How Will Coronavirus Impact Back-to-School Shopping? 5 Ways Retailers Can Prepare

It’s back-to-school season again

For parents across the country, June brought a collective sigh of relief. Work from home mandates and schools closures dramatically changed the lifestyle of families, turning homes into classrooms and parents into full-time teacher aids. 

Summer provided a temporary sense of reprieve until classrooms would open again in the fall, but with coronavirus cases still surging across major school districts and cities, families and students are questioning what “back to school” will look like as are the retailers and direct-to-consumer (DTC) brands that help them get classroom ready.

In 2019, back-to-school consumer spending totaled $80.7 billion, according to the National Retail Federation (NRF). As educators, families, and students prepare for the unknown, retail businesses are grappling with how school reopenings will impact one of retail’s biggest events of the year. 

The coronavirus pandemic introduces new questions for retailers

Will virtual classrooms mean greater demand for school supplies to be used at home? Will families supplement time at home with more games and toys? If school is virtual, will families still spend on back-to-school clothes and accessories? Will the same enthusiasm of stuffing a shopping cart full of school supplies in-store translate online? 

The coronavirus pandemic will impact retailers in a big way this year. Find out how you can prepare now to make it your best year yet. 

Prediction 1: Strong overall growth 

This year, an NRF consumer survey projects total back-to-school spending to reach $101.6 billion, exceeding last year’s $80.7 billion by 22 percent and topping the $100 billion mark for the first time.

We looked at consumer data by product category to understand how this year will be different than last. By percentage of overall spend, the top five categories that have traditionally led demand in back-to-school spending are:  

  1. School supplies
  2. Clothing and accessories
  3. Shoes
  4. Electronics
  5. Personal care items 

 

All these categories are expected to remain strong in 2020. Overall, consumer spending for households with grade school children is expected to grow from $26.2 billion to $33.9 billion and college-aged consumer spend is expected to grow from $54.5 billion to $67.7 billion, according to NRF. 

For grade school student spending, top categories are expected to remain the same as 2019 by percentage of purchasing. Top sellers still include school supplies (one percent growth), clothing and accessories (one percent growth), shoes (remained flat), and electronics (nine percent growth). 

By wallet share in households that have grade school children, clothing and accessories have traditionally taken the bulk of the spend, followed by electronics, shoes, and school supplies. For the first time, the total spend on electronics is expected to surpass spending on clothing and accessories for grade school students.

For college students, demand is expected to grow in 2020 in nearly every category including school supplies (two percent growth), personal care items (one percent growth), food and beverage (three percent growth), collegiate branded gear (three percent growth), electronics (seven percent growth), and gift cards (seven percent growth). 

Two categories where demand is expected to stay flat are shoes and dorm or apartment furnishings. Clothing and accessories demand is expected to decline by three percent from last year. 

Despite this, total spending by college students is expected to grow in every single category, with the most significant growth expectation in electronics.   

Prediction 2: Surge in electronics over traditional Back-to-School staples 

While overall growth is expected in nearly every category, one category is projected to show the largest gain of them all with a 22 percent increase in total spend: electronics. 

As families remain uncertain about whether schooling will be partially or fully virtual, they’re making preparations by planning to buy items like laptops, speakers, headphones, computer mice, and home office furniture. This is true for grade school-aged students and uncertain college students alike. 

Electronic sales are expected to show the biggest leap from 2019, growing by 22 percent from $20.8 billion to $28.5 billion.

For college students, electronics have always taken the lion’s share of back-to-school spending, but this year we can expect to see a much larger increase from total sales of $13.1 billion in 2019 to an expected total of $16.7 billion. Sales from 2018 to 2019 trended down from $13.4 billion to $13.1 billion.

Electronic sales spiked during shelter-in-place and have gradually trended down until the beginning of July when back-to-school sales traditionally began. We expect to continue seeing an upward trend in sales as the school year gets closer.

One example of this upward trend in electronics is laptop sales, which tremendously over 2019 since the start of the coronavirus pandemic. We saw a similar spike this month and expect that trendline to continue into September. 

Prediction 3: Location will impact spending behavior 

Demand and spend will differ depending on the certainty of reopening plans.

We looked into the buyer behavior of college students who do not intend on returning to classes in the fall versus those who do. We asked 500 consumers about their back to college shopping plans. 

Of those who were uncertain about their student’s college opening or know that it won’t be reopening, they mostly intended to buy electronics (43 percent), followed by food and beverage (39 percent), then office supplies (35 percent).  

Results differed for families of college students who are more certain they’ll be learning in-person this fall. For college students heading back this fall, most intend to stock up on food and beverage (44 percent), followed by apparel and accessories (41 percent), then electronics (38 percent). 

