Back to school boon for retailers, malls
Sales expected to grow 10.3% this year to $84B, trade group predicts.
The $84 billion back-to-school shopping season is back just in time as far as beleaguered mall merchants are concerned.
Consumer spending on kids and young adults returning to the classroom not only is the second-largest shopping period behind the winter holidays, but it’s one when many conventional brick-and-mortar stores are holding their own against the surge of online competition.
Although the growth of e-commerce has forced dozens of U.S. retail chains to close thousands of locations at malls and elsewhere, analysts said that children and their parents still like visiting stores to purchase items on their back-to-school lists — notebooks and lunch boxes and clothes and computers.
“This is one category where we’re seeing a surprising level of support for the in-store experience,” said Jim Mills, who heads the Southern California consumer business practice for Deloitte, the consulting and auditing firm.
Back-to-school shoppers plan to do most of their buying in physical stores, according to a survey conducted for the National Retail Federation by Prosper Insights & Analytics.
Online shopping came in third, tied with clothing stores, when consumers were asked to name all the places they were planning to do their buying. Nearly 46 percent of those surveyed said they would do some online shopping, almost unchanged from a year ago but up about 10 percentage points from 2015, showing the strong growth of e-commerce.
In a separate survey, the International Council of Shopping Centers trade group found “that 68 percent of shoppers said they don’t envision buying all of their school supplies online,” spokeswoman Stephanie Cegielski said.
“People still want to see and touch and interact with products,” she said.
Retailers increasingly are making it easier for consumers to order products online and then have them delivered to their homes or pick them up at the store. The latter option often prompts shoppers to stroll elsewhere in the store to buy other merchandise or — in the case of Wal-Mart Stores Inc. and Target Corp., for instance — pick up groceries, as well.
For many youngsters and their parents, the store visits are as important as the convenience of e-commerce. It’s one thing for kids to give their parents a holiday wish list and hope for the best, and quite another for kids to demand a select type of notebook, backpack or apparel after they’ve looked them over in person, analysts said.
“They’re online a lot, don’t get me wrong,” NRF spokeswoman Ana Serafin Smith said. “But they’re using online more to do research than to actually pull the trigger and buy.”
The NRF’s research also is showing that youths age 20 and under are “really interested in bringing the brick-and-mortar experience back” for buying back-to-school items, Serafin Smith said. “They love going into the stores and shopping the way their grandparents did.”
In contrast to back-to-school shopping, the winter holidays find parents often prefer to shop without their children. The NRF’s 2016 holiday shopping survey reflected that, with online shopping outpacing every other store category: About 52 percent of shoppers planned to buy online; the No. 2 category was department stores at 42 percent.
Back-to-school sales, including those for young adults returning to college, are expected to climb a stout 10.3 percent this year to $83.6 billion from $75.8 billion, the NRF estimates, citing stronger employment, higher consumer confidence about the economy and lower gasoline prices.
The Conference Board, a business trade group, last week said its consumer confidence index rose in July to its highest level since mid-2001.
“This is good news for retailers, arriving just as the back-toschool retail sales season is beginning to heat up,” said Chris Christopher Jr., executive director for economics at the research firm IHS Markit.
“Our forecast calls for growth of 4.3 percent in back-to-school retail sales this year compared to last year, which would be the strongest growth since 2014,” Christopher said.
The portion of back-to-school sales for kids in elementary school through high school is forecast at $29.5 billion, and the portion for college students is $54.1 billion, the NRF said.
Lavinia Johnson, with her children Micah Blanks, 11, and Brooklyn Banks, 10, shop for back-to-school supplies in late July at a Wal-Mart in Chicago. Research shows children enjoy the brick-and-mortar experience where they can see and touch the items they are interested in.
Retailers are seeing a “surprising level of support” for in-store shopping when it comes to back-to-school lists, including clothes, says an analyst in California for consulting firm Deloitte.