With the back-to-school (BTS) season in full swing, retailers need to make sure they have a plan for appealing to back-to-college (BTC) shoppers. In 2018, back-to-college spend was estimated at $55.3 billion (average family spend of $942), larger than K-12 spend of $27.5 billion (average family spend of $687). Targeting back-to-college shoppers provides retailers the opportunity to tap into a larger spending stream and explore additional services that can create longer-term relationships.
How can retailers better tailor to college students?
Back-to-college spend is larger and the channels are more fragmented than K-12 back-to-school spend. To succeed in this landscape, retailers should consider three value-add services to cater specifically to college families.
1. Expanding into the Dorm Room
Retailers are targeting the dorm room to not only help college students distinguish themselves, but to also build a relationship that may carry over into furnishings for future apartments and homes. If “dorm goals” are any indicator of what’s hot on campus, its clear that retailers have an opportunity to tap into a growing desire for unique and personalized spaces.
Walmart recently launched Buy the Room with complete decorating and furnishing options for five different styles, including Americana, Floral Prep, and Boho Wanderer. This release also complements other new home assortment experiences, including a 3-D Virtual Shopping Tour, which lets users browse and shop a curated space. Ikea hosted a nationwide back-to-college event on July 7th and 8th. The retailer has also curated dorm checklists and specific shoppable looks that include décor, furniture, backpacks, rugs, and storage solutions.
Amazon, in a literal expansion into the dorm room, is partnering with St. Louis University to put over 2,300 Echo Dots into dorms and residence hall rooms. Not only will the university be able to provide a new amenity to students, but students will be even more conditioned to simply ask Alexa.
2. Exploring Wrap Around Services
While the focus for BTS and BTC is on products, retailers should also explore additional value-added services to deepen the relationship with buyers, beyond product.
Dormify, an online college and dorm retailer, primarily focuses on curating dorm room collections. The company, which has grown sales almost 200% between 2015 and 2017, has had particular success with its Style Studio program, which connects buyers with stylists (in-person or over FaceTime). Interactions with real people increase the feeling of customization and personal connection. Appointments can be booked for single buyers or dual sessions intended for roommates to shop together. Revenue from styling appointments at their headquarters in New York accounted for 5-10% of overall sales.
Exploring value-add services could also include moving services, installation, systematic upgrades for products (think lease-type ownership agreements for furnishings), branded or limited availability bundles, or bundled technology packages for dorms. Brands should also look to partner to provide comprehensive packages. Launching or exploring ideas such as these could not only help retailers better understand how college students view their spaces as reflections of themselves, but also provide recurring touchpoints that can be valuable to both customer and retailer.
3. Relationship through Discounting
The back to college season is an opportunity for retailers to deepen relationships with students, rather than with mom and dad. A real challenge with college students is budget and access to disposable income. Retailers are recognizing this and seeking to offer discounts that will endear students, with the hope those transactions become routine. For example, Amazon offers students free six-months of Prime membership and Target is offering students 15% off their order when they use the retailer’s college order pickup service (allows students to buy online and pickup their products at the store). Membership models or models that make college students feel they are invested in the retailer can lead to recurring revenue streams and a population of buyers who are open to a retailer’s message.
College is a pivotal moment for young adults, but it is also a pivotal moment for retailers hoping to establish loyal customers for years to come. A retailers’ ability to understand, empathize, and design solutions that improve the buying experience may lay the foundation for a long buying relationship. Nonetheless, BTC should be considered a long-term investment in the customers of the future in additional to traditional back-to-school tactics.