Whether students expect their college to reopen or not, categories with comparatively lower demand were sporting goods, toys and hobbies, and jewelry.

Depending on each family’s plans for the fall, we now know what to expect on their shopping list. The coronavirus brought a surge of online shopping due to shelter-in-place mandates. With many states reopening stores, this also affects how consumers are planning to shop. 

According to our survey of families with college students, 39 percent plan to shop exclusively online, 35 percent plan to shop through a combination of stores and online, and 12 percent plan to shop in-store. Ten percent remain unsure. 

NRF’s survey showed most families with grade school students (55 percent) and college students (43 percent) will shop online this year. Compared to last year, in-person shopping is expected to be down. 

Thirty-seven percent of consumers expect to shop in department stores (down from 53 percent), 36 percent plan to shop in discount stores (down from 50 percent), 30 percent plan to shop in clothing stores (down from 45 percent), and 23 percent plan to shop in office supply stores (down from 31 percent).

“With consumers cautious about how much time they spend out in public, there is likely to be less going store-to-store to comparison shop this year,” Prosper Insights Executive Vice President of Strategy Phil Rist said

Sixteen states have rolled out tax holidays for back-to-school items. Different rules apply depending on the state, with some honoring the tax holiday only for items bought in-store and some extending the break to online purchases as well. 

As government officials react to changes in coronavirus cases, staying on top of state and city ordinances could be one of your best strategies to match demand with supply on the right channels, whether you operate online, through a brick-and-mortar store, or both. 

Recommendations

By analyzing data on how consumers are expected to shop this year, you can implement a strategy that’ll ensure you’re meeting consumer demand. 

Here are five recommendations to help make this back-to-school season your strongest:  

1 | Promote products at optimal times

Consumer data not only helps inform what you sell but also when. If you’re a retailer or D2C brand that sells products like electronics, electronic accessories, or home office furniture, consider boosting marketing communications earlier in the season to capture the strongest demand. 

For those categories with flat or weaker demand, hold off promotional plans until later in the shopping life cycle when you won’t need to compete as much for attention. 

For instance, clothing and accessory shopping might pick up later in the season as families wait to see if schools reopen. As plans become more clear, continue to monitor search terms so you capitalize on consumer demand at the right time.

2 | Prioritize back-to-school deals 

With a majority of consumer spending expected to happen online, shoppers will have more opportunities to browse for deals. 

Thirty percent of shoppers are expected to do more comparison shopping this year. With that in mind, prioritize deals on in-demand products on your website as well as through email, SMS, search engines, and advertising platforms.

3 | Adopt location-specific marketing 

Whether schools reopen this fall will depend largely on where they’re located. By staying aware of where schools are reopening and where they’re not, you can target consumers with relevant categories based on location. 

In states and cities with classrooms reopening, consider targeting emails, SMS, and advertising with products that are highest in demand like food and beverage, personal items, clothing and accessories. 

In locations that open the school year with virtual learning environments, focus your content on electronics, electronic accessories, home furniture, and school supplies. 

By targeting by geography, you’ll be more likely to serve your customers with the products they need to adapt to the new normal in their city.

4 | Use data to plan inventory accordingly 

This consumer data allows you to plan inventory more accurately and with confidence, guiding your decisions to increase production, decrease production, or even launch new products. 

Tinuiti recommends referencing sales data from both previous years and the period when schools initially closed to help inform what products to stock ahead of shopping spikes. 

Planning ahead is especially important this year as the coronavirus pandemic has created supply chain disruptions resulting in delays for many businesses. 

“With supply chains for some products being longer than usual, anticipate demand by ordering supply as EARLY as possible. The last thing you want is to not have inventory on your top seller to participate in back-to-school,” says Aaron Gooden, associate director of marketplace search at Tinuiti. 

5 | Roll with the punches and don’t be surprised by a late rush 

Traditionally, back-to-school shopping begins three weeks to a month before school openings and tapers off in August, according to NRF

Even if reopening plans haven’t been announced for a particular school district, don’t be afraid to begin promotions now. You can help alleviate anxiety by helping families plan and purchase for a variety of potential scenarios. 

As more clarity forms around learning environments, families will have a better idea of what they need to purchase and back-to-school sales may extend well past August, even creating spikes through September and October as some districts may even need to re-shutter. 

Final thoughts 

This year could be a major year for back-to-school shopping. Between strong demand for electronics to support virtual learning and consumer apprehension about shopping in-store, this could be an especially significant moment for ecommerce retailers. 

By staying aware of local mandates and reacting with agility, brands can not only come out on top this season but also build impactful relationships with customers as they help families navigate this unprecedented school year.

Interested in more consumer data? Find out what consumers’ 2020 holiday shopping plans look like so far.

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