Data Highlights the Importance of Adapting to New Market Trends
These days it’s difficult to discuss anything without mentioning COVID-19. The pandemic has added an element of uncertainty to just about every facet of daily life. Case in point: with the fall semester approaching, parents and students are still unsure exactly what the upcoming school year will look like. Many schools, colleges, and universities have announced a tentative mix of e-learning and in-classroom teaching, which has changed the demand for back-to-school supplies. The good news is data shows that suppliers are primed for a successful third and fourth quarter – so long as they make a few calculated adjustments.
The National Retail Federation recently released its Annual 2020 Back-to-School Spending Survey, which examines how American families plan to shop for clothing, supplies, and other items for the new school year. Conducted by Prosper Insights & Analytics, the study revealed that – despite a struggling economy – back-to-school spending is expected to total $33.9 billion, up from $26.2 billion last year and even breaking the 2012 record of $30.3 billion.
Not only do consumers plan to spend more on back-to-school supplies this year, but where they plan to shop has changed as well. A separate study commissioned by PayPal and conducted by Netfluential found that nearly 75% of college students will buy their school supplies online. Plus, with the likelihood of e-learning and school pods looking more like reality, the most-sought items are also different from previous semesters. According to the study, 59% of parents and college students intend to spend more on remote learning and tech goods than last year, while 81% plan to spend more on personal protective equipment.
As an e-commerce channel management agency that helps businesses succeed on digital marketplaces like Amazon, Channel Key can confirm that some of our clients are experiencing changes that reflect these market trends. For example, one of our clients provides wholesale back-to-school supplies. Their top-selling product on Amazon has suffered a significant drop in traffic and conversions. To supplement this lost revenue, the company shifted its focus to provide safety supplies for students who will be reentering the classroom this fall.
Channel key subsequently adjusted the brand’s marketing and advertising strategy to capture the increase in search traffic for these items. Despite the dip in sales of their most popular products, our client saw an 8% YoY increase in total Amazon sales for July. This is not to suggest that promoting personal protective equipment is a fail-safe approach for back-to-school suppliers in a COVID-19 era, but it does underscore the importance of adapting to a changing market.
One of the best ways to adapt is not only to identify new opportunities to meet demands but also missed opportunities. Utilizing proprietary technology, Channel Key routinely conducts internal studies to identify what shoppers are searching for on the Amazon marketplace. Recently we noticed that a client was experiencing heavy search traffic for several series of educational books. Unfortunately, it was not converting to sales. After a careful analysis, we proposed an aggressive two-pronged strategy designed to better present the value of the books through enhanced content and increase conversions by improving the quality of the search traffic with new Sponsored Ads. After only four weeks, this adjustment increased the June conversion rate for our client’s listings from .95% (with 2,311 sessions) to 1.35% (3,254 sessions), resulting in a 160% MoM sales increase from June to July.
There’s no denying that COVID-19 is changing the way we live. The shift in consumer shopping habits for the 2020-2021 school year is just the latest example. From a business perspective, this isn’t necessarily bad news. Regardless of how long the pandemic lasts, life will continue – just differently. Students still need school supplies, but what they need and how they get them is changing. This trend applies to not only the back-to-school industry but many others as well. As an e-commerce agency, two of the most valuable services Channel Key provides for our clients in these uncertain times is: 1) helping to anticipate and identify new shifts in consumer trends, and 2) developing effective channel management strategies to help brands adapt successfully. To learn more about how Channel Key can help your business lead your specific market, rather than chase it, contact us today for a free consultation.
Ryan Faist is the Corporate Marketing Content Manager for Channel Key. As an accomplished marketing professional, journalist, copywriter, graphic designer and problem-solver with experience on both sides of the media, Ryan is passionate about discovering creative, effective ways to help businesses exceed their marketing and communication goals.