August 4, 2015
Has back-to-school become a non-event?
With families buying throughout the year, reusing last year’s purchases and delaying purchases into the school year, the back-to-school (BTS) selling season may be losing its appeal.
According to Deloitte’s annual "Back-to-School" survey, 38 percent of surveyed parents shopping for children in grades K-12 said the BTS shopping season — typically July and August — is less important to their families because they replenish school supplies throughout the year and feel less need to stock up. The number of consumers who plan to reuse last year’s items has risen from 26 percent to 39 percent between 2011 and 2015.
Also, 31 percent of respondents plan to complete their BTS shopping after the start of the school year, a five-percentage point increase from 2014.
Overall, the survey found that parents’ average spending (grades K-12) is expected to remain relatively flat, increasing only $5 to $375 this year.
"Consumers are sending a message to retailers that says the back-to-school shopping season just isn’t that important anymore — and that could dramatically disrupt an industry that traditionally relies on this defined period for a significant portion of annual sales," said Alison Paul, Deloitte’s vice chairman and retail and distribution sector leader, in a statement.
"If consumers are content with the items they already have, the two-for-one promotion may no longer get them to the register," said Ms. Paul. "Instead, retailers will have to provide something more meaningful or exclusive that fits their customers’ needs when they are ready to buy."
Deloitte’s findings contrast with those from the National Retail Federation (NRF).
Source: 2015 NRF Back to School/College Spending Survey conducted by Prosper Insights & Analytics
NRF’s "Back-to-School Spending Survey" of K-12 parents found that the average family plans to spend $630.36 on apparel, electronics and school supplies, down from $669.28 last year. But NRF president and CEO Matthew Shay said that, as seen over the last 13 years, BTS spending has consistently fluctuated based on children’s needs each year and it’s unlikely most families would need to restock and replenish every year.
NRF also noted that the survey comes after average BTS spending has grown 42 percent in past 10 years, including a five percent gain in 2014. Mr. Shay added, "Parents this summer will inventory their children’s school supplies and decide what is needed and what can be reused, which just makes good budgeting sense for families with growing children."
- Deloitte study: Consumers decide back-to-school shopping can wait – Deloitte
- After Splurging In 2014, Families Trim Back-To-School Spending For 2015 – National Retail Federation
- In-Store Shopping Experience Still Reigning Champion for Back-to-School Season – International Council of Shopping Centers
- Parents ‘Still Grappling’ with Back-to-School Spending – National Retail Federation
- Back-to-School 2015 – Deloitte
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Cathy Hotka
Principal, Cathy Hotka & Associates
Ryan Mathews
Founder, CEO, Black Monk Consulting
Recent Discussions
Discussion Questions
Do you see the back-to-school selling season becoming a less critical sales driver for retailers? If so, what factors do you think are changing the BTS opportunity? What adjustments may retailers have to make?
Poll
From my experience, the so-called surge of back-to-school business turned into a smaller wave a long time ago. It’s driven in part by national retailers in markets where schools open from early August to post-Labor Day. But in particular it’s driven by consumers’ long-established pattern of buying closer to need: When your child outgrows her Nikes, it doesn’t matter whether it says March or August on the calendar.
There are other factors pushing apparel purchases past the opening of school: First, young shoppers’ desire to see what others are wearing — and fast fashion retailers’ ability to satisfy that desire. Second, the change of seasons (to cooler weather) seems to happen later and later, pushing the “need to buy” incentive well past the first day of school.
I don’t know whether sales will be up or down, I just know that the best ad of all time was Staples’ “It’s the Most Wonderful Time of the Year” ad.
Well, I just completed my own back-to-school shopping last weekend. I agree that it is less concentrated of a “season” compared to other selling periods, what with staggered start dates and different approaches to school models (year round, etc). But there was still an awful lot of need in our household.
However, that said, I have found that my spend has shifted significantly as my kids age. This year, with a 13-year-old who grew five inches over the last six months, was all about clothes. And a new laptop for my daughter meant that we didn’t have to buy all the paper and notebooks and pens and markers and whatnot of elementary school, as she moves to middle school.
