Economic conditions look good for back-to-school spending this year—unemployment is low, consumer confidence is at a 16-year high, housing prices have risen and gas prices remain low—leading to healthy forecasts for shopping this season. Fung Global Retail & Technology expects US back-to-school sales to increase by a solid 3%–4% this year, which would result in sales of $28.1–$28.3 billion, an increase over the National Retail Federation’s $27.3 billion spending figure for last year.
Yet the nature of back-to-school shopping has changed, owing to the power and convenience of the Internet and the efforts of a variety of retailers. Consumers no longer have to wait for back-to-school sales to fill up their shopping carts with all their kids’ school supplies and apparel (sometimes a tiring struggle through a series of stores with the kids). The popularity of e-commerce means that parents can now compare prices and order goods from a variety of vendors and then have them delivered to their doorsteps.
There have long been summer shopping holidays such as “Christmas in July” that are designed to stave off the summer doldrums and build shoppers’ anticipation of the back-to-school season. Some of these events preceded Amazon Prime Day, which has rocked the boat the last three years. Now, Amazon Prime Day offers a plethora of deals every July (it fell on the 11th this year), encouraging savvy shoppers to stock up well ahead of the traditional back-to-school season. Amazon-branded, educational-oriented electronics with such as Kindle tablets/e-readers were heavily discounted on Prime Day this year. And, as of late July, Amazon already has “Back to School Essentials” web pages on its site featuring school supplies and office products.
Many other retailers, not wanting to be left out and seeking to ride Amazon’s coattails, offer their own shopping events, such as “Black Friday in July” sales, to compete with Amazon Prime Day. Although less relevant for US consumers, there are new and emerging international shopping holidays, too, such as JD.com’s shopping festival on June 18 and Alibaba’s mammoth Singles’ Day shopping event every November 11. This week, Walmart announced the expansion of its cooperation with JD.com and said the two companies are launching yet another shopping event on August 8 (eight is a lucky number in Chinese, so 8/8 is twice as lucky).
Still, back-to-school is not a complete shoo-in for Amazon. Results from a recent survey by the International Council of Shopping Centers (ICSC) show that a great many back-to-school shoppers still like to visit physical stores for a variety of reasons, as shown below.
Figure 1. Reason for Back-to-School Shoppers to Visit Stores
Other recent surveys show that although Amazon no longer offers the cheapest prices on certain items, the company still excels at convenience and ease of use. Online publication Retail Dive conducted a comparison study of back-to-school items using the Wikibuy extension for Google’s Chrome browser, and found that other vendors offered prices that were 15% lower.
Back-to-school shopping, like most things in retail, continues to evolve, and Fung Global Retail & Technology will cover this year’s US back-to-school season in detail in a forthcoming series of reports.
Other pieces you may find interesting include: US Back-to-School 2017, Amazon Announces a Record Third Annual Prime Day, Amazon in 20 Charts—the Rise and Rise of the E-Commerce Giant Amazon to Acquire Whole Foods Market for $13.7 Billion in Cash