The end of the summer is usually a high point for retailers. But it’s mid-August and registers have not been ringing at their usual rate. In fact, back-to-school revenues are the lowest they’ve been in over a decade.

That spells bad news for the 2009 economy. But if there’s one thing that is becoming more important in the moving of consumer goods, it is online marketing.

Back-to-school spending is usually an early indicator of the all important holiday shopping season. And it is already looking like it’s going to be a slow Christmas.

According to a report from research company IBISWorld,
back-to-school spending is falling in nearly every category compared
with last year: clothing is down 5.4%; footwear down 4.4%;
and electronics down 1.8%. Sales of traditional school supplies
like notebooks and pencils are expected to be about the same as last
year.

Citigroup analysts predict this will be the first decline in back to school sales since they began tracking figures in 1995. And the National Retail Federation expects the average
family with school-age children to spend nearly 8% less in 2009 than they did last
year.

That makes good deals even more important. Those who are shopping are putting more legwork into their spending. According to Google, searches for coupons are up 40% over last year, while buy-one-get-one-free searches have jumped 30%.

When times are tight, online marketing gets even more useful. According to The New York Times:

With consumers in such a penurious mood this year, retailers are
learning that they can skip aggressive online marketing only at their
peril. Joanne Fraembs, a mother of two in Wantagh, N.Y., put it: “I
don’t go into stores that don’t send the e-mails.”

And the numbers seem to support that. According to comScore, online marketing is having as much effect on sales of consumer packaged goods as television advertising.

A study conducted with dunnhumbyUSA found that over 12 weeks, online ad campaigns with an average
reach of 40% of their target segment grew retail
sales of the advertised brands by an average of 9%, compared to an average lift of 8% for TV advertising.

comScore chairman Gian Fulgoni said in a statement: “It is likely that the more precise targeting ability of the Internet –
especially in terms of accurately reaching the desired demographic
segment — is a key reason for its effectiveness. That is meaningful in
and of itself, but when you take into account the fact that online
advertising is generally less costly than television, these results
take on even greater significance.

Image: Avolore