School’s out and summer is officially under way, but for retailers and manufacturers, the second largest season of the year has only just started. In the U.S. the office supplies back-to-school season accounts for 34 percent of annual retail dollar sales and 46 percent of annual unit sales.*
During the 2018 back-to-school season, the average consumer purchasing office supplies made three purchase trips. This is down 4 percent versus the same time period the previous year. This can partially be attributed to more consumers migrating online to buy supplies. Mass channel retailers are also a key contributor to this trend, especially for consumers looking to make fewer trips and save time with one-stop shopping convenience. Despite the drop in purchase trips, store sales still dominate and account for 89 percent of office supplies spend during the season.
Over the last five years, Prime Day has increasingly played a role in moving sales online early in the season. In 2019, Prime Day will run for two days, the longest duration yet. Both mass and specialty retailers are planning to participate and compete for consumers’ online share of wallet. Retailers have been experimenting with innovative solutions to improve the omni-channel shopping experience for consumers – but convenience is still king. In some instances, consumers can automatically add items from a school fulfillment list to their online carts and continue to checkout. They can then choose to have the items shipped to their home or elect to buy-online and pick-up in store, an option that accounts for 3 percent of retail purchases and is expected to increase.**
For now, e-commerce share of total retail sales in office supplies remains at 11 percent up from 9 percent in 2016. Heading into the 2019 season, the online growth rate has slowed versus prior years from 17 percent in 2017, to 11 percent in 2018*, and is now 7 percent for 2019 year-to-date sales.*** This is important to note as historically, online growth rates have helped lift total retail sales for the season. If the online growth rate remains the same during this year’s back-to-school shopping season, it will be challenging for the 2019 season to compare positively against 2018.
The in-store shopping experience offers several elements that the online experience might look to integrate. For many, back-to-school shopping can feel like a rite of passage, empowering the student to take-on the school year while shifting focus from summer to the school year ahead. From the perspective of retailers and manufacturers, an in-store shopping experience is also more likely to trigger purchases beyond a teacher’s back-to-school list, leading to impulse buys, a behavior not as easily offered online. In order to capture more market share, e-commerce must figure out how to better translate the in-store experience to online shopping.
NPD expects retail office supplies industry players to face some key challenges during the 2019 back-to-school season. Winning the season will involve creative solutions both in-store and online. Those who capture consumer spend using solution-driven merchandising, competitive pricing, coupled with the right timing by market and a seamless omni-channel shopping experience will find success. Ultimately, consumers will determine the widespread acceptance of online back-to-school shopping, but for now, the in-store experience has remained the preferred method to buy school supplies.
NPD Group, Inc./Retail Tracking Service/13WE Oct. 06, 2018
**Source: The NPD Group, Inc./Checkout E-Commerce Tracking
***Source: The NPD Group, Inc./Retail Tracking Service/21WE Jun. 01, 2019
Home Improvement Insights Summit
Date: September 24, 2019 | 2:45 p.m. – 3:15 p.m. CT
Location: Sofitel Chicago | Chicago, IL
Presentation: Planning for Growth: Understanding the Online Home Improvement Consumer
Speaker: Leen Nsouli, Executive Director, Industry Analyst – U.S. Home Improvement
Overview: The retail marketplace is still in the midst of an ongoing online shift now more rapidly than ever before. The availability and advancement in technology at retail is changing the way consumers shop and purchase. Generational shifts in lifestyles and values are also impacting the sales of retail categories. The home improvement market is anticipated to grow as generation cohorts enter key life moments. This presentation will provide an overview of the size of the home improvement market, the products driving growth and declines, channels shopped, what motivates the consumer to buy, and key behavioral factors of the DIY consumer. Members can anticipate that the content will help them identify opportunities growth, how to connect with the online consumer, and what barriers they will need to overcome in the years ahead.