Will Brick-and-Mortar Chains Survive?
While never a particularly enjoyable time for consumers, tax season has become fascinating from a marketing perspective, as do-it-yourself software brands have made an aggressive play for customers of the big brick-and-mortar chains.
Though the category has been competitive for some time, 2013 is turning into an especially nasty year. In the fight for market share, the gloves are off.
Intuit-owned TurboTax threw the first punch on Jan. 21, with TV spots featuring a ditsy fashion model and Bob the plumber, both of whom moonlight at the “tax store.” The ads don’t name a specific competitor, and yet H&R Block felt the finger in its eye and filed for an injunction, one that a Missouri district court judge ultimately denied.
An H&R Block spokesperson told Adweek: “We will continue to pursue all legal remedies available to fight…the disparagement of our tax professionals.”
Meanwhile, H&R Block fought back with “Second Look,” a series of spots featuring its own tax preparers promising to review customer returns from past years for overlooked deductions.
“H&R Block believes there is power in a tax professional sitting with a client,” its spokesperson said, noting that 60% of taxpayers still seek a person to help with their returns. “They want more than just questions answered — they want peace of mind.”
The physical stores could use some peace of mind of their own. Their market share is down to 19%, per the National Retail Federation, and more than 37% of Americans have turned to software. (TurboTax just reported a 26% increase in sales versus 2012.)
“Tax software and online tax preparation are the fastest growing choice of taxpayers,” said Intuit rep Julie Miller. “It’s a tailwind for this business.”
Don’t tell that to the folks at Jackson Hewitt Tax Service, which inked a deal to open outlets inside 2,800-plus Walmart locations. Hewitt upped its game this year by offering to file its customers’ 1040EZ forms free plus $50 off its services for anyone who defects from another preparer.
Did TurboTax’s lampooning of the tax-prep chains threaten Jackson Hewitt? “No, it did not,” said CMO Michael Williams. “Our preparers are trained professionals,” he said, rattling off a list of financial and ethics classes they must pass to qualify.
Meanwhile, in the tax-prep skirmish, even the IRS itself has climbed into the ring, offering free software for those who earn $57,000 or less.
“The industry is going through an interesting period,” said Dale Schmidt, an industry analyst with IBISWorld. Might we see the day when the human tax preparer might disappear? “Disappear is a tough word,” said Schmidt.
But one thing’s for sure, he added, “The heyday of the tax storefront is behind us.”
SOURCE: Adweek, 4/2/13