Back to school, back to learning or will it simply be back to home?

Susan Davidson
Susan Davidson
Retail Consultant at RetailNext

Will Back to School shopping be popular even in these uncertain times? Susan Davidson writes and reveals recent retail performance trends.

The MLB and NBA are back in action, PGA tournaments have resumed…. Finally, there are sports to watch on TV. Almost felt a little normal, right? Let’s be honest, not really.  With news of people having “Corona parties” where cases are now spiking across the nation, why couldn’t everyone follow directions, stay home and wear their masks? Now the reality of kitchens becoming classrooms and parents juggling the roles of their own jobs in addition to teachers and short order cooks are coming to life. Drink your Corona (at home), stop spreading the corona(virus)!  

There has been a lot of chatter around the topic of kids going back to school. Do we really think these kids are going to go back to school in person or will it be “Back to Learning” and online? Usually, to us working in the retail industry, Back to School means an extremely busy time both in stores and online with a ton of sales pressure on this period. Even in spite of the uncertainty around schools reopening in fall, the NRF published that Back to School was still going to be a record setting $100 billion event. We do however, anticipate less people are going to be out shopping in stores due to this pandemic, especially with unemployment stimulus checks just ending and no news yet if they are going to be reinstated. I’m sure most retailers are going to miss those cute grandparents that we often see picking out clothes and presents for their school-age grandchildren.  These shoppers will be at home, protecting their own health.

TRAFFIC HITS PLATEAU

Traffic trends for open stores have been relatively flat since the end of June, -42% to LY.  Net sales are still suffering, -26% to LY but we are consistently seeing improvement, and conversion (CVR), shopper yield (SY), average transaction value (ATV), and units per transaction (UPT) all continue to be positive to LY.  The average ticket (AUR) continues to be down to last year as retailers are still extremely promotional as they move through inventory. As a consumer, I always look forward to the January and July sales. But in COVID times, there are never-ending promotions as retailers try to make up for the sales that they lost when they were closed, or get through inventory they bought not knowing that we would be wearing the same 5 things for the last 6 months. With conversion rates still positive to last year, we did see an incremental uptick in the past 3 weeks as CVR was +5-6% to LY. Perhaps brands are finally able to bring in newness and ensure they are in good stock positions, and have the right assortment covering different price points to support this slight uptick in CVR. During this pandemic, buy online pickup in store (BOPIS), curbside pickup, and sharing inventory between stores and online continue to be important to retailers and growing as a percent to their total business.  

With over 5 million COVID-19 cases in the US, many states have paused or rolled back reopening plans and most states are starting to share their school plans for Fall 2020, revealing that many are adopting online learning from the beginning or mixed-school curriculums which will continue to affect traffic trends. Although California was at the forefront of reversing retail reopenings and imposing their statewide rollback and most counties, if not all, implementing online learning for fall, California traffic has remained flat for the past month but still -51% to LY. We are however, still optimistic that Back to School shopping may help improve traffic trends across the nation as the spending is projected to be record breaking. Traffic to stores in the Midwest, Northeast, and South were down in the high 30s to LY but the West had the worst trend -41% to LY. In the tri-state area, governments are mandating that people traveling from 34 states across the nation have to quarantine for 14 days when they return home. In addition to quarantining in the Northeast, Tropical Storm Isaias left many states without power as some may expect these negative traffic trends. However, people were out shopping in the Northeast in spite of the tropical storm as those coming from Delaware (DE) no longer have to quarantine for 14 days and traffic in Delaware for August Week 1 improved over 10 percentage points from July Week 4.

HOME & JEWELRY SHINING BRIGHTEST

Traffic trends across categories are still down to last year, however, jewelry and home continue to be the brightest spots. Jewelry & home were -30-40% while traffic to apparel and shoe stores continued to struggle with worse trends. We anticipate with declining traffic in apparel and footwear, there may be an uptick in beauty, wellness, and home categories as people continue to work from home and more counties announcing that students will be e-learning in place of school in person. We are however, hearing from our industry partners that footwear selling now in anticipation for kids going back to school are slip ons and sneakers that will be great for home school environments and perhaps the occasional outdoor family adventure. Kids always seem to need sneakers after a summer spent outdoors, it’s just a matter of when they will be purchased. They also mentioned with apparel it is mostly waist up, brightly colored & printed tops which are appropriate clothing for the constant Zoom meetings. Athleisure and lounge wear also continue to sell to provide the utmost comfort for those teaching, learning, and working from home.  

We are also seeing a shift into electronics and home furnishings as shoppers want to be ready when the verdict comes out if the kids are going back to school in person. Back to school shopping may have a phased approach to spending as people may be preparing for online learning now and may transition to school in person in the distant future. I’m hoping (and praying) our children (especially my own!) go back to school in person, as not only is it important for them for social interaction, but are anyone else’s kids engaging in too much screen time? Asking for a friend. The recent storm in the Northeast that resulted in a loss of power was actually a welcomed respite from the television and iPads being on too much of the day and with power out, it forced my children to play with their toys and in turn each other! And turns out, they are quite imaginative and adorable with no electronic distractions. However, as with most parents, by the 5th day of no power, I was hoping to “see the light” very soon. And eventually, we did.  

The more I read, the more optimistic I become about Back to School, more so in the shopping event versus the kids actually going back to school in person. But a person can dream, can’t they? It appears that Back to School shopping will be popular even in these uncertain times, although it may be in a phased approach. Let’s all socially distant “hold hands” on this one and keep practicing safe measures of socialization and stay home, and hopefully these kids can safely get back to school…

For July 2020’s retail performance, download our recent Performance Pulse Report.

Susan Davidson is a Retail Consultant at RetailNext. With over 16 years of retail experience, Susan has worked in both digital and retail sides of the business.  Susan has worked for retailers such as Bloomingdale’s, J.Crew, & Ralph Lauren concentrating on Merchandising, Buying, and Planning. She lives outside New York City with her husband and 3 small children. 

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