What will retail’s back-to-school season look like this year?

Discussion
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Jul 14, 2020
Tom Ryan

The prospects for back-to-school — retail’s second largest sales event annually — have been rendered obscure due to COVID-19 as the selling season greatly depends on how kids will begin their new school years.

According to Deloitte’s annual back-to-school surveys, 66 percent of parents of K-12 and 62 percent of parents of college age students are anxious about sending their kids back because of the pandemic.

The anxiety over the availability and safety of in-person education is seen in other polling:

  • Parents commissioned by Varsity Tutors found 43 percent do not believe their children will attend in-person classes this fall and 48 percent may not send their children even if school is open;
  • Teachers from the American Federation of Teachers asking how schools should reopen found that, among K-12 school educators, 42 percent preferred a hybrid model, 29 percent favored continuing distance learning and 21 percent chose in-person instruction.

Parents are also concerned about their kids falling behind. Only 56 percent of parents of K-12 and 52 percent of parents of college age students were satisfied with the education their kids received this spring, according to Deloitte’s findings. Finally, financial concerns loom larger as 40 percent of parents worried about making upcoming college-related payments.

Regardless, Deloitte’s survey predicted basically flat back-to-school spending for K-12 grades and a slight decline for college.

Clearer predictions from Deloitte were that online spending for back-to-school items will sharply increase as contactless purchasing methods retain their appeal. At the K-12 level, spending on technology products, driven by computers, is set to climb 28 percent as parents anticipate the possibility of remote learning and the need to supplement students’ education. Virtual learning tools as well as sanitizer and wipes are also expected to be bigger parts of back-to-school budgets.

Back-to-school spending over the last decade has been pushed closer to school’s start as kids wait to see what’s trending and parents wait for deeper savings, but last-minute adjustments and cancellation possibilities are expected to further delay back-to-school purchases this year.

Stacey Widlitz, president of SW Retail Advisors, told CNBC, “I think parents are just not going to open their wallets until they know.”

DISCUSSION QUESTIONS: What adjustments to inventories, marketing and operations may be required to best manage the uncertainty around this year’s back-to-school selling season? What are some certainties versus unknowns in how the selling season will play out?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Regardless of the plan for individual districts, there will be a big increase in AmazonBasics and other private label school supplies sales."
"As many schools go online or offer a blended in-person/online experience, technology like laptops and headphones will be in demand..."
"I just can’t see parents spending a lot of cash on new clothes for Zoom classes, but I can see them investing in optimizing the at-home learning environment."

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20 Comments on "What will retail’s back-to-school season look like this year?"


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Suresh Chaganti
BrainTrust

I am a bit more optimistic than the study is. A good chunk of school supplies are ordered through school, and we already had to place ours. Secondly schools, like in Illinois, will probably take a staggered approach – open two to three days per week for each student.

Overall I see demand staying flat for the academic year, but it will probably be uneven in next six months since school reopenings could be staggered and uneven.

Richard Hernandez
BrainTrust

I have seen a lot of empty shelves in stores like Target, Burlington, etc. I think this will be hard to pinpoint as it looks like a majority of school districts will not be ready to offer full in-school instruction and a majority of the education will be conducted online. If this is the case, will parents want to spend money on clothes and shoes, backpacks, etc. ? Is the solution to offer a limited BTS assortment in stores to minimize the potential markdowns a store would have to take?

Lee Kent
BrainTrust

I’m with you on this one Richard. Many, if not most, of the schools I am hearing about are planning, at a minimum, to stagger schedules. This means the same supplies will be needed and kids do grow and seasons do change so clothes will be in order also. I also see a bit of growth in the at-home electronics category as many families have shared devices and supplies which may not cut it any more. Retailers may certainly want to take a look at their markdown and sales schedules though because these will not likely align with the past. For my 2 cents.

