As Clock Winds Down, Back-To-School Shoppers Still Wrapping Up Shopping Lists

August 20, 2014

Recognizing that a number of the best deals of the summer are still to come, some families have only scratched the surface of their back-to-school shopping lists as of mid-August.  According to NRF's latest Back-to-School/College Surveys, the average family with children in grades K-12 completed just half (49.9%) of their shopping by that time, down slightly from last year (52.1%).

"As the shopping season draws to a close, budget-conscious parents are likely hoping that end-of-summer sales and promotions will be just what they need to wrap up their school lists," said NRF President and CEO Matthew Shay.  "Much of the delay this summer could also stem from families holding out for a sales tax holiday in their state, as well as from influential teenagers who want to first see what their friends are buying before they ask mom and dad to commit to their fall needs."

According to the survey, as of August 12, fewer families had stepped out to take advantage of retailers' special school savings opportunities; specifically, one-quarter (23.6%) had not started shopping yet, up from 20.9 percent last year.  However, there were some who were eager to get started as they looked to spread out their spending: 15.7% say they have completed their lists, which is about the same amount as last year.

College families on the other hand, got a good jump on retailers' sales and promotions this summer: 23.4 percent say they are completely finished with their lists, up from 20 percent last year.  Additionally, slightly fewer families this year say they haven't started shopping (26.2% vs. 28.8% last year).

Hoping to trim the costs where they can, some back-to-school shoppers made it a point to look for coupons and sales while scouring for new footwear, supplies, electronic items and apparel.  And, according to the most recent survey, 15.2 percent of back-to-school shoppers said 100 percent of their purchases were influenced by coupons, sales and promotions, the highest percent since 2011; 14.8 percent of college students and their families say 76-99 percent of their shopping was influenced by coupons, also the highest for that range in the survey's history.

In July, NRF found eight in 10 (81.1%) families with children in grades K-12 said the state of the economy would impact their school spending in some way; seven out of 10 (77.2%) college students and their families agreed.

In the survey, when asked what payment method back-to-school families used most often to purchas school necessities, 44.9 percent say they have or will use their debit cards more than cash (24.9%) and credit cards (27.9%).  College students and their families have or will use debit cards (43.4%), followed by credit cards (33.7%) and cash (18.9%).

To wrap up their lists, most back-to-school shoppers will shop at discount (54%), department (47.7%) and clothing stores (35%), and online (24.8%).  One-third (33.7%) will visit an office supply store and 10 percent will shop local and support small business.

Back-to-college shoppers will finish their shopping at discount (47.4%), department (40.3%) and clothing stores (26.8%).  The most in the survey's history - 37.4 percent will wrap up their lists online.

School Requirements for Supplies, Electronic Purchases

To gauge the level of influence a school may have on both back-to-school and college shoppers' intentions to buy supplies and/or electronics, NRF asked parents this year about specific course/school requirements.

According to the survey, nearly one in five parents (18.2%) say that 100 percent of their back-to-college electronics purchases were influenced by course/school requirements.

For back-to-school families, whose lists often include supplies needed for the classroom, 21 percent of parents say that 100 percent of the supplies they buy are influenced by classroom and school requirements.  When it comes to electronics, 16.4 percent said that every electronic item they buy is influenced by classroom lists and school requirements.

"As schools look to parents more and more to help fund classroom needs, parents are looking for as many ways as they can to cut costs, and that could very well be why we're seeing more people seek out coupons and sales this summer.  Low prices at the end of the season will definitely drive more college and school families to shop last minute, especially for those with specific items they need in order to start the school year."

Source: National Retail Federation

Top 2014 Back-To-School And College Trends

Source: National Retail Federation

Housing Recovery Spurs Home Improvement Spending

Worries over jobs, the economy and fiscal policy uncertainty have left consumers spending cautiously, prioritizing long-term goals and improvement projects, according to the Chase Freedom Lifestyle index report released on October 30.

Spending on home improvement and self-improvement saw year-over-year spending increases in Q3, while consumer electronics and office supplies saw the biggest declines in spending.  Home improvement spending rose 4%.  The housing recovery and increase in home values likely prompted consumers to increase their spending on remodeling and other improvements to their dwellings.

Craft stores saw the biggest surge in spending during the quarter with a 91% increase, a sign of "continued strength of do-it-yourselfers who may be buying a home or remodeling their current residence."  That is good news for home improvement retailers such as Home Depot and Lowe's, and hardwood flooring retailer Lumber Liquidators, which likely got their fair share of spending during the quarter.

