Outlook on Back-to-School Sales Has Retailers Cheering

Total Volume Projected to Reach Near-Record Levels for the 2016 Season

The school bell is ringing in the second biggest retail spending season of the year. Retail trend watchers are predicting more-than-healthy sales with shoppers in an upbeat mood and retailers and retail real estate companies like Levin are keeping a close eye on the action. The National Retail Federation (NRF) projects that total sales will approach a near-record level of $75.8 billion, up from $68 billion last year. The season began early with shoppers hitting stores and online sites in June, and so far the purchasing pace is strong. We’ll see the full story next month, but for now here’s a look at what’s behind the surge.

More Kids in School: A Retail Trend That Will Continue
As the NRF observed, the children of the first wave of the massive Millennial generation are beginning to swell the school age population, contributing to increased BTS spending (a retail trend that’s expected to continue over the next decade as the Millennials enter the job market and form families).

More Confidence in the Economy
Mid-July’s consumer confidence figures held steady with Americans reporting positive attitudes about the economy. That confidence is reflected in Deloitte’s ninth annual back- to-school survey in which 81 percent of respondents said their finances were better or the same as last year. It’s no surprise then that 39 percent of those polled by the Rakuten Marketing Survey said they plan to spend more on BTS purchases than last year. Depending on the source, the projected average spend ranges from $488 to $673 per K-12 student.

Starting Early, Spending More at Bricks and Mortars and Online
Online BTS shopping continues to climb – projected to expand by 9 percent in 2016. But bricks and mortar stores will continue to dominate, except in the electronics category where online is the top choice. Here’s where US shoppers, who’ve been buying for BTS since June, say they will be spending their dollars:

  • Discounters
  • Department Stores
  • Clothing Stores
  • Online (top of the list for electronic purchases)

Online is expected to continue to play a major role in BTS purchase decisions as shoppers (61 percent) reported in the Deloitte survey that they will research products, compare prices and look for deals online prior to heading out to shop. Fifty percent of those said they will rely on their smartphones when making purchasing decisions.

Free Shipping Will Drive Online Purchases, Store Pick-Up Appeals
According to the NRF, online BTS shoppers are heavily influenced by free shipping. Eighty-nine percent of those surveyed said they reject paying for delivery.

Ordering online with store pick-up was favored by 54 percent of the respondents, while 10 percent (predominantly male) wanted same day delivery.

Apparel Heads the BTS Shopping List, Lunch Boxes and Backpacks are the Most Sought-After Accessories
Clothing, electronics, shoes and supplies are the top categories on 2016’s BTS list. (For high school or college students, electronics lead the pack). Office supply stores and drug stores, long the source of pencils and paper, will likely feel new competition from kits marketed by schools or PTAs.

Topping the trends for elementary schoolers are the once-utilitarian lunch box and backpack, reborn in a wide variety of fabrics and styles. It’s Hello Kitty and My Little Pony themes for girls, while boys are opting for camo and superheroes. High-end backpacks for the elementary set feature LED lights, while packs for computer-toting high schoolers and college students offer multiple pockets for electronic gear and accessories.

Not surprisingly, school-bound girls are going for animal prints and glitter, while boys are opting for Under Armor and Nike apparel. But surprisingly, kids are helping fund their BTS buys. The Deloitte study projects that elementary school students will lay out an average of $20 and middle schoolers an average of $33 for BTS purchases. Is this the influence of thrifty Millennial parents? Stay tuned. And stay tuned as well for the final numbers on BTS 2016.