Nikki Baird
BrainTrust
There are two chunks of back to school spending: K-12, and then the “off to college” spending. I now have one foot in both worlds. For my college-bound son, we went ahead and bought the dorm stuff, etc. because I was worried that if we didn’t buy it over the summer, he wouldn’t have it when he needed it. I’m not convinced he’s going to be living in a dorm fall semester, but I’m hopeful that he will for spring. So for those purchases, I didn’t wait because I didn’t want to have to scour clearance racks for Twin XL sheets. For my high school student, it appears it’s going to be a hybrid approach (at the moment). But it is totally a hedging/out-wait game. I’m not buying anything until we know for sure what the situation is going to look like, and it appears that many other families are making the same decision. I can’t imagine what school uniform purchases look like right now – if my kid’s not going into a classroom, there’s… Read more »
Michael Terpkosh
BrainTrust

Based on parent uncertainty about sending kids back to school and school district uncertainty about opening schools this fall, I expect the back-to-school selling season to be down. Plus if a parent is unemployed, their extra $600 a week unemployment money runs out at the end of July. Many retailers will be facing issues with overstock because retailer Back To School orders were placed months ago and already shipped into retail. Retailers will need to be creative to move the product out the door.

Brandon Rael
BrainTrust

Everything we considered as normal for back to school planning and the shopping season has been disrupted. The anxiety levels are at an all-time high for students, parents, and educators, as the education system scrambles to shift their operating model to one that is either a hybrid approach of in-person classes and online learning, or strictly online.

If COVID-19 cases continue to rise, we may have yet another series of exclusive e-learning classes until things stabilize. What we can say with a degree of confidence is that the home will continue to be the center of learning, working, exercising, and entertaining. Parents will be investing in laptops, improved Wi-Fi capabilities, office furniture, and other smart devices.

Without the certainty of the upcoming school year, the traditional back to school shopping for the latest fashions, shoes, and school supplies will happen, yet at far diminished levels. The situation is changing by the day.

Jeff Sward
BrainTrust

I’ve always heard the word “home office” used as a place — a noun. And I’ve heard “home school” as an action — a verb. I think “home school” has now become a place also. So what will parents need now that “home school” is both a verb and a noun? What corner of the house now needs what kind of supplies for the home school to be a welcome sanctuary for the kids to spend a big chunk of their day?

Stephen Rector
BrainTrust

I believe this depends on the categories a retailer sells. If you are a big BTS apparel store, I would be planning on things being way down. However for those stores like Target and Walmart that are also in the supplies and tech business, I can see these businesses maintaining if not growing. Here again, Walmart, Target and Amazon will be winners, while specialty/department stores will struggle.

Ron Margulis
BrainTrust

Regardless of the plan for individual districts, there will be a big increase in AmazonBasics and other private label school supplies sales. Consumers are definitely pulling back and we can expect another boost for store brands.

Mark Ryski
BrainTrust

It’s going to be a terribly mixed bag of results for this coming back-to-school season. With school openings and closing happening at the local level, it’s impossible to predict how overall demand for school supplies will be impacted. Retailers should not merely rely upon historical business activity, but instead turn to the daily store traffic and conversion trends as a guide for activity. For this back-to-school, constant monitoring and staying flexible will be key to making the most of it.

Lisa Goller
BrainTrust

Ahead of the new school year, expect more online fulfillment vs. in-store shopping, as some stores still encourage only one adult per household to enter the store. Families with school-age children also tend to be more comfortable with online shopping, especially for the benefits of health, safety, convenience and time savings.

Retailers could modestly increase their inventories compared to last year as families prepare to replicate the school experience in their homes. Back-to-school marketing has already started, as basics like pens and computer paper remain essential no matter where or how kids receive their education this fall.

One certainty is families and retailers need to be more flexible than Gumby to adapt to this year’s ambiguous selling season.

Cathy Hotka
BrainTrust

What a hot mess. Countries that safely reopened schools invested time and money in retrofitting them for safety; somehow we’re expecting good results without pre-planning. This is simply an awful year for retailers.

