Back-to-school spending season already underway, sales expectations mixed

The summer is just getting started and yet retailers from Wal-Mart to Target have already begun merchandising stores for the busy back-to-school season which began a little earlier this year, according to a report by MediaMath.

The report from MediaMath indicates the conversion from shoppers to purchasers began to climb the week of Independence Day and is expected to peak by the beginning of August.

Back-to-school spending topped $75.8 billion last year which included K-12 and college. The National Retail Federation has not yet released its 2017 estimates, but an early report by eMarketer predicts retail sales are poised to rise 4% during the back-to-school season when compared to a year ago. With that assumption, back-to-school spending would total approximately $78.83 billion.

Back-to-school has traditionally been one of the biggest boons for retailers to shake off the doldrums of summer. But as e-commerce continues to grow, eMarketer expects online spending of $37.56 billion in five key product categories: apparel and accessories, books, computers and electronics, office supplies, toys, hobbies and sporting goods.

“Ecommerce growth this year comes on top of a strong year in 2016, making it that much more impressive,” said eMarketer senior analyst Yory Wurmser. “Younger consumers that shop in preparation for going back to high school and college actually prefer shopping online, so ecommerce growth should continue for the foreseeable future.”

eMarketer excludes home goods from its definition of core back-to-school product categories despite the big role dorm shopping plays in back-to-school sales. Although important, home goods do not see a significant bump in sales during the season relative to other parts of the year, according to eMarketer.

The report found the two leading online and offline retailers for back-to-school shopping are Amazon and Wal-Mart and this year analysts expect the competition to be heated for consumer dollars.

FIELD AGENT
Fayetteville-based Field Agent surveyed 1,000 of its U.S. agents in May about their back-to-school spending intentions. The report found half of those surveyed plan to spend more this year on back-to-school items, and just 5% will spend less. Field Agent said last year 44% of respondents planned to spend more. While 50% expect to spend more than last year, 57% said back-to-school is a drain on their household budget.

When it comes to clothes and shoes, 53% said kids influence the purchase. However with school supplies just 20% of kids influenced the purchases. Consumers overwhelming said they will follow the school supply lists provided by schools for the basic items.

Tax free holidays offered by states in conjunction with back-to-school spending draw mixed responses as 54% said they will buy some of their items on the tax free holiday, while 39% said their purchases will not be influenced by the tax holiday. Just 7% will do all of their shopping on the tax free holiday.

Clothing, school supplies and footwear were deemed essentials by more than 95% of those surveyed by Field Agent. The biggest complaints about back-to-school shopping involved retailers being out of stock as the start of school approaches, crowded lines, having to make trips to multiple stores, and the high cost of supply lists with which parents say they feel they have no choice but to buy.

Retailers cited by the Field Agent respondents as their go-to places include: Wal-Mart 88%, Target 65%, Dollar Tree 36%, Amazon 32%, Dollar General 26% and Walgreens 24%.

EBATES REPORT
Not all the early estimates predict more spending this year. A separate report from Ebates completed by Propeller Insights in June found shopper intentions somewhat timid.

Roughly 42% of the 1,500 parents surveyed plan to spend between $100 and $300 on school supplies, significantly less than the $250-$500 they planned to spend last year. Not only are parents spending less, but they are trying to make their dollar go even further, with 80% planning to take advantage of back to school promotions, according to Amit Patel, CEO of Ebates.

“Our Back to School survey found that budgets are smaller this year and that parents and teens are shopping for the tried-and-true back to school essentials,” Patel said.

The Ebates survey found parents (73%) and teens (60%) were aligned in their thoughts on back-to-school essentials with each saying clothing and shoes were at the top of their shopping lists. Other essentials on parent’s and teen’s lists include pens/pencils/notebooks and a backpack. Electronics such as laptops, iPads and cellphones were also on the lists of parents and teens.

Teens also said they plan to get haircuts and those headed to college plan to buy microwaves (24%) and mini fridges (22%), futons (15%) and hot plates (11%). The survey also found that consumers plan to buy the majority of their back-to-school items in two or three stores.