So our school supply budget ended up being much less (with the big electronics hit instead). So I don’t know that it’s dead as a season — it’s still a good time to clean out closets, and kids need that back-to-school outfit for school pictures — but it’s more like the back to school quarter, July, August and September, than it is a four to six week selling season. And that does mean that retailers need to treat it differently — more like a long haul than a sprint.
From personal experience (daughter entering second year of college), the back-to-school selling season is alive and well. We’ll easily top last year’s expenditures as she’s moving out of the dorms and into her own apartment. In general, however, I agree the season is becoming less important for consumers and several leading retailers (both physical and online) are the reason. Companies like Staples, Bed Bath & Beyond and Walmart have been training consumers to look for bargains in the school supply aisles all year round by including promotions in their circulars. Amazon and the digital versions of Staples and Walmart have also pushed to elongate the school shopping season to extend for the entire year. This is the way of the future and I’m not sure back-to-school will ever be as dramatic a selling event as it once was.
With two kids, aged 10 and 11, I can attest that shopping for them is a year long event — not just a BTS shopping fest. Why? I think it’s because the availability to shop, in-store and online, is much more prevalent than it was when I grew up. On top of that, kids are much more aware of what’s hot, new and “must-have.” That drives purchases throughout the year. The only real BTS push is for school supplies, so Staples and the like are about the only ones who I can see really benefiting in a big way.
BTS is just further down the path of being spread across a larger period of time than it used to be. Just like Black Friday (also a retailer-manufactured “shopping holiday”) is now being spread into summertime, these shopping events are continually evolved by the retailers that created them. The winner in the end is the shopper who can find promotions more often.
Back-to-school isn’t what it once was because retailing isn’t what it once was and neither are kids.
Online offers seduce parents’ budgets and that new box of crayons and a dozen No. 2 pencils are just less attractive in a digital tablet era where many school systems no longer even bother to teach archaic and esoteric subjects such as penmanship. I mean, come on, how 20th century can you get?
That said, which would you rather sell — a new laptop or a pencil bag?
The market is moving as school and office supply shopping is spread out between seasons and not concentrated in a few weeks.
Retailers can’t cancel BTS quite yet, but they can begin evolving with the times, understanding that learning in the 21st century is an ongoing effort and that all of us have been recast in the model of perpetual students.
So the need for the products has grown, even if the marketing of the products has not.
The BTS season has historically been a lucrative season for retailers, but it has spread out considerably. Shoppers are checking out at other times during the summer and even into the fall after classes have already started.
I think that early sales are having an impact on all shoppers. When it feels like the summer has just begun, many retailers have already launched BTS marketing campaigns to get shoppers to start stocking up early. It’s tricky to keep BTS revenue in the typical time frame because it’s always changing. Any retailer that starts promoting their BTS gear the first week of August has already lost the race. Retailers need to spread out promotions to make the most of the season.
From our own analysis we’ve seen that the BTS period has expanded. Amazon already decreased prices in the BTS category at the beginning of June and prices have remained low since then.
Seems that the mix of convenient online purchasing with the current trend of reusing and being more economical has had an impact on the BTS season, making it more spread out with less of a peak.
To see the full analysis, checkout our latest blog, How Amazon, Walmart, Staples and Office Depot are doing Back-to-School.
Well there seem to be some factors that are changing the BTS opportunity. The always-on consumer having access to the always-open retail store with an always-competitive marketplace and algorithms.
BTS while significant may have lost the “attention” in the consumer’s mind on account of these factors.
Retailers will need to glean meaningful insights to uncover where the new opportunities like types of products and services lie, and find more effective ways to market to their audiences.
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From my experience, the so-called surge of back-to-school business turned into a smaller wave a long time ago. It’s driven in part by national retailers in markets where schools open from early August to post-Labor Day. But in particular it’s driven by consumers’ long-established pattern of buying closer to need: When your child outgrows her Nikes, it doesn’t matter whether it says March or August on the calendar.
There are other factors pushing apparel purchases past the opening of school: First, young shoppers’ desire to see what others are wearing — and fast fashion retailers’ ability to satisfy that desire. Second, the change of seasons (to cooler weather) seems to happen later and later, pushing the “need to buy” incentive well past the first day of school.
