No matter the duration or magnitude of disruption, everything in life strives to find balance. Balance is essential for progress and future success. In 2021, the office supplies industry will recalibrate to discover a new equilibrium that meets the needs of a changing and shifting U.S. workforce and education system following a challenging year.
In 2020, retail office supplies dollars declined 1% due to declining in-store sales and a tough back-to-school season. As consumers shifted spend online, office supplies e-commerce sales grew 35% versus prior year, making up 20% of retail sales compared to 15% in 2019.* The back-to-school season, which typically accounts for 35% of annual dollar sales, was down 10% in 2020.** In Fall 2020, over 60% of students started school virtual-only, which delayed seasonal shopping of core list supplies into September and November. Additionally, the volume of supplies purchased during the delayed period did not make up for the losses during the season, as these items are tailored for daily in-person classroom attendance. Instead, in attempt to support all three models of learning (virtual, in-person, and hybrid), schools invested heavily in technology, PPE, and sanitation solutions. Education vertical spending on technology increased 36% in 2020, despite many districts facing budget and access challenges.***
The 2021 Fall back-to-school season is anticipated to post strong growth versus prior year with a higher percentage of schools expected to reopen in hybrid and in-person models. If this happens, parents and students will be expected to purchase the supplies on school lists similar to pre-pandemic years. But what teachers place on school lists this coming season may see some change to accommodate our new normal.
While about 50% of students are still attending school virtual-only and 18% are attending hybrid, a shift toward more in-person and hybrid learning is anticipated in the coming months. Second semester spending on supplies, which usually takes place in January, will be delayed into the late Winter and Spring and arrive in waves based on how and when school districts across the nation handle reopening. Factors that could slow this return will stem from the speed of the vaccine rollout, costs related to PPE and sanitation needs at schools, and newly emerging variants of the virus, among other factors.
A successful return to school will likely be mirrored in a return to work for many. According to NPD’s Return to Work Report, in March 2020, only 27% of workers worked outside of the home and by early November more than 50% of the population was back at their place of work. The shift towards working from home had a notable impact on commercial sales of office supplies which declined 21% in the last year.**** To boost productivity, consumers purchased technology, office furniture, and key office supplies products. Increased reliance on technology to work combined with more flexible work environments has hit some office supplies categories harder than others and these declines are expected to continue to accelerate as consumers opt for digital alternatives in communication, notetaking, and document storage/file sharing in the future.
Overall, U.S. adults have indicated they are becoming more productive while working from home, which may lead to more permanent changes in how we learn and work. This will undoubtedly have a profound impact on the future of office supplies sales. Over the next twelve months, these major variables will play a role in the industry’s recalibration:
- Consumers’ accelerated shift to digital alternatives will drive brands to innovate in order to stay relevant.
- Heightened need for investment in health and wellness measures inside schools and offices as COVID will be a factor for a long time.
- Shifting channel purchase dynamics, particularly as the back-to-school season drives consumers back into stores.
- Consolidation and diversification as growth strategies.
Critical trends to monitor in the coming year that will positively impact sales of supplies will revolve around schooling, the workplace, home office and study station setup, home organization, small business and marketplace seller shipping activity, personalization, CIY and DIY, and moving trends as 20% more Americans indicate planning to move in 2021 than 2020.
* Source: The NPD Group/Retail Tracking Service, 52WE Jan. 2, 2021 (excluding janitorial & breakroom)
** Source: The NPD Group/Retail Tracking Service, 13WE Oct. 5, 2019 (excluding janitorial & breakroom)
*** Source: The NPD Group/B2B Reseller Tracking Service, Jan.- Dec. 2020.
**** Source: The NPD Group/Commercial Tracking Service, Dec. 2019- Nov. 2020 (including janitorial & breakroom)