It is expected to be a good year in Retail during the back-to-school (BTS) season. The period, which is the second highest spending timeframe behind the winter holidays, is predicted to reach $75.8 billion (up from 2015’s $68 billion) according to the NRF’s annual survey of total spending for K-12 and college.
NRF’s survey, which asked 6,809 consumers about both back-to-school and back-to-college plans, found that households with children in grades K-12 plan to spend on average $673.57 on apparel and accessories, electronics, shoes and school supplies – resulting in a total of $27.3 billion more in sales than 2015. The survey also found that households with children in college plan to spend an average of $888.71. In comparison to last year, total spending during back-to-college is expected to be up at $48.5 billion.
NRF explains that brick-and-mortar stores still rank higher than online channels as to where consumers intend to buy:
Discount stores and department stores are historically the two largest shopping destinations for BTS shoppers. However this season, discount stores are expected to see a 1.7% decrease in traffic to 60.5%, while department stores are expected to see a 3.2% increase to 59.6%. Discount stores will still be the primary destination for BTS shoppers, but this is the lowest number seen for Discount stores in the NRF and Prosper survey since its inception.
Amongst the reasons why (as reported by a recent Forbes’ article) are lower gas prices, a lower unemployment rate and higher wage growth. A second piece by the same news outlet indicates that part of the projected increase is due to digital channel sales. A study concluded that overall back-to-school sales are expected to rise 3.3%, while online sales are estimated to more than triple. Finally, 60% of parents plan to use their mobile phones for part of their school shopping.
Taking those numbers into consideration, Forbes’ contributor Bryan Pearson suggests that retailers offer a seamless experience throughout mobile, eCommerce and brick-and-mortar: “Every single digital option should be considered with the mobile experience in mind, in fact, from how a backpack’s features look on a five-inch screen to the checkout process.” To that point, Deloitte’s 2016 BTS Survey found that 61% of shoppers will research online before making a purchase in a physical store.
Secondly, he points to a differentiator that is gaining increased popularity in the US this season: Buy Online and Pick Up in Store (BOPIS). This aligns well with Deloitte’s recent findings, which concluded that 40% of parents prefer to purchase from brands that offer BOPIS and 30% believe they’ll shop less in physical stores this year due to this option offering increased convenience.
One of the largest players in the BTS game, Office Depot, is offering and promoting its buy online, pick up in store service for the season. Internet Retailer reports that retailer plans to hire 8,000 summer workers for its stores during BTS.
The increase in use of online channels for BTS shopping accounts for why a major back-to-school retailer, Staples, is expected to be surpassed by Amazon in 2016. Last year, Amazon controlled 38% to Staples’ 39% piece of the pie, according to Forbes. However this year, the eCommerce Titan has played an important role in families starting to shop earlier this season - 73 % beginning mid-July, per NRF (7 weeks out from the beginning of most schools). Delloite explains that this year’s Prime Day saw an increase of 60% in sales compared to 2015. Because Prime Day fell at the start of the BTS season, and as electronics are the second largest BTS category, Prime may have contributed for the earlier start of the shopping season.
Check back in with us to understand how this 2nd largest shopping season went and key learning’s to take into the holidays.
