*ahhh*… is there anything better than the smell of a fresh college-ruled notebook or seeing a dozen perfectly sharpened number two pencils? Back-to-school season is upon us — and alongside the nostalgia of it all is massive consumer spending at brick-and-mortar and online retailers alike.
As co-CEO of Omni Talk, one of the fastest-growing media platforms in retail, broadhead board of advisors member Anne Mezzenga provides forward thinking on the future of retail and current industry trends. Prior to starting Omni Talk, Anne was the director of marketing and partnerships for Target’s “Store of the Future” project.
We sat down with Anne to get the scoop on what retailers can expect to see this back-to-school season, and to get her take on a few contrasting predictions across the industry.
broadhead: According to Retail Dive, the entire back-to-school shopping experience this year will be about reducing costs (we’re looking at you, inflation). Parents plan to shop ahead of time for deals, pay with cash, and prioritize in-store buying.
But the National Retail Federation is reporting that back-to-school spending is expected to reach an unequalled $41.5 billion, up from $36.9 billion in 2022. Obviously, consumers want to save money, but it appears they’re continuing to spend larger amounts every year.
What do you think is causing these contrasting shopping habits to play out simultaneously?
Anne: I think it’s about families reducing costs so that they can buy more and stretch their dollars further. For example, Walmart has said that they’re keeping the cost of the 14 most common school supplies the exact same as last year, which will drive many families into their stores for their back-to-school stock-ups. While they’re there getting deals on school supplies, they’ll also be stocking up on apparel, shoes, electronics, accessories, school lunch snacks, etc. — and all those items factor into that total back-to-school basket.
Finally, many school supplies are still low priced enough to be considered an “affordable luxury” which could mean we see more spend in this category than in previous years.
Prices for school supplies have jumped nearly 24% in the last two years, according to data from the Bureau of Labor Statistics. Yet, according to Deloitte, six in 10 parents say they would be willing to splurge for the right reasons, like treating their child or helping their child express themselves.
What can retailers do to better harness the driving force behind consumers splurging on certain items for their kids during the back-to-school buying season?
This goes back to affordable luxury. Travel is expensive right now, so there may not be school break vacations happening for many families. But upgrading to a nicer backpack, splurging on mood-boosting colors and patterns in folders, pens and notebooks, or getting a few extra clothing items at a big box retailer like Target or Walmart is certainly something that can bring happiness to families, with a much lower financial impact.
Merchandising teams are already predicting demand, ensuring in-stock availability and fulfillment in the most convenient way for their customers — another way for retailers to try and understand the “splurge” trend might be to invest in social listening. What’s trending on TikTok that kids say they need to have now, and how does your assortment align? Do you have a contingency plan to react to the demand quickly? The supply chain and flexibility to support spikes caused by those top-desired affordable luxury items? If not, you should do that. Now.
According to a 2021 KPMG research study, 34% of shoppers did their back-to-school shopping online pre-pandemic. Yet, in 2023, ROI Revolution claimed 50% of consumers plan to shop for back-to-school items online.
What are your predictions around the future of in-store versus online back-to-school shopping? Will online shopping continue to remain as relevant, or will in-store shopping start to take more of a front seat again soon?
While most of our shopping is still done in stores, categories like school supplies — especially those that can be quickly added to the cart in one click at some of the larger retailers like Amazon, Target, and Walmart — will continue to see a significant online demand. As with anything in today’s retail world, retailers must continually evolve to meet the needs of their customers. A quick, one-click order of pencils, notebooks and markers may not be something that parents and kids need to come into the store to pick up. However, for some of the other categories like clothing and shoes, the discovery that happens in-store is where the magic really happens — and this is where the increase in basket size happens too.
A survey for National Retail Federation from Prosper Insights & Analytics found 39% of back-to-school and 35% of back-to-college shoppers say they’d consider buying used clothing and accessories in 2023. According to Business Insider, 64% of surveyed members of Gen Z look for an item secondhand before buying it new. Clearly there is a trend and desire from younger generations to shop secondhand before looking for brand new items.
How do you see this trend affecting the future of back-to-school clothing and accessory buying?
According to the Robb Report, the resale economy is projected to exceed $77B by 2025 and retailers are already starting to see the impact on sales which is why we’re seeing Madewell, American Eagle, and others starting to partner with ThredUP and similar companies to bring resale to their own platforms.
Right now, it’s still a treasure hunt for back-to-school shoppers to find some of the items they’re looking for in a resale environment, and it’s much simpler to do in a single trip to the mall. As resale is super charged with technology, and the process becomes more efficient, I expect it will take more share.
The best example of this is Poshmark’s new Poshmark Lens that utilizes computer vision and AI — allowing customers who are shopping secondhand to upload a photo of a product they see in store, on their friend, or in a TikTok post and within seconds, see all the secondhand options available. Until now we were relying on individuals to have the know-how of running an e-commerce site to write product descriptions to sell on these platforms, which never returned results that could be easily shopped. Now all that’s needed is a quick pic and you have an entire catalog of the exact product you’re looking for at your fingertips.
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