Welcome to Commerce Corner!
Michael Carney and Amanda break down back-to-school spending trends: the NRF expects 13% growth in back-to-school and 27% in back-to-college spending. They tell brands to uncap budgets, lower ROAS targets to capture demand, and lean into video and vertical creative.
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Welcome back everyone to season two. We have an official name for this special Share Out Commerce Corner. Amanda, how are you doing today?
I'm great. Michael, how are you doing?
I am powering through. I know, Amanda. We started this little project last year. We got a ton of positive feedback. So we wanted to come back with season two. I can't believe it's already midway through August and we're going to get ready into September and the holidays. So we thought no better time to come together and start sharing out some interesting learnings going into the holiday, Labor Day, all that good stuff to kick us off.
Absolutely. And I think what better time in mid August than to talk about back to school shopping. So Michael, fun stat to share with you, but the NRF just released a report that says back to school spending is up almost 13% year over year among consumers. And back to college spending is up almost 30% year over year, 27% to be be exact. Isn't that crazy?
That is crazy, Amanda. Oh my gosh. Like I, I, I think those are such interesting points too because you would think, right, that there might be a pullback. But like when we were even discussing like we're seeing the opposite trend.
Absolutely. I feel like over the last few months and speaking with each other, watching the news every day and speaking with our partners, there's so much swirl that we we're headed towards a recession. The economy is pulling back where we really haven't seen it. We haven't seen that impact on consumer spending either. I think there has been a bit of a roller coaster since 2020, obviously getting all the way to 2023 with the pandemic and its effects on the economy. But back to college spending is actually one of the few categories that's nearly doubled in its demand since 2019.
Wow. Well, Amanda, I guess my next question is should we get like a time machine and try to go back to college? I mean, I know you just got your mba, so you are more in that mindset and have such great nuggets just from your time over the past year.
I'd say, yeah, thank you. I would say let's go back to undergrad. I'm going to pass on another grad school degree for now. But yeah, I mean, I love back to school shopping. I'll be sad to not partake in it this year. But you never know what you need.
You never know. Well, I would say there are three things, right. That we've been looking at to really kind of capitalize and continue this momentum. We whether you're an early stage consumer brand, a startup, a disruptor, all the way to a traditional kind of heritage brand that's been in the market for quite some time. I'd say first thing always. We talk a lot about just ensuring that you're capturing that demand through budgets and you're not capped, especially throughout any relevant Labor Day sales going into that weekend and throughout just the back to school period. Especially if you're offering any sort of promo deal throughout this time. If folks that have seen this and watched last season's, you know, episodes. Amanda, we talked a lot about promos and just discounts and stuff. So I feel like you and I are, are ready for the promos this year and we're going to be like really leaning in heavily on like what promos we, you know, can shop for and get each other too, even for some, some gift sharing ideas, right?
Absolutely. And I think one piece that I would bring back into this is not only capturing the seasonality for the weekend, but there's a big misconception that we should pull back for that little bit of a lull at the end of September, early October before we get into cyber weekend. But that is not the case anymore either. You'll see this on a future episode. But consumer spending pretty much from Labor Day through the end of the year is not going to slow down. So absolutely reconsider some of your unit economics. Think about lowering your roas during certain periods from now through the end of the year to capture more demand or as much demand as possible. We know that when you have a non seasonal period that could be the time for you to tighten back up. But we constantly hear feedback, I would even say from brands and partners where they missed an opportunity because they were too conservative or they couldn't anticipate that demand. The demand is there. The NRF has posted about it. There's other stats on back to school and college shopping. And you know, I know that there are friends and family members of mine that are already back and so they're still doing their shopping as they're moving in 100%.
I think to, to really, you know, couple that with just budgets and so on too. Just ensuring that you're, you're really maximizing your roas. What does that look like? Right. That could be potentially like even lowering your ROAS targets to just capture as much demand as possible. Right. You can make up for that additional profitability during off peak seasonal periods. We know profitability is super top of mind and with these seasonal moments we get a lot of questions on how can I, you know, make up for that if I'm, you know, lowering my ROAS bids? So. So we think that's just a great strategy to really pack in and pair with the budget side.
Absolutely. And because we always have to say it and it's one of our favorite channels, if you have video creative, if you're running vertical assets, get them uploaded organically, tell your brand story, tell consumers that you have products that are fitting their needs. They are searching for these products. They are ready to buy. And there is really an opportunity for you to get in front of new consumers when it comes to customizing any of those back to school audiences. So here we go. Mid August and we're already talking about holiday, but it's not going to slow down from here.
Oh, my gosh, it's going to. It's going to just be picking up so quickly now. But yeah, those are three quick facts and just some things that you can take advantage of knowing as we go into back to school and Labor Day and such. But Amanda is so excited to be on this journey with you again. For season two, we got an official name now we're going to be, you know, experimenting with some different video formats just like our partners are too. So we'll get to really be kind of in the trenches with our, with the brands that we love working with as we move forward. And gosh, go into September now. So super excited all, and thank you so much for listening and watching the first episode for us and be prepared for more insights as we go into the holidays.
Happy soon.
