All eyes are on back-to-school sales figures and the soon-to-be-released August same store sales numbers that will report those back-to-school results. If the back-to-school consuming season is considered to be a reliable predictor of the Christmas holiday shopping season, then how can we predict that this year's retail Christmas is going to go?
The answer depends on how you interpret things.
A recent National Retail Federation (NRF) survey found that more than 40% of back-to-school shopping was completed by the second week in August, and that families did their shopping early because of coupons, sales, or promotions. So, does that mean the shopping cart is half empty or half full? Bulls see spending. Bears see the same old highly competitive promotional environment that eats into profits.
The interesting thing is that even though many aspects of the U.S. economic situation are supposedly "up" compared to the 2009 mid-recession back-to-school season, the number of back-to-school consumers in 2010 who looked for back-to-school bargains and coupons was also up. This year 17% of people looked for back-to-school discounts and coupons to motivate their spending. That's up from the 14.7% of discount sales shoppers last year.
So, rather than spending more freely in this year's back-to-school season as the NRF predicted in its Back-to-School Intentions and Actions Survey, consumers seem to be getting even more price sensitive. Even though Ben Bernanke announced that the recession was over just about a year ago, he forgot to send a copy of that memo to U.S. consumers. They're bargain hunting more than ever, which bodes well for dollar and discount stores this Christmas holiday season, but not necessarily for the entire U.S. retail industry overall.
While most U.S. retail chains have been focused on luring back-to-school shoppers in the stores with back-to-school season promotions, one retail chain wins the prize for winning the attention of back-to-school consumers without heavy advertising of deep discounts. Kohl's (KSS) has created considerable buzz for itself on Facebook and in the news with its "Kohl's Cares" school contest. By the time the Kohl's Cares promotion is completed this Friday, twenty schools somewhere in the U.S. will each be ready to cash their $500,000 checks and turn their educational wish lists into shopping lists, thanks to Kohl's.
Here's what other members of the U.S. retail industry can learn from the Kohl's Cares promotion. If you ever want to flip the switch on a viral marketing campaign, just hold a big bag of money out in front of a group of people who are stuck in a chronic state of not-enoughness. Here's just a sampling of what schools are doing to get their Kohl's Cares voting campaign (and the Kohl's name, by association) to go viral:
- A Jewish Chabad school in North Carolina enlisted 50 teenage alumni to bring their laptops to the school and participate in a vote-a-thon. One-by-one these cyber campaigners contacted all their online friends and asked them to vote. By the end of the teen-run vote-a-thon, the Chabad school had 45,000 votes, and Kohl's gained as many as 9,000 new Facebook fans.
- Since there is only a small built-in network of 276 students at Lucas Christian Academy in Plano, TX, students and supporters are reaching out to the community by setting up laptops outside of supermarkets, colleges and churches to get votes for their school, and new Facebook fans for Kohl's. Lucas Christian also reportedly formed a survivor-esque alliance with two other Christian Schools to share votes. And if that isn't enough, how about a little voting bribery? A vote for Lucas Christian Academy will also get you a chance to win a free iPad.
- Principles and staff from three schools in Racine, WI are camping out on the roof of one school to raise awareness and gain (sympathy?) votes.
- A couple of schools may actually win with a straight and simple sympathy angle. A Seventh-day Adventist high school in Bozeman Montana is the little-school-that-could with only 75 students. Another school in San Jose, CA sustained $10 million in damage last month and will use the money to replace teachers' supplies that their insurance policy doesn't cover.
- Two schools in Ely, MN have enlisted the help of a Facebook fan page dedicated to two bears. This, apparently, is an extremely active group of 111,000 bear fans who just helped the North American Bear Center win $100,000 in a similar online popularity contest. The Ely schools hope to rally the bear lovers successfully to create another social media voting victory.
Campers and fires and bears - oh my! The free publicity that Kohl's is getting in both the traditional media and online is as generous as the prizes they are giving away. Funny how that works, eh?
So, why is Kohl's taking $10 million which could be used to advertise its Back-to-School Stock Up Sale and giving it away in this type of promotion? Obviously there's the goodwill factor which Kohl's hopes will earn them some customer loyalty and goodwill spending in the educational community, whether their favorite school wins or not. Certainly it's nice to pick up a few hundred thousand new Facebook fans, who Kohl's can send marketing messages to for a long time to come.
