Most of the talk about the upcoming school year is understandably centered on whether school buildings and college campuses will reopen – even partially – or will kids start the new year as they ended the last – learning remotely at home.
But that uncertainty has implications beyond what learning will look like.
This is normally back-to-school shopping season. But what does that look like if you don’t know whether your kid is going to a school building or learning from home? And is this yet another potential hit for retailers already reeling from the impact of the COVID-19 pandemic?
Contributor Eileen Dallabrida examines these issues.
This year, consumers contemplating back-to-school shopping are learning the new ABCs.
Anxiety. Parents and children face the uncertainty of when school will begin and whether students will learn in-person or remotely.
Budget unknowns. Will government support for businesses and individuals impacted by the pandemic continue? Or will families need to tighten their belts?
COVID-19. Can schools control exposure to the virus and ensure safety for students and staff?
The only thing that’s certain is uncertainty.
In a typical year, retailers already would be ringing up back-to-school sales in what is a crucial shopping season, second only to the winter holidays in consumer spending.
“This is uncharted territory so we’re kind of in a wait-and-see mode right now,” said Steve Chambliss, general manager of Christiana Mall. “We won’t know what the schools will be doing until early August.”
With many public school districts and independent schools holding off on plans, only about 10 percent of teachers nationwide have compiled lists of supplies, according to a survey by the National Retail Federation (NRF), a Washington, D.C.-based trade group. In Delaware, the 12,000-member teachers union is calling for a virtual return to school, saying in-person learning would be a danger to students and staff.
Parents, many of whom are struggling financially as employers continue to cut back, don’t know if they should budget for backpacks or iPads.
“By any measure, this is an unprecedented year with great uncertainty, including how students will get their education this fall whether they are in kindergarten or college,” NRF President and CEO Matthew Shay said in a statement. “Most parents don’t know whether their children will be sitting in a classroom or in front of a computer in the dining room or a combination of the two.”
The NRF is doubling down on remote learning, predicting record spending of $33.9 billion, zooming past the $26.2 billion total last year and breaking the record of $30.3 billion set in 2012.
Parents with children in elementary school through high school will spend an average of $789.49 per family, up from the previous record of $696.70. Parents of college students will spend an average of $1,059.20, according to NRF predictions.
So what’s fueling the retail juggernaut? The NRF survey found that of the parents who expect their kids will be learning from home, 72 percent anticipate buying computers, furniture and other supplies. Among the top items on the list: laptops, speakers and headphones, desks and chairs, tablets and other electronic accessories.
Katherine Leigh Grasso purchased back-to-school supplies last spring when her daughter’s teacher distributed a list to parents. She is happy to help the school but will cut back on other purchases.
“No matter what school looks like, what is purchased already goes straight to the school,” she said. “As far as clothes and supplies, we bought a fun pencil case and some sorely needed new clothes because of a growth spurt but that’s it. No new book bag or lunch bag this year.”
This year, parents are holding off on backpacks and stocking up on face coverings and hand sanitizer. While many families traditionally enjoy the ritual of going to stores and shopping for school, more purchases will occur online this year, leaping to 37 percent from 29 percent in 2019. That’s a $2 billion increase.
Analysts who predict far less robust spending note that many households already have upgraded their technology because parents have been working from home. Some families don’t need to pony up for laptops because they are being provided by school districts.
Deloitte forecasts back-to-spending will be flat year-over-year, with parents of children in grades K-12 spending about $529 per student, or a total of $28.1 billion. A survey by the personal finance site WalletHub is even less enthusiastic, with 44 percent of families saying they will spend less than last year.
“COVID-19 will affect every aspect of back-to-school shopping, from where we shop to what we buy and how much we spend. New supplies simply may not be necessary if school starts remotely, and many families are struggling financially right now,” Jill Gonzalez, WalletHub analyst, said in a statement.
In the First State, Delaware Technical College already has announced that classes will be held remotely. Most of Del Tech’s students commute, so that is unlikely to impact sales of microwaves, bedspreads and towels. University of Delaware will offer most classes online, with the exception of coursework that requires in-person activities. Dormitories, the library and other facilities will be open to students who need them, including international students. Delaware State University is committed to reopening its Dover campus.
To keep up with the changes, merchants must be able to change gears rapidly.
“Retailers that can stay nimble and react quickly to changing needs for education amid the challenges of COVID-19 will likely be the ones that will have an opportunity to appeal to shoppers this season,” said Rod Sides, Deloitte’s head of retail, wholesale and distribution.
Here are some trends to watch:
- An enhanced consumer interest in return policies. In a rapidly shifting pandemic landscape, parents are reluctant to buy merchandise they can’t take back to the store if they don’t need it.
- With fewer college freshmen furnishing dorm rooms, analysts predict slimmer profits for Staples and Bed Bath and Beyond and other stores that typically thrive in the back-to-school market. Most colleges that are planning in-person education this fall are advising students to travel light, in case campuses have to shut down again. The rule of thumb: don’t bring more than you can pack in one car.
- Expect less help in stores. The ranks of retail workers have shrunk by 1.9 million during the pandemic, according to the Bureau of Labor statistics. That includes 50 percent of workers who sell apparel. Analysts predict many of those jobs won’t be coming back as merchants look for ways to cope with the added expense of sanitizing stores and paying higher wages for front-line workers. Walmart alone is spending $428 million in a third round of bonuses to hourly workers. So far, the world’s largest retailer has spent $1.1 billion in pandemic employee rewards.
- Consumers continue to gravitate toward contact-free shopping, including ordering online, home delivery and curb-side pickup options.
For the first time, Tanger Outlets, parent of the popular Rehoboth Beach retail attraction, is offering a virtual concierge shopping service. Here’s how it works: customers list their favorite brands, colors and styles. Personal shoppers look for items that fill the bill. If the consumer likes the items, Tanger will arrange for either home delivery or curb-side pickup.