Deep discounters such as Dollar Tree, Dollar General and Five Below, as well as Walmart and Target, which sell materials for arts and crafts, aldo tapped into some of that home improvement spending.

The index also shows that consumers are committed to self-improvement resolutions made earlier in the year, reflected in year-over-year spending increases on books at 6% and sporting goods at 5%.  Book sellers Barnes & Noble and Amazon.com likely captured some of those dollars.  Sporting good retailers such as Dick's Sporting Goods and athletic apparel outfits like Nike, Under Armour and Lululemon probably also benefitted from that spending.

Office supply and consumer electronics spending slipped 7% vs. a year earlier.  That is not good news for retailers like Staples and Best Buy - which is in the midst of a turnaround.  However, the report notes that the decline in spending on consumer electronics might be "a sign of calm before the holiday spending storm."

The Chase Freedom Lifestyle index is a quarterly barometer of consumer trends based on aggregated Chase Freedon cardholder spending.  Chase is the retail banking business of JP Morgan Chase.

Source:  Investor's Business Daily, www.investors.com

IT No. 1 priority for retailer spending

According to the 2012 Retail Outlook Survey, 77% of retail executives indicate that their companies have significant cash on the balance sheet – up from 72% in KPMG's 2011 survey – and 56% say their companies' cash positions have increased from last year.  So,what do retail execs plan to do with their cash?

58% of retail executives plan to increase capital spending over the next year. The highest priority investment area is information technology – including data analytics and digital marketing channels – cited by 51% of the executives in the KPMG survey.

Executives say that the use of data analytics is playing a larger role in their strategic decision making – including areas such as customer insight, brand and product management, pricing decisions and market expansion.

"With consumer behavior, spending and demographic profiles changing rapidly, a key to success will be investing in technology to harness the vast amount of data that resides in a company. That data can drive the insights that will allow retailers to interact with consumers more effectively and capture more 'wallet-share.' It may also reveal information on new markets, new strategies and new operating models that will ultimately generate growth and profitability."

Other significant areas of investment for retailers are new products or services (43%), geographic expansion (33%), and advertising and marketing (24%).

When asked about digital marketing channels, retail executives in the 2012 KPMG retail survey indicate that online shopping (59%), social media platforms (58%), and email campaigns (49%) are having the most significant impact on their businesses. Additionally, executives indicate that the incorporation of mobile technology is also having a significant impact, specifically mobile shopping (36%), mobile promotions (28%), and mobile payments (21%).

Quotes - Mark Larson, KPMG global retail leader

Source: retailingtoday.com

Warm weather gives apparel retailers and department stores a boost in March

The warmest March in North America in more than 50 years resulted in many apparel retailers and department stores registering solid gains in March, as an early spring brought out shoppers looking for seasonal merchandise earlier than they typically would. 

Macy’s, Kohl’s Corp., Limited Brands and Gap Inc. were among the retailers who topped analyst estimates.

Macy's said that its same-store sales climbed 7.3%, outpacing the 4.8% increase predicted by the Street. The company also raised its forecast for the key revenue metric for the combined March and April period, citing its strong March results.

Macy's, which includes online sales in its calculation of the key monthly revenue figure, said that it benefited from an earlier Easter and moving a cosmetics event to March from April last year. Total revenue for the five weeks ended March 31 increased 6.9% to $2.36 billion.

Limited, parent of Victoria's Secret and Bath and Body Works, said its same-store sales in March rose 8%, topping Wall Street expectations.

Gap Inc. reported a 10% increase in same-store sales in March, benefitting from customer response to its new merchandise. By brand, Gap North America’s sales rose 9%,  Banana Republic North America’s sales were up 5% and Old Navy North America saw its sales climb 11%. International sales were up 2%.

“We delivered solid sales performance in March and are pleased with customer response to product across all brands,” said Glenn Murphy, chairman and CEO of Gap.

Kohl’s credited warmer weather and an earlier Easter with helping to boost its same-store sales in March by 3.6%. Analysts had expected an increase of 2.1%.

Saks Inc. said its same-store sales rose 6.3% in March on strong demand for contemporary apparel, accessories and other items. The results matched average Wall Street predictions.

At The Buckle, same-store sales in March rose 6.4%, less than Wall Street had expected.

In other apparel same-store sales results for March,  Zumiez same-store sales rose 14.1%; The Wet Seal reported a 7.8% decline; and Cato Corp.’s sales increased 7%.

Source: retailingtoday.com