Retailers should be strategic in planning for the back-to-school sales surge


The Houston Independent School District will open classrooms to students for the 2021-22 school year on August 23. The next school year should see a return to normal, but what will consumer behavior look like for the annual Back-to-School Retail Sales? KPMG’s most recent retail consumer survey provides some answers.

The survey of 1,000 consumers found that the average expected spending per student is $ 268, up from $ 247 in 2020. Consumers expect higher costs due to inflationary pressures.

Spending for preschool and college students in particular is expected to increase, up 32% and 13%, respectively, from 2020. Spending for middle and high school students is only expected to increase by 3% and 4%. %, respectively.

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The survey indicated that in some ways, the start of the 2021 school year will be a return to traditional in-person learning, with increased spending in key retail categories: shoes (up 21%), clothing (up 14%) and school supplies. (up 16 percent). Respondents expect to spend less on computers and study furniture in 2021 than they did in 2020 during the COVID-19 pandemic.

Going back to school last year was one of the few highlights for retailers focused in virtual learning categories including electronics, computers and furniture. While in-person learning is more common this year, digital experiences will likely continue to complement in-person learning.

This year will establish a new foundation of consumer behavior that foreshadows future retail trends. Expected trends include continued growth in online shopping, which, although slightly down from 2020, will exceed 2019 by 30%; the continued relevance of digital technology in the composition of retail spending; and increased spending in categories related to in-person interactions, such as shoes and clothing.

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For retailers, here are some key approaches to consider:

Think strategically about promotions. Retailers cannot ignore how inflation affects the structure of margins. Consumers expect to pay more, but they’re also looking for good deals. Retailers can address both supply and demand challenges in the face of inflation by taking a strategic approach to managing revenue growth. They can use analytics to understand which pricing decisions increase revenue while limiting the impact on unit volumes.

Store strategically. Retailers facing capacity issues and shortages resulting from supply chain challenges in the era of the pandemic remain concerned about adequate inventory. Back-to-school shoppers have little time to shop and will look elsewhere for supplies if shelves aren’t stocked. Retailers should focus their efforts on the categories that have the most impact, using consumer insights to inform their strategy.

Double the digital. The new delivery models that were quickly adopted during COVID-19 – ordering online for in-store pickup, curbside pickup, or shipping from the store – are not going to go away. Retailers need to optimize a multi-channel approach to meet customers where, when and how they want to shop while carefully monitoring the impact of fulfillment on profitability. Retailers can leverage data and analytics to understand true profitability at the product, customer and channel level to ensure stable margins.

In Houston and across the country, kids will start the new school year with renewed focus and the ability to connect in person with teachers and classmates. For retailers, this is just the start: the next holiday shopping season will accelerate rapidly due to new consumer buying behaviors.

Shawn Lafferty is the Consulting Market Leader for the KPMG Houston office.




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