Back to School 2020: How the Pandemic Will Impact Retail's Second-Biggest Shopping Period August 19, 2020 BACK TO SCHOOL 2020: HOW THE PANDEMIC WILL IMPACT RETAIL'S SECOND-BIGGEST SHOPPING PERIOD
THE SIGNIFICANCE OF BACK TO SCHOOL SHOPPING
Back-to-school shopping drives major sales volume for retailers every year. In fact, profits from back-to-school shopping are second only to those from the holiday season. The back-to-school season is one of the most unique selling seasons for retailers, especially because it usually runs longer than other ‘boosted sales’ periods.
Parents may research prices, products, and promotional offers as early as July and while some shoppers will make their purchasing decisions by the end of August, other shoppers may complete their purchases during September. Overall, the back-to-school shopping season gives retailers a larger window for potential sales compared to other popular shopping dates, such as Black Friday or even Christmas.
This year, the unprecedented circumstances arising from the COVID-19 pandemic leave many parents expecting their students to continue at-home learning this fall rather than returning to school. However, the National Retail Federation is actually forecasting a record year for back-to-school sales and 2020 back-to-school shopping is expected to set the tone for the year-end season.
BACK TO SCHOOL CONSUMER BEHAVIORS
68% of back-to-school shoppers who participated in the NRF’s 2020 back-to-school survey stated that they plan to start shopping at least three weeks before school begins, but over the last decade, back-to-school spending has been pushed closer to school’s start as parents wait for more savings and last-minute adjustments. This year, cancellation possibilities are expected to further delay back-to-school purchases.
Consumers surveyed indicated they had finished only 17% of their shopping on average by early July. Among those with most of their shopping left to do, 54% said it was because they did not yet know what supplies they would need. Only 10% had received lists of required school supplies.
Despite this hurdle, annual back-to-school spending is projected to increase this year. 72% of surveyed consumers indicated they would likely need to buy items like computers, home furnishings, or other supplies to accommodate home learning. The survey found 36% expect to buy laptops, 22% computer speakers/headphones, 21% other accessories such as a mouse or flash drive, and 17% printers. In addition, 17% plan to buy non-computer items including calculators, furniture like a desk or chair, and workbooks.
According to research by the NRF, families with children attending K-12 have spent between $600-$700 dollars on back to school shopping each year since 2015. This year, expected spending is forecast at an average $789.49 per family and total back-to-school spending is expected to total $33.9 billion, up from $26.2 billion last year and breaking the record of $30.3 billion set in 2012. Similarly, college-aged back-to-school shoppers are expected to spend a total $67.7 billion, up from $54.5 billion last year.
Cumulatively, spending for both K-12 and college shoppers is projected to reach $101.6 billion – exceeding last year’s $80.7 billion and topping the $100 billion mark for the first time.
The back-to-school season normally represents a clear transition from summer to autumn, but the onset of COVID-19 has altered conventional shopping behavior across all sectors and shifted the allocation of back-to-school budgets across product categories.
ONLINE VS. IN-STORE SHOPPING
According to Deloitte’s recent survey of 1,200 back-to-school shoppers, most shoppers are uncertain and anxious, and have fairly low satisfaction levels with the education their kids received this spring.
The majority of spending is expected to move online, either for delivery or curbside pickup, as consumers remain cautious about visiting public spaces. In fact, 51% of respondents indicated that concerns for health motivated them to visit an online-only retailer for back-to-school shopping and 57% prefer retailers that offer buy-online-pick-up-in-store or curbside pickup services. Additionally, 56% prefer retailers that offer free shipping.
RETAILERS EXPECTING NEW HIGHS
With increased demand for online and curbside services this year, many retailers are supplementing their traditional services.
Gap Inc. has reported that online sales were up more than 100% compared to last year during this time. Similarly, Macy’s Inc. stated e-commerce sales surged 80%.
Retail giant Walmart has announced its plans to leverage its acquisition of Jet, offering free shipping on orders over $35 and two-day shipping on thousands of items. The retailer also partnered with TeacherLists to let customers shop directly from the supply lists of their children’s teachers at Walmart.com and Jet.com.
Most impressively, retailers who traditionally haven’t seen much rise in sales volume from back-to-school shopping are seeing growth this year. Companies such as West Elm expect a wave of sales of desks, tables and comfy chairs for kids now that they are potentially settling into this model for the long haul.
Despite the unprecedented circumstances surrounding back-to-school sales during 2020, retailers have a unique opportunity to capitalize on new consumer needs for back-to-school shopping. To keep up with trends in the retail industry, subscribe to our newsletter or follow us on social.
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