Perhaps, though, its just as simple as this... Kohl's has made the effort be a socially responsible retail operation and a friend to education because it can. Kohl's is cash rich. The Kohl's chain has more cash equivalents on hand than any other department store chain, and it was that way all throughout the recession. When you're not mired down in debt, you can afford to be generous, and you also have the freedom to run a campaign with a focus that is completely different from the desperation discount marketing of your competitors.
Does Kohl's really care? There are at least 22 groups of people who don't care if Kohl's really cares - the twenty schools that win half a million dollars each, and the Facebook customer acquisition team. Those groups are the big surprise winners of the 2010 back-to-school shopping season.
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If you have yet to see recent presentation, titled Re-igniting America, you should. It includes The ANIMUS Plan a.k.a. 2011 – U.S. Jobs Creation Plan.
(Full disclosure: I created a Facebook group that is intended for discussion of issues people had with the Kohl’s Cares contest. It’s linked as my website.)
Goodwill, being socially responsible, and being a friend to education are all good goals – but the “Kohl’s Cares” contest was a half-hearted approach to them at best. Many if not most of the top 20 schools at the end of the contest were schools with communities wealthy enough to participate in the bribery you mentioned above, with raffles of big-ticket items like iPads, laptops, and gift cards. How are inner-city or rural schools with poverty-level populations supposed to compete with that? Not to mention the paid vote-gatherers employed by other top schools…
Kohl’s could have easily met all 3 goals by distributing charity without involving a popularity contest (perhaps on a basis of need?), by reducing its top prizes and giving to many more schools, and by putting together a clear package of rules instead of the skeletal set they started with and the mish-mash of ambiguous statements they made during the contest. Instead, they created a monstrosity that inspired some truly awful behavior in pursuit of a colossal prize, and left schools that relied on hard work and getting out the vote in the dust.
I don’t imagine this will end with a lot of “goodwill” – I know I’m not feeling any, at least.
KohlsWatcher is totally off base. Socialism doesn’t work. Kohls is in the true business world and got that. It unleashed competition. The result was an explosion of over 2.5 million new Kohl’s facebook fans. It was a brilliant plan.
As to the argument that poor and inner city schools didn’t have a chance- that’s hogwash. The schools that won were anything but rich and many in poor inner city or rural areas. They did have one thing in common- they had a desire to win and tried very hard and got smarter and smarter and thus more and more votes as the contest went on. That’s how competition works.
The Kohls contest understood competition and it netted them 2.7 million total facebook fans. Yes, there are some complainers, but the number is very, very small, and that always happens amongst the losers. The Kohl’s approach was brilliant marketing.
I will be honest. I was afraid to complain because of retaliation. Until they announced the winners I did not want to put my school in jeopardy by complaining. My school in the end did win, but only because another was disqualified. The raffles, the ipads,ipods,VISA gift cards, the vote buying from other countries, the backing of the Chabad for the jewish schools, the employing of vote getters all of this takes money. We did none of these things which shows it was necessary in order to win. You have to wonder how many other schools would of won this had the other school not enlisted this from of cheating and manipulations. I will say this even though we won, I will no longer be shopping at Kohl’s. I clicked UNLIKE today.
Nice try, LoveTheFreeMarket. Plenty of misinformation in your post.
Kohl’s got 1.8 million “new fans,” not the number that you quote – many of which I suspect clicked “Unlike” or deleted their Facebook accounts immediately after the competition was over.
Is “smarter and smarter” how you describe using unethical methods to compete? I don’t know that any of them GOT “smarter and smarter” – quite a few of the raffle-runners, paid-vote-gatherer, schools, and even the individuals that were doing vote-buying, started doing it early on – from day one in some cases.
The only way small, public schools could compete was by adopting the same unethical methods, and/or by already having a major media presence, e.g. due to a natural disaster. Hard to see where “smarter and smarter” comes into that – but maybe that’s a good thing.
Kohl’s “brilliant marketing” is leading to a backlash – schools that played fair and didn’t win, as well as at least one school that was disqualified, are already starting to raise a stink. Here’s hoping that the issues arising from this contest will help corporations do charity better (and not “smarter,” by your definition) in the future.