Skip to main content

Pass or Fail?

8/5/2014

As an article that appeared recently right here in Chain Store Age noted, there is something interesting going on with back-to-school shopping this year. At a time when online sales seem to be inexorably chipping away at brick-and-mortar sales, taking a bigger bite with every passing year, the 2014 back-to-school shopping season has actually seen the exact opposite trend: the International Council of Shopping Centers (ICSC) states that “the share of online as a BTS shopping venue will be 8.1% this year — a drop from last year’s 8.6%.” Overall, brick-and-mortar retail sales are projected to make up about 90% of all back-to-school shopping.



If you feel like summer just started, you’re not alone, but many people might not realize that school begins at different times throughout the country, including many right here in Arizona that have already started the 2014-2015 year! This staggered start might be one factor that is contributing to a back-to-school shopping “season” that seems to be starting earlier and lasting longer with each passing year. In support of this idea, ICSC says that the number of shoppers starting early on their back-to-school purchases jumped this year.



Aside from a curiosity, the continued expansion of the back-to-school shopping window has some potentially significant implications for many retailers, who need to think and plan strategically to maximize their promotional efforts and optimize their merchandising. Instead of a busy couple of weeks, the back-to-school season is now a prolonged period of heightened activity: closer to months than weeks. Will that longer shopping window translate to more sales, however? There the forecast is a little cloudier.



While people do seem to be buying earlier, there are differences of opinion as to whether that means they will be buying more. ICSC suggests that total back-to-school spending will jump up significantly ($325 per household on non-electronics, which would be an eye-opening number after 2013’s $285 figure). The National Retail Foundation (NRF) sees things differently, however. A July article in Fortune pointed out that the NRF sees back-to-school sales actually dropping slightly compared to last year.



As for my own observations, it seems like I’m seeing a trend where shoppers may be focusing more on back-to-school necessities rather than higher-end back-to-school apparel. Apparel is still the big driver. When it comes to electronics, my sense is that people are buying more stuff, but at a lower price, so the overall sales impact ends up being about the same. Overall, I see the picture looking a bit rosier than last year, but not by much.



The other big factor here with the potential to impact sales is the shifting back-to-school spending balance between specialty and discount retail. We are seeing more spending at the discount stores — a trend that took hold during the last recession and that has been developing for several years. Specialty stores have been trying to get back in the game, and trying to push back against what have now become ingrained shopping habits. But it isn’t easy to turn the ocean liner of consumer shopping behavior to a new course, and the new normal for the foreseeable future might just be that specialty stores will struggle to gain any real back-to-school traction/momentum. There are only so many buttons you can press, and while stores of all categories are getting more clever and creative in the ways that they promote this stuff, price points and discounts will always be the primary drivers.



Of all the back-to-school intrigue this year, what interests you the most? For me, it’s absolutely the ongoing shifts between online and brick-and-mortar retail. Will be back-to-school shopping be one of the first areas where online sales truly hit a plateau? Share your thoughts and questions below to continue the conversation, or send an email to [email protected].




Click here for past columns by Jeff Green.

X
This ad will auto-close in 10 seconds