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Ed Market Q2: A Bump in the Comeback Road

Rethinking Trump Administration Impact

Jul 31, 2017

By Bob Stimolo

Results are in from our 2017 second quarter survey of school marketers and they show a slow rate of growth.  Overall second quarter 2017 sales were up +1% from last year.  This follows a Q1 2017 that was reported up +3%. The school market appears to be experiencing a slower course of growth.

School marketers forecast Q3 2017 sales to bounce back to +3% over last year and expect FY 2017 sales will be up by +4%.

Half (50%) of school marketers cited a change in the overall economy as the main reason for sales performance.  Some 44% cited changes in school funding levels.  Thirty-nine percent said marketing strategies mainly drove sales performance, and 31% said sales performance was the result of new product development.  These numbers are consistent with the responses to this question in the Q1 survey.

Two thirds (66%) of the respondents say they plan no change to their promotion and advertising budgets in response to current economic conditions.  Twenty-six percent said they plan to increase their promotion and advertising budget by an average of +11%.

Fifty-two percent of survey respondents expect to see an improvement in economic conditions before the end of the 2017 -18 school year.

School marketing executives have changed their thinking regarding whether the Trump administration will improve sales for education marketers.  When asked, “Do you think the Trump administration will improve sales for ed marketers?” here’s how they responded in the Q1 vs Q2 survey:

                                Q1 Response       Q2 Response

            Yes                     40%                     17%

            No                       33%                     36%

            Not Sure              26%                     47%

 
 Primary Business

            School Supplies                       42%

            Furniture                                28%

            Publishing                               22%

            Other                                       8%

 

What is your title?

            President/Owner/General Manager         53%

            VP Marketing/Director of Marketing       22%

            Marketing Manager                               6%

            Product Manager                                  3%

            Other                                                17%

 

Which do you consider to be your primary market? (multiple responses)

            Preschools/Day Cares              22%

            Elementary Schools                 56%

            Middle Schools                        33%

            High Schools                           42%

            Colleges/Universities                14%

            School/Public Libraries               8%

            Other                                     11%

 

Relative to last year, would you say that your second quarter 2017 (April 1st through June 30th) school market sales were:

                                                Average                                       Average

                           2017      Increase/(Decrease)         2016      Increase/(Decrease)

            Up           48%                  12%                     67%                  12%

            Flat          9%                     0                       21%                    0

            Down      43%                 (11%)                    13%                  (6%)

 

Overall Q2 Sales +1%

 

To what reason(s) do you attribute this performance?  (multiple responses)

            Overall Economy                                  50%

            Change in School Funding Levels          44%

            Marketing Strategies                             39%

            New Product Development                    31%

            Competition from Amazon.com             14%

            Growth of Technology in Schools          11%

            Common Core                                        8%

            Education Reform                                  6%

 

Relative to last year, would you say that your second quarter year-to-date 2017 school market sales were:

                                                Average                                       Average

                           2017      Increase/(Decrease)         2016      Increase/(Decrease)

            Up           64%                  11%                     71%                  12%

            Flat          6%                     0                       19%                    0

            Down      31%                 (11%)                    10%                  (5%)

 

Overall Q2 YTD Sales +4%

 

Are you changing your promotion and advertising budget in response to current economic conditions?

                                                                Average (Cut)/Increase

            Cutting Budget                  8%                    (30%)

            No Change                      66%                       0

            Increasing Budget            26%                     11%

 

Relative to the third quarter of 2016, what are you forecasting for the third quarter of 2017 (July 1st through September 30th)?

                                                Average                                       Average

                           2017      Increase/(Decrease)         2016      Increase/(Decrease)

            Up           67%                   8%                     75%                   9%

            Flat         14%                    0                       21%                    0

            Down      19%                 (11%)                     5%                 (14%)

 

Overall Q3 2017 Forecast +3%

 

Do you expect economic conditions to improve before the end of the calendar year?

            Modest Improvement                44%

            No Change                               31%

            Modest Decline                        14%

            Major Improvement                     8%

            Major Decline                             3%

 

Relative to full year 2016, what are you forecasting for full year 2017?

                                                Average                                       Average

                           2017      Increase/(Decrease)         2016      Increase/(Decrease)

            Up           71%                   9%                     83%                  11%

            Flat          6%                     0                       12%                    0

            Down      22%                 (13%)                     5%                  (9%)

 

Overall FY2017 Forecast +4%.

 

Do you think the Trump administration will improve sales for education marketers?

            Not sure                                   47%

            No                                           36%

            Yes                                          17%

 

Federal and state funding have a significant impact on my sales:

            Strongly Agree                         53%

            Somewhat Agree                      39%

            Neither Agree nor Disagree         6%

            Somewhat Disagree                    3%

 

My products must meet Common Core State Standards:

            Neither Agree nor Disagree        28%

            Somewhat Agree                      25%

            Strongly Agree                         17%

            Strongly Disagree                     17%

            Somewhat Disagree                  14%

 

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