Most major retailers cut back-to-school ad spending 20%, study finds

Dive Brief:

Most major retailers cut back their back-to-school ad spending by almost 20% in July, per study results that researcher MediaRadar shared with Marketing Dive. Amazon, Best Buy and J.C. Penney stand out for having increased their ad spending on TV, print and digital from a year earlier.
Amazon, Best Buy, Ikea, J.C. Penney, Kohl's, Macy's, Target and Walmart are the top eight retailers by estimated media spending, making up more than one-third of the retail ad market in July, per MediaRadar. Macy's and Kohl's cut their respective advertising by about 50%, bringing down the average for the top eight. Setting aside those two store chains, retailer ad spending fell only 8% from the prior year.
Among media channels, TV saw the biggest boost in ad spend among the eight major retailers with a 6% lift in July. Among the top retailers, Amazon boosted TV ad spending the most with a 44% jump, while Walmart cut TV spend the most with a 21% decrease from a year earlier.

Dive Insight:

Back-to-school media spending among the top eight retailers varied greatly by company, reflecting their respective sales results, MediaRadar's study suggests. Amazon significantly boosted its TV spending in July, which coincides with its annual Prime Day shopping event that's become the unofficial kickoff to the back-to-school season as consumers look for online deals. Eighty-four percent of retailers consider the Prime Day period the most important time for online back-to-school sales, per a study by coupon website RetailMeNot.

While Macy's reduced ad spending came during a challenging period for the department store chain, the report doesn't address whether the retailer was able to optimize its spend by shifting more of its exposure to digital, where there are typically greater cost efficiencies compared to TV and where younger consumers are spending more of their viewing time. In August, Macy's debuted a back-to-school campaign that included its first shoppable commercials on Snapchat and a video-sharing challenge on TikTok. Macy's is the exclusive sponsor of Snapchat series "The Dead Girls Detective Agency," and the brand is integrated into the show via mentions and product placements in episodes. Mobile viewers can shop back-to-school looks by interacting with non-skippable commercials.

Macy's reported a 0.3% dip in sales to $5.55 billion in the quarter ended Aug. 3 from a year earlier. The retailer blamed a "fashion miss" in key women's sportswear private brands, slowing sales of warm weather clothes and a decline in international tourism, which has the biggest effect on its Bloomingdale's stores. Kohl's saw a 2.9% decline in comparable store sales in Q2 from a year earlier, although sales improved by 1% in the final six weeks of the period as back-to-school season ramped up.

Back-to-school is the second-most important period for retailers after the winter holidays, making it a key promotional period. More than half (54%) of shoppers had planned to finish their back-to-school buying in August, with 36% saying they were waiting for the best deals and 21% saying they had spread out their budgets, per a survey by the National Retail Federation. Those delayed shopping plans likely will show up in retailers' Q3 results later this year.