In this podcast, Lori, still practicing social distancing, sits in the studio by herself talking with Megan Rainey, NaviStone's Head of Marketing, about the back to school season in 2020. Hear what parents and educators are considering and how retailers can prepare.
Lori Paikin: Hi, everyone. Like last quarter, here I am sitting in the studio alone recording the Two Gals And Some Data Podcast. The topic we've chosen for today may seem unusual given so much uncertainty around this topic, but we decided to dedicate today to back to school. This is typically the time when we're actively engaged in our back to school marketing plans. As school's rolling start dates begin next month.
With me today via phone is Megan Rainey, Navistone's head of marketing. I've asked Megan to join today as she's not only a marketing expert, she's also the mother of two young girls going back to school next month and the wife of a long time educator here in one of Colorado's public schools. Thanks, Megan, for joining today to not only talk about data, but how you can use data to make more money.
Megan Rainey: Hi, Lori. Thanks for having me.
Lori Paikin: What a unique time to not only be a marketer, but also the mother of school-aged kids and the wife of an educator. What are the conversations like in your house as you think about school starting up in just a few weeks?
Megan Rainey: Wow. Yes. One of our kids is a preschooler, so we talk about whether she should go back to daycare. Our other is an elementary-age child, so that conversation is a little bit different. We took our preschooler out of her daycare environment in March when public schools closed. We made that decision this summer to keep her at home with her big sister and hire a sitter. It was an easy decision because her big sister was home, too, and we felt it was important for our kids to stay together for the summer this year. Our daycare stayed open with a limited capacity and safety restrictions in place and was incredible in their communication about what was going on and how they were managing the new environment of childcare during COVID.
Our conversations at home are all about risk associated with her going back to daycare versus the risk associated with keeping her home. I need to feel a hundred percent confident that the facility and managers at her daycare are taking every percussion necessary to keep the kids healthy and safe, and to date, there really haven't been any cases there. I do have some hesitations, though, as we get closer to August when I think of toddlers, the germs they share, the physical boundaries they don't quite understand yet. It does make me feel pretty uneasy. Even though it's rare for children to get sick, the belief is that they're still carriers, and so I would feel awful if she got someone else sick by default.
Lori Paikin: Of course. I think that's something that we all think about and worry about just in the normal course of our day. What about your elementary school-aged child? I suspect that conversation is a little different.
Megan Rainey: It is. It's interesting because I do feel a little different about our older daughter's situation. I have a little more ease of mind when I consider sending her back to elementary school. I trust our school district and their leadership.
Lori Paikin: I'm sure your husband appreciates that.
Megan Rainey: Yes. I know, right? I know that as a public school, they have specific guidelines that they will need to adhere to, and that does bring me some comfort. Because our older daughter is a little older, she understands the gravity of what is going on more than my preschooler. I do believe she's more disciplined and wearing her mask, washing her hands, keeping her distance. To me, it's just another risk-benefit consideration.
I can say that this COVID break has been pretty hard on the kids. Seeing peers, staying on track with their education, and socializing is so critical to youth. In fact, we've noticed some mood swings and regressions, and it's been pretty hard to watch. We just work with what we can and try to fill in the blanks the best we can. We Zoom a lot. We do FaceTime with friends, playing safely with neighbors, making pen pals with buddies, but nothing can truly replace what they're missing out on by being home 24/7.
Lori Paikin: Yeah, I really can't even imagine. My husband and I talk about how we would have handled this if our son was still in school and feel thankful that we don't have to. Your husband is in education. What challenges is he facing right now?
Megan Rainey: Well, a lot. It's all we talk about here. As an administrator, there have been several challenges, as you can imagine. First and foremost, he's challenged with acting as a leader in education and being a parent. So the hardest part is developing a structure that would support inviting families back to school and believing that structure is good enough for his own children.
Lori Paikin: Yeah.
Megan Rainey: There are challenges if the kids go back to school and challenges if they don't. Not all kids will be successful in learning through a digital platform. Children with special needs, on IEPs, how do you accommodate this? And then on the flip side, onsite restrictions like wearing masks can pose a new challenge for children with special needs. For example, if a child is deaf, there will be a big barrier with wearing masks in an educational setting and their ability to read lips. He's not only planning for the safety of kids, too. He's got to be sure about his colleagues and the adult population in the building are kept safe as well.
Lori Paikin: Of course. Again, I can't really even imagine. It's times like this that I realize I should just stick with marketing. These are hard decisions to make. Do you send your kid back to school or take advantage of online schooling or even consider homeschooling? But regardless of the path you choose for your family, school will happen, fortunately, and the things we need to buy for the beginning of the school year still need to be bought, school supplies, new clothes. So that leads me to our first trivia question. In comparison, 2019 advertising for back to school has increased, decreased, or remained the same. What do you think?
Megan Rainey: I think it will increase.
Lori Paikin: I would have thought decrease, but the answer is advertising for back to school will actually remain flat to 2019. Now, 2019, on the other hand, was down 20% over 2018, so we're starting from a reduced baseline. And it's important to note that not all advertisers in the space are flat. Amazon drove the back-to-school spending last year with a 44% increase in spend. This year, Amazon Prime Days in mid-July typically kicks off the back-to-school season for them, and this year they increased ad spend by more than 25% for July Prime Days. So I'm going to say we're both right because Amazon is a leader in the space and is increasing spend, but that means most of the others are decreasing. What does back to school shopping look like in your house?
