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Merchant Warehouse Uncovers Missed Opportunity for Retailers This Back-to-School Shopping Season

Survey Finds Consumers Want Loyalty Programs, but Few Offered by Retailers for Back-to-School

BOSTON, MA -- (Marketwired) -- 07/08/14 -- Back-to-school shopping is the second largest retail event of the year, only behind holiday shopping. However, businesses are failing to use loyalty programs in order to take full advantage of the $72.5 billion back-to-school shopping opportunity, according to findings from a new study, conducted in June 2014 by payment technologies leader, Merchant Warehouse. The missed back-to-school loyalty opportunity could impact retailers' sales later in the year, too, as consumers admit the stores they shop at for back-to-school items are also top-of-mind for the holiday shopping season.

Merchant Warehouse surveyed more than more than 100 small business owners and managers that sell "back-to-school" items and more than 700 back-to-school shoppers in June 2014. While 85 percent of shoppers noted that they tend to shop at the same retailers year after year for back-to-school, an overwhelming 91 percent noted they are "somewhat likely" (65 percent) or "very likely" (26 percent) to switch their choice of retailer if a promotion or reward applies. Meanwhile, only 34 percent of retailers plan to run loyalty programs for back-to-school shopping this year.

During Back-to-School, Lower Prices Win Consumer Loyalty
Most shoppers surveyed reported they buy items at the same retailers during both the back-to-school and holiday shopping seasons, with 58 percent shopping at a majority (60-100 percent) of the same stores for both. Shoppers indicated that price is more important to them during the back-to-school season when compared with other times of year; 53 percent of consumers list it as their biggest determining factor in where to shop and 66 percent said they are likely to sign up for a retailer's loyalty program during back-to-school shopping if offered a discount at the checkout. In fact, consumers look for these incentives, as 45 percent stated they're more driven to shop at a retailer based on their sales, discounts, or promotions during the back-to-school shopping season versus other times of the year.

Retailers Recognize Back-to-School Loyalty Opportunity, but Fail to Capitalize
A majority, 58 percent, of retailers surveyed believe loyalty campaigns would benefit their business during the back-to-school season, although only 34 percent plan to run a program this year. In fact, 97 percent of retailers that ran back-to-school loyalty campaigns last year had positive experiences and plan to run one again this year. So why are others missing out on this opportunity? The most common reason reported was that loyalty programs have not been beneficial to the business in the past, with 25 percent selecting this response. However, of those conducting loyalty campaigns this back-to-school shopping season, 65 percent are taking advantage of data-tracking and analysis (such as purchase data or demographic information) technology within loyalty programs to boost the benefit to customers specifically interested in purchasing back-to-school items.

"Small businesses are challenged with vast competition in attracting back-to-school shoppers that will directly and positively impact their bottom line," said Jenn Reichenbacher, senior director of corporate marketing, Merchant Warehouse. "It's alarming that so many small business retailers are missing out on valuable loyalty programs that can help them keep existing customers coming back throughout the year and even year after year. Consumers have said that they're willing to be loyal to businesses year-round based on the business' back-to-school offering, presenting a key opportunity for small business owners and managers to employ loyalty programs this year to keep customers coming back through the holiday season and next year as well."

Other Key Findings Include:

  • Technology is not holding retailers back: 18 percent of businesses surveyed report they will not run a loyalty campaign during this back-to-school season because their business lacks the required technology resources.
  • Most retailers (56 percent) plan to execute loyalty campaigns over email this back-to-school shopping season.
  • Retailers are warming up to the mobile opportunity: 24 percent of retailers planning to run back-to-school shopping loyalty campaigns will implement those via a mobile app.
  • Consumers ranked plastic loyalty/rewards cards as the most preferred method of redeeming promotions or rewards and paper punch cards as the least preferred method.

For more information on Merchant Warehouse and these survey findings please visit: Business Back-to-School Survey Findings | Consumer Back-to-School Survey Findings.

About Merchant Warehouse
Merchant Warehouse is a leading provider of payment technologies and merchant services. The company's solutions enable merchants to more effectively connect and engage with their customers regardless of how, where or when they choose to shop. Merchant Warehouse's flagship technology solution, the Genius™ Customer Engagement Platform™, supports both traditional and new payment types, including mobile commerce, from a single countertop acceptance device.

Merchant Warehouse offers innovative payment solutions that help online and brick-and-mortar retailers, as well as point-of-sale (POS) developers, value-added resellers (VARs) and agents, strategically grow their business. Merchant Warehouse is one of the fastest growing payment technology companies in North America. For more information on Merchant Warehouse, visit merchantwarehouse.com.

PR Contacts
Anna Farnum or Kevin Leahy
617-945-1915
genius [at] launchsquad [dot] com

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