competition for consumers’ attention at an all-time high, real advertising success isn’t truly possible without long-term, cost-effective results.
Yet, too many marketers continue to view seasonal campaigns as one-offs designed to increase sales of specialized product sets within a relatively small window. While driving sales is, of course, almost always a priority for any retailer, a short-term outlook will lead marketers to miss the bus on opportunities to boost their bottom line for the months and years to come.
After all — to extend our school analogy — it takes more than an ‘A’ on one test to pass a semester. Good students invest in the future and marketers should, too.
Through the new digital tools now available, virtually any campaign can be designed to provide tangible, long-term value. From increasing the effectiveness of future ads to generating customer loyalty and improving ROAS (Return on Advertising Spend), campaigns like back-to-school offer hidden potential to advertisers willing to take a holistic approach to their seasonal activities. Helping retailers better understand their customers on an individual basis, the data digital delivers is the key to empowering each and every ad a retailer will ever serve.
Here are five best practices to using data to empower your back-to-school campaign for long-term results:
1. Don’t neglect video. Digital video is a powerful advertising tool that is surprisingly adaptable for a wide range of campaigns. For instance, many retailers have been seeing strong results from “v-circulars,” a fresh take on traditional circulars that uses video to highlight products and promotions. With data-enabled video, it’s possible to tailor v-circulars to include customized products for specific individuals.
2. Develop product sets customized by demographic group. While the stereotypical back-to-school shopper demographic has traditionally been mothers, retailers have seen increased purchases from expanded demographics, with fathers tending to make technological purchases (iPads, etc) for their children, and teenagers themselves buying fashion items like backpacks and device cases. Knowing that these different demographics have different product preferences, retailers can spare themselves the expense of running entirely separate campaigns for each group, and use demographic data to show relevant product sets to individual shoppers.
3. Track ancillary purchases. An ad that captures a shopper’s attention and leads them to multiple purchases, including items not featured in that ad, is considered to be a bonus. But by digging further into that bonus purchase and relating it back to both the item being advertised and the consumer doing the purchasing, brands can develop deep insights about what their customers care about, and use these insights to optimize future campaigns.
4. Adjust for a shorter advertising window — optimize in real-time. Optimizing an ongoing campaign is substantially less expensive than kicking off an entirely new effort. By tracking a campaign’s results on a continual basis, advertisers can see who is buying what, and why — and then feed this data back into campaigns to improve how ads are being served.
5. Develop granular insights based on sales and post-impression activity. Brands must look beyond clicks and impressions metrics to gauge their campaign results and inform their future efforts. By tying post-impression data into their analytics, advertisers can learn more about a customer’s journey. For instance, did a consumer view an ad, then read a review and ultimately make an in-store purchase? This type of information can be invaluable for identifying weakness along the sales process, and optimizing future campaigns.
Don’t waste your back-to-school campaign in a single-minded pursuit of short-term sales. A data-based, long-term approach is what separates advertising dunces from honors students.
Walmart’s not so solid second quarter
Walmart met low second quarter sales and profit expectations it set for itself but significantly lowered its full year outlook due to a tepid third quarter sales forecast and increased e-commerce and health care costs.
Total company sales increased 2.8% to $119.3 billion while same store sales at U.S. stores and Sam’s Clubs were flat during the period ended July 31. The total sales figure included a $696 negative impact related to foreign currency translation, without which sales would have increased 3.4% to $120 billion. Net income increased 0.6% to $4.093 billion from $4.069 billion, but earnings per share declined to $1.21 from $1.23. Walmart had forecast earnings in a range of $1.15 to $1.25 and analysts’ consensus estimate was $1.21.
Despite the decline from the prior year, Wal-Mart Stores, Inc., president and CEO Doug McMillon said he was pleased with the earnings per share performance.
“As it relates to the positives from the quarter, I’m encouraged by the performance of our International business, our Neighborhood Market sales in the U.S. and by our e-commerce growth,” McMillon said. “As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both reported flat comp sales. Stronger sales in the U.S. businesses would’ve also helped our profit performance."
The flat U.S. comp performance followed a 0.3% decline the prior year, as an increase in transaction size offset a decline in traffic. Total sales for Walmart’s largest division increased 2.7% to $70.6 billion due to the addition of new selling space. However, operating profits fell 2.4% to $5.25 billion.
“We delivered net sales growth of $1.9 billion in the second quarter,” said Greg Foran, Walmart U.S. president and CEO. “Our e-commerce business, including store-fulfilled sales, delivered double-digit sales growth,” added the former Walmart International executive who replaced Bill Simon as head of the U.S. division last week.
Same store sales at U.S. stores are forecast to be flat in the third quarter following a 0.3% decline last year.
Sam’s delivered top line growth due the addition of new clubs, but same store sales were flat. Total sales increased 1.7% to $13 billion, excluding fuel. Operating profits fell 4.6% to $494 million.
“Our top priority at Sam’s Club remains growth – growing our member base and growing sales,” said Rosalind Brewer, Sam’s Club president and CEO. “We’re taking steps to increase the value of membership through investments in Plus member cash rewards and the cash back Mastercard. It’s still early, but member response has been positive.”
Sam’s is expecting third quarter comps to be slightly positive.
The relative bright spot in Walmart’s second quarter was the international division where sales on a constant currency basis increased 5.3% to $34.6 billion and operating profits grew 8% to nearly $1.5 billion.
“We remain focused on price investment across all our markets and expect to continue driving improved comp performance,” said David Cheesewright, Walmart International president and CEO. “I am pleased with the trends in many of our markets, which were driven by a continued focus on being the lowest cost operator.”
Faced with ongoing difficulties to drive top line growth at its two U.S. divisions coupled with expense pressures, Walmart said it expects third quarter earnings per share of $1.10 to $1.20 and lowered its full year forecast to a range of $4.90 to $5.15 from an earlier forecast of $5.10 to $5.45.
"Our guidance includes incremental investments in e-commerce and headwinds from higher health-care costs in the U.S. than previously estimated,” said CFO Charles Holley.
Paula Price joins Dollar General board
Former Ahold and CVS executive Paula Price is the newest member of the Dollar General board of directors.
She joins the board of the 11,500 store retailer at a pivotal time. Dollar General is in the midst of a search for a top executive to succeed Rick Dreiling who has indicated he will step down next year and two of the company’s arch rivals, Dollar Tree and Family Dollar, have announced plans to merge.
Price became a senior lecturer at Harvard Business School last month, but prior to that she was CFO at Ahold USA from May 2009 until January 2014. Prior to that, she served as SVP, controller and chief accounting officer at CVS Caremark from 2006 until 2008. Earlier in her career, Price served as the CFO of the Institutional Trust Services division of JPMorgan Chase and held several other senior management positions in the U.S. and the U.K. in the financial services and consumer packaged goods industries. Price currently serves as a director of Accenture and Western Digital Corporation and previously served as a director of Charming Shoppes.
“We are delighted to welcome Paula to the Dollar General board of directors,” Dreiling said. “Her broad financial experience, including as chief financial officer of Ahold USA and as a board member for several public companies, brings valuable insights to our company as we continue to grow our business.”
Price earned an MBA from the University of Chicago and a BS degree from DePaul University.