Retailers expect big Back-to-School shopping numbers this year
It’s only a few weeks before 8-year-old Kai Smith heads off to third grade at St. Thomas the Apostle School in Wilmington.
His mom plans to spend at least as much as she did last year on uniforms and back-to-school supplies. But she is not in a hurry to shop.
“I’ll go to Walmart and Target because they always have lots of inventory,” she says. “I’m not in a rush because I’m not worried about stores running out of things.”
Consumers also are confident in the economy. Back-to-school sales, including goods purchased for college students, are expected to climb a robust 10.3 percent this year to $83.6 billion, says the National Retail Federation (NRF), a Washington, D.C.-based trade group. That’s the second-highest tab on record.
Further, the Conference Board, a business trade group, reports its July consumer confidence index rose to its highest level since mid-2001.
That’s especially good news for retailers as back-to-school shopping—the second largest buying event of the year—is a harbinger for what merchants can expect for the upcoming winter holidays.
Like Smith, most consumers will shop in brick-and-mortar stores, according to an NRF survey by Prosper Insights & Analytics. Back-to-school online shopping is down this year, with 45.9 percent of parents saying they will do some of their purchasing online. That’s a decline from 55.6 percent of consumers last year.
This season, 89 percent of shoppers plan to do their spending in a store, according to the International Council of Shopping Centers (ICSC).
"People still want to see and touch and interact with products," said Stephanie Cegielski, ICSC spokeswoman.
Shopping together also provides an opportunity for parents to interact with their children. While parents buying gifts for the winter holidays traditionally want their presents to be a surprise, buying for school is a collaborative process in which kids have strong voice.
“It’s something that we look forward to each year,” Smith says.
In all, more than 70 percent of last year’s back-to-school purchases were made in brick-and-mortar stores, according to The NPD Group, market research firm.
This year, many consumers will compare prices online before heading to the store. In a survey by RetailMeNot.com, a website that connects shoppers with retailers, 28 percent of back-to-school buyers said they routinely search for items online before heading to the store. More than half—54 percent—said they wind up doing the majority of their shopping in a store.
Here are other trends to watch:
- Multifunctional pieces for multitasking college students: Target is selling sheet sets that come with side pockets for phones and books. Target partnered with Casper, a mattress retailer, to make the Lounger, which converts into a comfy seat for studying or relaxation.
- School supply kits: Prepackaged collections include such standard items as pencils, erasers, folders, composition notebooks and more, offering one-stop shopping for time-parched parents.
- In an eMarketer poll of mothers of children under 18, Kohl’s was the most popular destination for school clothes. Among the enticements: $9.99 T-shirts for junior girls; $24.99 Urban Pipeline jeans for young men; and $8 Jumping Bean tops and bottoms for boy and girls.
- Click and collect: Walmart is partnering with schools, allowing districts to post required school items on the retailers’ website. Parents can buy online and pick up at the store, where a seasonal back-to-school helper will direct them to the shortest checkout line.
Staples encourages customers to upload a photo of a school supply list through the retailer’s app, fill it out and send it back. An employee will prepare the order for in-store pickup. The order is guaranteed to be ready within two days, but it typically takes much less time, about half an hour, says Christine Mallon, Staples' vice president of retail marketing.
In-store pickup is good for neighboring merchants, too, according to the RetailMeNot survey. Of those shoppers, 81 percent report they have visited other stores when picking up an online order in a shopping center.
So what’s on the shopping list? For students K-12, it includes pencils, crayons, paper, backpacks, lunch boxes, and apparel—either uniforms or street clothes—for a collective tab of $29.5 billion, the NRF says.
The cost for college students is much higher and is expected to reach $54.1 billion. That is because the shopping list for college students is longer, including computers and electronics, dorm bedding, mini-refrigerators, microwave ovens and clothes, specially branded collegiate attire. The third largest expenditure for the college set is food.
That comes down to an average of $687.72 for the family of a K-12 student, up $14 from last year, the NRF says. College students and their parents are expected to spend an average of $969.88, $82 more than last year.
So where are they shopping? A Deloitte survey found that mass merchants such as Walmart and Target are the most popular destinations, with 73 percent of parents planning to buy at those stores.
Shoppers can expect competitive prices, as well as price matching. At Staples, customers who bring in proof of a better deal will get the lower price, plus 10 percent of the difference.
Here are a few other bargains:
- Walmart’s door busters include school staples priced at less than $1. Among the deals are a college-ruled composition notebook for 97 cents; three-prong portfolios for 50 cents; and a box of 12 Cra-Z-Art colored pencils for 50 cents.
- In addition to sale prices, Office Depot is extending its popular 30-percent off promotion on purchases that total $30 or more. Enticements include a Texas Instruments color graphing calculator for $119 and an 8-ounce pump bottle of Purell hand sanitizer for $3.22.
- Kmart is selling Spider-Man backpacks with branded pencil cases for $7.69; a Ticonderoga 18-count package of sharpened pencils is $4.
- At Staples, a 4-ounce bottle of white craft glue is marked down from $1.49 to 50 cents. A box of 25 pocket folders is $5. The chain also is running a contest. The winner receives a $50,000 scholarship and a trip to see Lady Gaga in concert.
Most retailers started promoting back-to-school shoppers right after the Fourth of July holiday. And 40 percent of merchants put up back-to-school displays in May before classes even ended.
But like Smith, many parents are still waiting to pull the trigger on purchasing.
RetailMeNot forecasts that most purchases will take place in August, with Aug. 5 as the biggest shopping day. Procrastinators will have a major impact on the market. Labor Day, celebrated on Sept. 4, is predicted to be the second biggest day.