How Retailers Can Take Advantage of the Back-to-School Contradiction
Back-to-school has always been on the radar for retail, but over time awareness of the shopping event’s importance has evolved. To give an idea of the scale, the National Retail Federation (NRF) reported that families will spend $82.8 billion this year for back-to-school shopping.
That’s big, but it still has nothing on holiday spending — consumers spent roughly $690 billion over the 2017 holidays, over eight times the anticipated back-to-school spending. But while the total impact isn’t as big, for the right shopper, back-to-school can be even bigger than the holiday season. The NRF reports that in 2017, college shoppers planned to spend more per person ($969.88) than they did on the holidays ($967.13). And K-12 shoppers planned to spend $687.72 per person, on average, which far outstripped the next-highest spending, on Mother’s Day ($186.39).
The spending profile for back-to-school isn't like holiday, though. Recent trends in how families approach back-to-school show that even they are aware that it takes a different strategy to maximize back-to-school spending, and retailers would do well to keep up.
For example, in 2017, spending fell off unexpectedly in mid-August, and there were concerns that it wouldn't pick back up, even though in the end it was a banner year for back-to-school spending. The NRF’s survey this year also predicts holdouts. Even though people started shopping earlier than ever, with 77 percent beginning at least three weeks before school starts, in mid-August nine out of 10 consumers still said they weren’t done back-to-school shopping yet.
The Big Split: General Merchandise Early, Apparel Late
The mid-August dip may not be so unexplained when you consider shopper behavior. Shoppers are starting earlier but also finishing later, and part of that may be the nature of back-to-school shopping itself. In the NRF survey, shoppers report wanting to wait for better deals later in the season, but this may well reflect their sophistication when it comes to retailers’ fashion seasons, and planned markdowns. To compensate, retailers should anticipate the shift from early shopping behavior to later-season behavior.
- General Merchandise Early: Unless you have a first-time kindie, every parent at this point knows the drill — new pencils, pens and highlighters; some paper and notebooks; a binder; maybe some folders or an organizer. You buy the minimum to make sure your kid isn’t “that kid” on the first day of school. And while you’re there, retailers have the opportunity to entice a few brand new back-to-school outfits. However, these are more likely to be summer clothes, but with a more serious back-to-school vibe, because it’s still too hot outside to look at long sleeves or pants. Even parents shopping for school uniforms can be wary of investing in winter clothes — you buy too early, and they won’t last the winter.
- Apparel Late: Once the weather turns, parents who know how to navigate winter growth spurts are more willing to buy, because they know the pants will actually last until spring. Savvy shoppers are also hoping to get in on the first set of fall markdowns. This is also the opportunity for retailers to shift their general merchandise strategy to more specialized items such as graph paper notebooks, sketchbooks, flash drives and hard drives — i.e., the kinds of things that you don’t know your kid needs until after teacher lists and back-to-school nights. Retailers can take advantage of the big clothing shopping trips to encourage impulse or “oops I forgot” buying in general merchandise.
The Bottom Line
Back-to-school isn't like holiday shopping. The spending profile is different, as is the shopping behavior. Retailers still have the opportunity to tailor their late-season offering now — and they would do well to anticipate more lasting shifts in behavior for next year.
Nikki Baird is the vice president of retail innovation at Aptos, a singular commerce platform that unifies the entire retail enterprise.