I don’t know whether sales will be up or down, I just know that the best ad of all time was Staples’ “It’s the Most Wonderful Time of the Year” ad.
Well, I just completed my own back-to-school shopping last weekend. I agree that it is less concentrated of a “season” compared to other selling periods, what with staggered start dates and different approaches to school models (year round, etc). But there was still an awful lot of need in our household.
However, that said, I have found that my spend has shifted significantly as my kids age. This year, with a 13-year-old who grew five inches over the last six months, was all about clothes. And a new laptop for my daughter meant that we didn’t have to buy all the paper and notebooks and pens and markers and whatnot of elementary school, as she moves to middle school.
So our school supply budget ended up being much less (with the big electronics hit instead). So I don’t know that it’s dead as a season — it’s still a good time to clean out closets, and kids need that back-to-school outfit for school pictures — but it’s more like the back to school quarter, July, August and September, than it is a four to six week selling season. And that does mean that retailers need to treat it differently — more like a long haul than a sprint.
From personal experience (daughter entering second year of college), the back-to-school selling season is alive and well. We’ll easily top last year’s expenditures as she’s moving out of the dorms and into her own apartment. In general, however, I agree the season is becoming less important for consumers and several leading retailers (both physical and online) are the reason. Companies like Staples, Bed Bath & Beyond and Walmart have been training consumers to look for bargains in the school supply aisles all year round by including promotions in their circulars. Amazon and the digital versions of Staples and Walmart have also pushed to elongate the school shopping season to extend for the entire year. This is the way of the future and I’m not sure back-to-school will ever be as dramatic a selling event as it once was.
With two kids, aged 10 and 11, I can attest that shopping for them is a year long event — not just a BTS shopping fest. Why? I think it’s because the availability to shop, in-store and online, is much more prevalent than it was when I grew up. On top of that, kids are much more aware of what’s hot, new and “must-have.” That drives purchases throughout the year. The only real BTS push is for school supplies, so Staples and the like are about the only ones who I can see really benefiting in a big way.
BTS is just further down the path of being spread across a larger period of time than it used to be. Just like Black Friday (also a retailer-manufactured “shopping holiday”) is now being spread into summertime, these shopping events are continually evolved by the retailers that created them. The winner in the end is the shopper who can find promotions more often.
Back-to-school isn’t what it once was because retailing isn’t what it once was and neither are kids.
Online offers seduce parents’ budgets and that new box of crayons and a dozen No. 2 pencils are just less attractive in a digital tablet era where many school systems no longer even bother to teach archaic and esoteric subjects such as penmanship. I mean, come on, how 20th century can you get?
That said, which would you rather sell — a new laptop or a pencil bag?
The market is moving as school and office supply shopping is spread out between seasons and not concentrated in a few weeks.
Retailers can’t cancel BTS quite yet, but they can begin evolving with the times, understanding that learning in the 21st century is an ongoing effort and that all of us have been recast in the model of perpetual students.
So the need for the products has grown, even if the marketing of the products has not.
The BTS season has historically been a lucrative season for retailers, but it has spread out considerably. Shoppers are checking out at other times during the summer and even into the fall after classes have already started.
I think that early sales are having an impact on all shoppers. When it feels like the summer has just begun, many retailers have already launched BTS marketing campaigns to get shoppers to start stocking up early. It’s tricky to keep BTS revenue in the typical time frame because it’s always changing. Any retailer that starts promoting their BTS gear the first week of August has already lost the race. Retailers need to spread out promotions to make the most of the season.
From our own analysis we’ve seen that the BTS period has expanded. Amazon already decreased prices in the BTS category at the beginning of June and prices have remained low since then.
Seems that the mix of convenient online purchasing with the current trend of reusing and being more economical has had an impact on the BTS season, making it more spread out with less of a peak.
To see the full analysis, checkout our latest blog, How Amazon, Walmart, Staples and Office Depot are doing Back-to-School.
Well there seem to be some factors that are changing the BTS opportunity. The always-on consumer having access to the always-open retail store with an always-competitive marketplace and algorithms.
BTS while significant may have lost the “attention” in the consumer’s mind on account of these factors.
Retailers will need to glean meaningful insights to uncover where the new opportunities like types of products and services lie, and find more effective ways to market to their audiences.