The long, lazy days of summer may be a nightmare for some retailers as their sales take a nosedive. The good news is that the heavy back to school shopping season will be heating up before you know it!
The months of August and September are the hottest in the U.S., as American families have only completed a little less than 45% of their shopping by the end of August.
There are significant differences between families in the U.S. and those in the UK. U.S. families:
- Stretch their spending through August and September
- Spend $83.6 billion during the back to school season
- Have a high consumer confidence, driving additional late-summer spending UK Families
- Spent £1.48 billion during the back to school season in 2017
- Are spending 5% less than they have in previous years according to a Current Account ‘Back to School’ poll
The key shift in shopping trends is global and not unexpected by industry analysts. Families throughout the world are finding it easier to shop online than at any time in the past, with department store sales continuing to fall and eCommerce shopping continuing to rise.
Mass merchants are the big winners when it comes to changing purchasing trends, with 81% of families planning a spree at these locations. Discount stores are also a buying destination as parents begin looking for discounted basics such as school supplies, sports shoes and other required basics.
Traditional department stores fall from second place to sixth in overall sales throughout the U.S. In the UK, there is a renewed migration to discount stores as families are on the lookout for discounted offerings on basics.
Part of this is due to the price increases that tend to far outstrip the income growth averages these families are seeing. Stationary and apparel in particular are two segments where parents in the UK are seeing major jumps in costs that can fuel the move to discount outlets. Ultra-low uniform pricing is being used to accelerate sales growth at major UK retailers Aldi and Lidl, too.
Amazon.com is a big winner in the purchasing war in the UK, with more than 30% of families making the decision to purchase items online for the back to school shopping season.
Pricing and convenience are cited most often as two of the key attributes that keeps parents heading back to the internet to make their purchases.
Maximizing The Most Of Your Sales
With the upcoming selling season, it is critical for retailers to maximize the dollars that they are bringing in during this second-busiest season of the year.
Downward purchasing trends continue to plague older families in the UK, while those in the U.S. are expanding their buying in nearly every demographic and sector of back to school.
Maximizing Sales In The U.S.
States offer tax-free weekends as the school year starts.
- Retailers should restock during the week to stay fully-stocked through the hot August and September weekends
- Critical items to keep in stock include backpacks, uniforms and school supplies
- Staple items are more likely to be glue sticks, pencils and erasers — all of which are required for elementary school
- Only 23% of schools in the U.S. require uniforms, mostly private institutions where you are less likely to have price-conscious shoppers
Boosting The Sales In The UK
- Over 90% of British schools require uniforms, making this purchase the ideal loss-leader
- Scotland, Ireland and Wales all require uniforms, but are less strict in their requirements
- The 55-up age group recently decreased back to school spending by 15%
Coupons Are King
Shoppers in 2017 were serious about their coupons, and there’s no reason to believe that 2018 will do anything except expand that behavior. With costs rising and income staying mostly steady, parents and kids alike are looking for good deals for their back to school purchasing.
More than 30% of Americans stated that mobile coupon apps were their go-to option for finding discounts, while others are looking online, in newsletters, on social media and even reading their newspapers to grab those valuable coupons.
Families in the UK are looking for other discount options, such as utilizing their Amazon Prime memberships to make their purchases and save on shipping.
With more than 30% of families in the UK having a Prime membership, it is not surprising that they will take advantage of this convenient and cost-effective option for their purchasing.
Couponing and loyalty purchases are a common trend in the United Kingdom, with vouchers found in newspapers and the media being the biggest delivery mechanism for discounts.
Loyalty cards are often utilized by supermarkets in particular, with the majority of UK customers saying that loyalty programs and discounting do help decide where they spend their retail dollars.
While there are some changes in the categories where parents spend their back to school money, many of the statistics are unsurprising. Families spend a large portion of their funds on outfitting the children for school, with another large percentage on consumer electronics such as phones, laptop computers, tablets and advanced electronic calculators.
Clothing accounts for as much as 55% of the budget for back to school in the U.S., while a greatly reduced percentage is spent on clothing and sports trainers in the UK due to deep discounting by retailers on uniforms.
The UK is also being affected by a program where schools are able to lease high-end electronics equipment to students instead of requiring students to purchase their own materials, which allows parents to shift some dollars to other segments for back to school spending.
Throughout the U.S. and UK, back to school spending continues to be strong — but perhaps not as strong as it has been in prior years.
The 2018 shopping season may bring some surprises as more individuals in the UK in particular are looking to save funds due to weaker financial expectations for the future. Purchasing in the US continues to be strong, but is also expected to continue the move from in-person venues to online purchasing as families look for deeper discounts and easier price comparisons.