Gene Detroyer
BrainTrust

Let’s break “back-to-school” into three categories.

Apparel: down significantly. Don’t need the new sneakers, jeans, shirt, et al.

Supplies: Even to down. Still need some supplies no matter where I am learning. Paper, pencils, etc.

Electronics: Up. Needs? Faster Wi-Fi. Broader internet. Better computer. Tools to take advantage of the need for the best, clearest, fastest communication.

Dave Bruno
BrainTrust

It’s all a mess, to be honest. But I suspect many universities, as well as many urban and suburban school districts, will begin the school year with remote learning. I also suspect that once again “non-essential” retail categories will suffer. Only this time, non-essential refers specifically to apparel and footwear. Technology and furniture categories that optimize remote learning environments will likely soar. I just can’t see parents spending a lot of cash on new clothes for Zoom classes, but I can see them investing in optimizing the at-home learning environment. Big boxes and Amazon will likely outperform LY. Others, not so much.

Lee Peterson
BrainTrust

BTS sales have been waning in recent years anyway as consumers can buy anything at any time and aren’t so tied to the whims of merchants’ marketing. I would expect that trend to continue, especially considering the accelerating factor of COVID-19 AND the fact that many schools will be online this fall. I’d give expectations for BTS a big “meh.” Now the holiday season, that could be a different story, especially if there’s a change in November that could affect everything. Should that change happen, I’d look for holiday to be a comeback story.

Liz Adamson
BrainTrust

It is certainly going to be different this year. I do believe overall spending will be down and the product mix will be different. As many schools go online or offer a blended in-person/online experience, technology like laptops and headphones will be in demand, as will perhaps supplemental learning materials for parents who are worried their kids are falling behind. Arts and crafts or other activities kids can do at home will also be in demand as a way to give tired and working parents a break.

Phil Rubin
BrainTrust
1 month 1 day ago

It’s hard to see this BTS season being anything other than lackluster at best in areas other than technology. And the question for technology is how much of that demand has already occurred and been met through Q2. Schools are likely to be at best hybrid in terms of virtual/in-person, unemployment is staggeringly high and there is no leadership. It’s hard to see value in inventory depth other than for essentials.

Ricardo Belmar
BrainTrust

While BTS will be a good bellwether for retail sales, it’s going to be a hot mess, with a combination of last-minute shopping as many parents wait and see what their school systems and colleges end up doing for in-class vs. online vs. hybrid learning and retailers try to second-guess what mix of supplies, electronics, and everything else parents will want to buy. Overall, I expect sales to be flat compared to last year, but specific categories will outperform others. Electronics may be up, while apparel will likely be down. Typical school supplies are just as needed, no matter where learning happens, so those should be stable. What will be interesting are sales of dorm room items college-bound students typically need/want – will parents be as willing to spend on those items if they don’t know what to expect? Especially for parents concerned about their financial stability this year. That may be the most exciting segment to watch.

Craig Sundstrom
Guest

Like many, I suppose, I largely equate “back to school” with clothing, and it’s hard to imagine that not taking a nosedive (both from less money to spend and just plain lower demand … a perfect storm). As for how to manage it, I think retailers will err slightly on the side of optimism: lost sales can’t be made up, but unsold inventory can be held for a few months at least … optimism that this will be “over” — or at least greatly reduced — by spring.

Ralph Jacobson
BrainTrust

Bottom line, all kids will need the standard supplies, whether school is conducted online or in-person, so retailers need to plan accordingly — and stay close to local school schedule changes / staggered openings, etc.

wpDiscuz
Braintrust
"Regardless of the plan for individual districts, there will be a big increase in AmazonBasics and other private label school supplies sales."
"As many schools go online or offer a blended in-person/online experience, technology like laptops and headphones will be in demand..."
"I just can’t see parents spending a lot of cash on new clothes for Zoom classes, but I can see them investing in optimizing the at-home learning environment."

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