The back-to-school season is regarded as one of the important
sales season for the U.S. retailing companies just next to
Christmas holiday, and with the economy is still in a recovery
phase and the job market has just started to show improvement, it
is obvious that consumers will be extra cautious when it comes to
purchase. Total spending for back to school and college is
estimated to touch $74.9 billion according to National Retail
The data from NRF revealed that total spending on back to school
will slide marginally to $26.5 billion due to lower number of
students in households this summer. The survey also highlighted
that 25.4% of shoppers, up from 21.8% last year, are likely to
postpone their purchases for the last minute to get those extra
discounts from retailers at the cost of margins. To make the most
of the season, the retailers have geared themselves with
promotional strategies and are efficiently using the marketing
tools to alert consumers of best deals.
In an attempt to capture incremental revenue,
) is offering a 110% price match for the back-to-school season.
This is in sync with its new tagline "Make More Happen for Less."
The company will match prices of other retailers including online
giant Amazon.com Inc. (
) and will give an additional 10% off on the difference between its
price and the competitor's price. The offer is available both
online as well as in stores, and will provide Staples' customers
with the best bargain possible. In addition to 110% price match,
Staples will continue to offer weekly deals.
Staples has been battling declining revenues and shrinking
margins for some time now. Stiff competition from online giants has
seized a large share of its profits. Moreover, the secular and
cyclical headwinds in the office supplies industry have
considerably reduced the demand for big ticket items. We believe
that the company's endeavors this back-to-school season may help it
to remove the drag.
On the other hand, for
) this back-to-school season is a challenge to uplift its brand
image that was battered by massive data breach last holiday season,
when information related to credit and debit card data of
approximately 70 million customers was hacked. Apart from the
security infringement, the company's tepid entry into the Canadian
market, weak e-commerce sales and subsequent dismal quarterly
performances have put it on the back foot. Moreover, the breach has
shaken consumer confidence, resulting in lesser footfall and a
public relations nightmare for the company.
Keeping these in mind, Target has launched its back-to-school
campaign, which involves some amount of social responsibility. The
company stated that for each select up & up school supply
bought at stores from Jul 13 to Aug 2, it will donate one school
supply item to a needy student. The company through this approach
intends to contribute up to $25 million in supplies to the Kids In
This season Target assures of unbeatable prices, including
savings through Cartwheel, REDcard Rewards, and Price Match.
However, its wait-and-see story how far Target will succeed in
removing the dust from its image but its sure the company is
leaving no stone unturned to win consumer back.
Both Staples and Target currently carry a Zacks Rank #4
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
STAPLES INC (SPLS): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
AMAZON.COM INC (AMZN): Free Stock Analysis
To read this article on Zacks.com click here.