Retailers Roll Out Back to School Bargains Early This Year

Heavy marketing and promotions geared toward teens, 'tweens and children during the back-to-school shopping season typically pay off handsomely for retailers. But to reap those crucial profits this year, stores will have to pull out all the stops.

"Back-to-school is an extremely important time period [for retailers], second only to holidays and in some cases more important," says Anne Brouwer, a senior partner at MacMillan Doolittle, a retail analyst firm.

Yet given higher costs for everything from groceries to fuel and a growing reluctance among consumers to spend on anything nonessential, retailers know that luring shoppers into their stores will be extremely challenging this summer. In fact, sluggish sales have already claimed several victims in the retailing industry. Discount fashion merchandiser Steve & Barry's, for example, is just the latest in a string of stores to file for bankruptcy protection. And while the government's economic stimulus checks helped to provide a temporary boost to retail sales in May and June, spending is expected to remain unseasonably slow in the months ahead. The National Retail Federation, a retail trade association, predicts that sales will grow by a meager 1.6% this year, following a less-than-stellar 2.9% rise last year.

"The consumer is struggling with gas prices and food prices," says Mike Gatti, executive director of the Retail Advertising and Marketing Association, a division of the NRF. "So retailers know customers are going to be making some choices." With that knowledge, and the hunch that some parents are holding onto their rebate checks, Gatti says retailers — especially those selling back-to-school basics like clothing, electronics and school supplies — are relying heavily on marketing gimmicks and promotions to draw shoppers in.

"Campaigns are getting interesting," says Brouwer. "It's not just TV or print advertising...it's event-driven, as well, and we're seeing more of a balance of marketing initiatives than we've seen in the last two months."

J.C. Penney, for example, is launching five new exclusive clothing brands and a new "Dorm Life" brand, which will include bedding and bath items, desks and shelving units. In total, it's the largest number of brands the store has ever launched during this season, says Kate Parkhouse, public relations manager for brands at the store. Meanwhile, office-supply chain Staples, will sell back-to-school basics such as pencils and folders for a penny in deals that will rotate every week. The store is also teaming up with Bed Bath and Beyond to offer a "Shop Smart for College4" sweepstakes. The grand prize? Two Smart Fortwo Passion Coupes (one Smart Car for the parent and one for the college-bound teen) and a total of $10,000 in gift certificates to both stores.

Electronics retailers will also figure prominently in this year's back-to-school marketing bonanza. "Technology is becoming increasingly important to the education process and it's an expenditure that most parents factor into their budget every year," says Tim Herbert, senior director of market research for the Consumer Electronics Association. Apple, for example, is giving away an iPod touch (retail price: $299) or an iPod nano (retail price: $149) to students who purchase a Mac computer before Sept. 15.

With so many promotions to lure you into spending, it's important to stay focused on savings and stick to what you really need, says Gatti. He suggests consumers stay true to their shopping lists and take advantage of Internet sales, which not only show up earlier than in stores but also tend to offer a wider selection.