Consumers — especially women — are ready and willing to spend this back-to-school season, they are just holding out for bigger deals, according to IBM’s third-quarter spending forecast.
“Consumers are ready to shop,” insists Jill Puleri, global retail leader for IBM Global Business Services. She expects shoppers to buy the things they need now, and then earmark other products for purchase later in the season when they expect they will get them on the cheap.
“Consumers have been trained to wait for better deals later in the season,” she said. But if IBM’s forecast holds true, buy they will.
IBM is expecting to see a 9.2 percent increase in sales of women’s clothing in the third-quarter, as women release some of the pent-up demand that has been building. Sales of men’s apparel had been strong earlier in the year, but now that the men have replenished their closets, it’s time for women to take a turn.
In fact, IBM expects men’s clothing sales to drop 6.7 percent in the third quarter compared to the prior year. But that is the only dim spot in the forecast. Gains are expected in sales of children’s clothing and footwear, of 6.2 percent and 5.2 percent, respectively. After all, children’s clothing must be replaced each year as they outgrow it.
IBM’s forecast is reinforced by a study the company conducted of social media chatter. During the second-quarter, as retail sales slowed and worries about the economy grew, consumers started discussing sales promotions more frequently on Twitter, message boards and blogs, and they often weren’t pleased with what they were seeing.
IBM analyzed 236,804 mentions between mid-April and mid-July and compared them to the same period a year ago. During the latest period, the number of posts that mentioned promotions such as coupons or sales doubled.
“The theme was what’s out there isn’t good enough,” Puleri said. “Consumers were seeing discounts of 15 percent when they were used to 25 percent to 35 percent. Everyone was saying ‘I’m going to hold out.’”
Based on this feedback, Puleri said it will likely take even better promotions and deeper discounts to lure shoppers into the store to buy. She also thinks retailers can’t go wrong by offering shoppers promotions that are targeted and personal.
“Don’t send me a promotion for youth apparel when I don’t have young kids in the house,” she said.
On the flipside, consumers seemed to be pleased with the types of products in the store, with positive sentiment rising by 54 percent.
The social media chatter also offers up some fashion advice: Leather goods, leggings and skinny tights are must-have items for the fall.