With one month left to go before school’s return (in much of the country), back-to-school shopping is already well under way. Our industry analysts across fashion, office supplies, consumer electronics, B2B technology, home, and toys have been following the 2016 and 2017 season trends closely. See how the retail holiday has evolved and what brands and retailers need to know to weather the storm.
Gone are the days when kids and parents would make a ritualistic trip to the store two weeks before school’s return. Back-to-school shopping has become so spread out and opportunistic in response to sales that it seems to have watered down the excitement that once existed for children and their parents. Chief Industry Analyst Marshal Cohen warned that the “challenge for today’s retailers, both brick-and-mortar and e-commerce, is to bring the excitement of back-to-school shopping back into the equation for all students, from kindergarten through their final year of college.
In case you missed the memo, there’s no single “back-to-school season” anymore. In 2016, 39 percent of consumers started their back-to-school shopping before July—while most schools were still in session! But there were also last-minute shoppers—one third of consumers—who waited until September or later to finish their shopping, making final purchases well into the school year. In 2017, 28 percent of consumers said they planned to start even earlier than last year. So retailers and brand must understand that back-to-school shopping now spans six months, from before May to October.
The back-to-school timeline has also evolved into a series of mini-seasons, impacted heavily by tax-free shopping days from July 28 to August 26 at the local level. These shopping “holidays” have created sales peaks at brick-and-mortar retailers for different categories and states.
Everyone in retail is buzzing about e-commerce, but let’s remember that the number-one preference for purchasing back-to-school products is brick-and-mortar. More than 70 percent of last year’s back-to-school purchases were made in stores, with in-store purchases varying by industry from a low of 61 percent for sports equipment to a high of 78 percent for school supplies. Consumers claimed the most important benefits of in-store shopping revolved around practicality – the ability to get other shopping done and have a wide selection of brands and products from which to choose.
Even though brick-and-mortar is still king for back-to-school, shifted spending to the online marketplace for categories like sports equipment means fewer impulse purchases. Consumers said free shipping is one of the most important benefits of online shopping. In addition to free shipping, brands selling back-to-school products online must integrate other perks to make up for the lack of spontaneous purchases made while walking store aisles.
U.S. shoppers love a good deal. Almost 60 percent of consumers claimed to only buy back-to-school items on sale/discount. On the other end of the spectrum, more than 40 percent of consumers make their back-to-school purchases whenever is most convenient, regardless of sale dates or tax-free holidays.
Which categories inspire greater spending? More than 45 percent of shoppers plan to increase their spending on the top categories for the season—fashion and school supplies—in the 2017-18 school year. These categories are popular for both K-12 and college-aged students. Among K-12 students, the next-biggest categories are school accessories, art supplies, and electronics. For college students, it probably comes as no surprise that bedding, bath, storage supplies, and personal care and grooming products are a greater priority.
More education firms plan to spend on classroom technology for back-to-school this year, fueled by larger classrooms, project-based learning, and digitally-based testing. As teachers aim to reach every student more effectively in and out of the classroom, schools are integrating learning management systems like Blackboard, Moodle, and Google Classroom. To develop students’ communication skills, interactive whiteboards are growing in popularity, increasing 136 percent in units year to date compared to the prior year. Chromebooks are also big, driven by digitally-based Common Core Standards testing, with B2B shipments increasing 26 percent year to date versus last year. To connect these devices to the Internet, more education institutions than last year plan to purchase networking gear. And in schools with heavy STEM/STEAM curriculum, educators are adopting technologies like 3D printers, microcontrollers, and drones to teach students how to program and code.
It’s more difficult to justify a scooter or Barbie purchase when you have other near-term priorities like preparing your child for the school year with clothing and supplies. For the toy industry, August is a bit of drag, with back-to-school expenses exhausting most disposable income. The one exception is educational toys—particularly flashcards—that sell more than usual during the back-to-school season. These educational toys are slightly overdeveloped for preschool children and lower-income households, indicating that lower-income families of preschoolers are looking for ways to educate their children through inexpensive toys. Toy manufacturers and retailers must do more—especially during back-to-school, in lower-income neighborhoods—to offer high quality, inexpensive, fun, preschool education toys.
We found 65 percent of U.S. consumers who have the option to purchase pre-packaged school supply kits from their child’s school or PTA have chosen to do so at least once. And 45 percent of these consumers have purchased a school supply kit on more than one occasion, with the primary draw being convenience of being able to buy all supplies in one fell swoop. Some online services even allow shoppers to fulfill their entire school list in just one click; after uploading their child’s school list, shoppers can have the complete package delivered directly to their home or school. But 35 percent of shoppers forgo the school packs, primarily to save money by selecting supplies themselves, and because some students actually enjoy the selection process.
College-focused shopping naturally involves a wider variety of categories than does traditional back-to-school shopping (think bedding, kitchen items, and small electrics). But back-to-college shopping differs in that after students buy dorm room starter essentials for freshman year, they don’t need the same items year after year, with the focus shifting to filler purchases. To counter this trend, retailers have gotten creative with the products they market as back-to-college, expanding their assortments to compact refrigerators, microwave ovens, single serve coffee, hand/stick vacuums, and even induction cooktops.
We’re also seeing success from retailers who offer added value in convenience. Many retailers provide college shopping lists tailored to specific campuses, both online and in-stores. And some retailers are moving beyond local in-store pickup to offering pop-up booths on campus or special buses that drive students to local stores in the first week of school. As retailers get closer to offering door-to-door delivery, the potential for success is even greater.
While most of college shopping happens in August, it is critical for retailers to provide convenient ways for consumers to accomplish their “fill-in” needs as they start to set up their rooms (which may extend beyond August to September). In addition, many rising college Freshmen might need to begin their planning in advance of August. Given the overall consumer need for home products in June and July, there may be an opportunity for retailers to introduce back-to-college earlier in the season and market to both parents and college kids. To convert parents, for example, retailers might offer buy-one-get-one opportunities on bedding for “mom and her college kid”.
These were just some highlights of our back-to-school insights across the fashion, technology, office supplies, home, and toys industries. For more blog posts, infographics, press releases, and whitepapers on this topic, visit our 2017 Back-to-School Shopping Trends page. For other retail trends and insights, or to discover how you can better measure performance for your categories, retailers, regions, or territories, visit our LinkedIn page, contact your NPD account representative, call 866-444-1411, or email firstname.lastname@example.org.