Megan Rainey: It won't look much different to me if the girls stay home or go back to school. We would still want to mark the milestone. We want them to know that e-learning is just as important and special as entering into a new school year in the building. The one change may be instead of a new backpack, maybe it's a new mouse or a keyboard or a cute mouse pad. Definitely something to mark the occasion.
Lori Paikin: Yeah, you make a good point about where you will be spending. Just last week, I read an article that suggests back-to-school spending could hit a record high this year, maybe because as you said, it's a way to mark this occasion, but also families are spending differently. They're investing more in technology, laptops and tablets and headphones, so they can be prepared if learning is online, and purchases of technology products are expected to increase 28%. Laptops cost more than a notebook and pencil. So that leads me to my second trivia question. Back-to-school consumer spending in 2019 was $26.2 billion. What do you think it will be in 2020?
Megan Rainey: Well, Lori, I read the same article you did. In fact, I think I may have sent it to you. It is expected to hit $33.9 billion.
Lori Paikin: Megan, thanks for pointing that out. I guess you did send it to me. Consumer spending is expected to increase at a higher rate than even Amazon's spending, plus 29% versus Amazon's increase, which was 25%, and this is good news for marketers. And technology aside, kids continue to grow and outgrow their clothes regardless of where they're attending school. When I was a kid back in the old days, I got new clothes two times a year, and back to school was one of those times. Holiday was and is the biggest season of the year, but back to school is the second largest season and, from a time period, the longest, starting after July 4th and running through Labor Day. So as our marketing expert, what do you think are the top one, two or three things an advertiser needs to think about this back-to-school season?
Megan Rainey: I think number one, as with most marketing during this time, continue to be empathetic in your messaging. It's confusing enough for children and parents, and everyone is under a lot of pressure. I've been seeing some pretty funny commercials pop back up lately and it's been very refreshing. One example is an online shopping app Klarna. They've been airing these commercials made of old Swedish movie clips, and it's so shocking and funny and surprising and it makes me laugh every time, and we all really need that right now. So I'd say advertising was pretty heavy for a while there, but empathy and humor will go far. Second, as you said, kids are still growing and they need more clothes for the year ahead. Even though this school year may look differently, their basic needs are still there. They need clothes, meals, shoes, pencils, Kleenex. They may bring an apple for mom and dad, but the rest will likely look the same, so prepare your inventory accordingly.
Lori Paikin: I am so glad that you mentioned mom and dad. It's important to remember the parents. Making it easy for parents to buy online and pick up and return in store is key. I read an article that I know you didn't give me. It was a back-to-school survey conducted by Deloitte. In it, I read 47% of parents surveyed said they prefer to purchase from those retailers that offer an option to buy online and return to store, and more than 50% said safety was important when shopping. So investing in things like making your website easy for online transacting, investing in the ability to buy online and pick up in store or with curbside pickup, and allowing for in-store returns of online purchases are so important. Providing an in-store experience that allows for social distancing and contactless delivery are also important. Retailers need to focus on putting parents at ease by offering safe ways to purchase.
Megan Rainey: Yes, I completely agree. Back to school has also been traditionally a time when sales resonate with consumers. I read the same Deloitte survey.
Lori Paikin: Of course you did.
Megan Rainey: 82% of consumers indicated that price is a big consideration in back-to-school purchases. So the third thing advertisers need to think about is pricing. Many consumers are dealing with economic uncertainty and sales, competitive pricing, and even price matching are going to be important.
Lori Paikin: Yeah, and let's not forget marketers are also dealing with economic uncertainty. Ad spending has been cut for so many, so it's so important to maximize the return you get on every dollar spent. Are there places where you can leverage previous investments and drive sales? Site traffic is a big one. Advertisers are investing so much to drive site traffic to their websites. Are they doing everything possible to convert that traffic to sales? Megan, what do you think about timing? It's already July 22nd. Is it too late for advertisers to make an impact with their marketing?
Megan Rainey: No, it is not too late. As you said earlier, this is the longest buying season. We have 68% of consumers are still purchasing for back-to-school in the first two weeks of August, 38% are still purchasing for back to school in the last two weeks of August, and 12% are still purchasing for back to school in September. So while nearly 40% of parents have already started shopping approximately four to six weeks before school starts, about 25% of consumers have been holding off, especially as start dates for schools remain uncertain.
Lori Paikin: Okay, yeah. Great points. Thanks for sharing all of those great insights, Megan. Any final thoughts as we wrap up?
Megan Rainey: Well, thank you for having me on, but yeah, I would just say as parents and being married to an educator at the end of the day, my husband and I are just going into this school year with the big F-word top of mind. Flexible. That one. We need to prepare for a school and a schedule that can change month by month, and our children have to be the priority, so we believe in letting data and science provide guidelines to those who make the ultimate decision related to going back to school. We'll continue to do our research and make decisions for what's best for our kids and community as we go. When do we move into 2021? Are we there yet?
Lori Paikin: It can't come soon enough, right?
Lori Paikin: So with that, that will do it for this episode of Two Gals And Some Data. Thanks to Megan for joining me today. If you want to read more from us, check us out at navistone.com/blog, and if you enjoyed today's show, head over to iTunes and leave us a five-star review. Thank you for listening.