By: First Union
What Will Back to School Look Like This Year for Retail?
With school openings across the country in question, no one is certain what the phrase "back to school" will even entail this year. And for retailers, this is becoming a point of anxiety for many. It's understandable given that the back to school rush is one of their most profitable times of the year.
In a recent survey, it was found that nearly seventy percent of parents were very worried about sending their kids back into the classroom. And while yes, many schools are beginning to announce reopening plans and outlining the respective guidelines, this is not necessarily allaying fears. In light of parental concern and anxiety in general, the overall retail picture right now is way down from where it was this time last year.
Of the parents surveyed, fifty-one percent say they intend to invest in more virtual learning tools and technology this summer in preparation for potentially keeping their child at home. That said, parents are diligently watching the schools to see how they are going to respond. And 43% of parents have said that they have yet to receive solid guidelines from their respective districts. Roughly a quarter of parents responded that they had no idea when the first day of school was going to be.
What parents are going to be prioritizing and subsequently buying for the upcoming school year will be shifting compared to trends of other years. Electronics stands to see a sharp increase in sales as the school year approaches. Total spending for 2020 back to the school year is projected to average just over $500 per household, a number that is much lower than that which was spent in 2019.
For retailers of apparel, predictions are not good. Most experts see anywhere from a 15-20% decline in apparel sales. This is down significantly from where sales should be for back to school spending on clothes and other such items. Stores such as Gap and Old Navy are likely going to take a major hit, and with department stores of this nature already struggling against larger online retailers, the path ahead is uncertain, to say the least.
Again, the retailers who stand to gain this season are those selling electronics and tech products. Best Buy, Target, and Walmart for example are gearing up for more robust computer sales. They are going to need to stock up to keep devices on the shelf as people try and navigate a confusing back to school period. The survey found that parents anticipate spending nearly forty percent of their budget for back to school items online this year. This will send many retailers into a new survival mode as they try and pivot to adjust to this new normal.
First Union Lending is here to help. If you need additional cash to get through this challenging time, we can get you the money needed ASAP. Our lines of credit and short term loans are designed with small business owners in mind. Call today!