Retail Holiday Guide 2020: Lessons Learned from Back-to-School Spending

How can you go back-to-school shopping if you aren’t going back to school? As the summer drew to a close, that question was an existential one for retailers. Historically, back-to-school shopping patterns can be a predictor for the holiday season. But what would shopping look like in the height of COVID-19? Would brick-and-mortar stores see a boost, or would parents focus on ecommerce for their backpacks and pencils? 

Thanks to a wealth of customer data, we have some answers about what the back-to-school season looked like for retail, and what that might mean for the holiday season. Here’s what you need to know, and what to do next.

Back-to-School Spending Higher Than Expected

Many predicted a major decline in back-to-school shopping due to widespread school closings and the shift to distance learning. Thankfully, those predicting a lull in sales were wrong.

Not only did back-to-school shopping fulfill its annual promise of a major retail sales bump at the end of summer, this year’s spending registered higher than past years’. Despite schooling from home, parents are spending more than ever on educational supplies for their kids. As many as 90 percent said they expected to spend the same or more this year. Even college spending is up $13 billion, signaling strength from higher learning students responsible for their own spending. 

But they’re not buying backpacks and folios. This year’s purchases support distance learning, which means shopping carts were stocked with computer accessories. Webcams, tablets, laptops, headphones, and more represent this season’s growth drivers in the back-to-school shopping segment. This isn’t to say that pens, notebooks, backpacks and other traditional school supplies weren’t on the receipt—but they were overshadowed by more significant purchases. 

Customer Shopping Habits Have Adapted to COVID-19

Social distancing has disrupted how and when consumers shop. For many parents, back-to-school shopping is already an event associated with stress. In the context of a pandemic, consumers want a safe and easy shopping experience. 

That experience starts with the familiarity and convenience of big-box outlets. This season, buyers bought more at big box stores like Target and Walmart vs. niche stores like OfficeMax and Staples. While some of this can be attributed to the selection offered at chain stores, data shows significant emphasis on the convenience they offer over smaller retailers, such as:

• One-stop shopping at a single retailer with broad inventory
• The option for and ease of curbside pickup for items ordered online
• Local delivery direct to a customer’s doorstep
• Incentives from rewards memberships and general sales campaigns 

Combined with spending figures, it’s clear that customers are willing to pay for convenience. The ability to find everything they’re looking for, in one place, with minimal barriers to purchase is the model for retailer success during the pandemic.

Foot Traffic to Stores Appears to Be Driving Sales

Ecommerce has been a natural solution to shopping during the pandemic, but it’s by no means the de-facto option for shoppers. In fact, major retailers are still seeing strong foot traffic through stores even in spite of mask mandates, social distancing, and the general stigma of patronage during the pandemic. 

Best Buy says 60% of all sales flow through a store, showing a willingness of back-to-school shoppers to come into a brick-and-mortar establishment to make essential purchases. The reason is purely speculative right now, although many hypotheses attribute reliance on in-store sales to increased tech purchases. Parents want to make sure they’re buying their kids the right electronics and are more comfortable with a tangible purchase process. In addition, many shoppers are still conditioned to make expensive purchases in-person, rather than online. 

All this foot traffic is a signal that back-to-school shopping heralds good things for the holiday season ahead. “All of the brands analyzed have seen growth since the week beginning July 27th, signifying a strong momentum to the overall retail recovery,” said Ethan Chernofsky, Vice President of Marketing at Placer.ai, a company specializing in consumer foot traffic analytics. 

Retailers Need to Strategize for All Types of Commerce

Foot traffic is strong. Ecommerce orders are up. Curbside pickup and local delivery are on the rise. It all adds up to strong retail tailwinds headed into a pivotal time of the year: the holiday shopping season. How can retailers take lessons learned from back-to-school shopping season and prepare for the holiday rush ahead? By reducing obstacles to purchase across every shopping mode. 

• Create and execute a robust ecommerce strategy with omnichannel capabilities
• Add extra staffing at physical locations to meet rising foot traffic at-scale
• Hire and train extra help for curbside pickup and local delivery programs
• Optimize in-store pickups by coordinating online purchases between local stores
• Deploy strategic inventorying practices to maintain stock across locations

Consumers have demonstrated a willingness to spend during the back-to-school season. This willingness to spend needs to be met with convenience and an experience rooted in satisfaction. Are you making it easy for customers to find what they’re looking for online and in-store? Does your inventory encompass everything they’re looking for? How easy is it for them to get in and get out quickly? 

When it comes to shopping, simplicity and convenience is a much-needed change of pace. Retailers that make the shopping experience as simple as possible are poised to win during an upcoming holiday season that promises to be more competitive than usual.

For more analysis of the upcoming holiday season, check out our previous Retail Holiday Guide 2020 post.