Shifting Back-to-School Landscape Encourages Retailers to Act QuicklyAugust 23, 2019
Back-to-school season is in full swing and initial sales results have been rolling in. Unfortunately, this year’s back-to-school investment is expected to be down, with shoppers primarily being motivated by discounts. These shifts may be related to the fact that consumers are shopping at new places, sometimes as a result of closures to their favorite stores, such as Children’s Place. Providing another challenge, the trade war fallout and latest round of apparel tariffs are also leaving many retailers anxious over the shopping season.
Back-to-School Early Results Are in
In July, NRF and Proper Insights & Analytics released their annual survey, which found families planned to spend an average of $696.70 on back-to-school shopping. In early August, consumers had completed just over half (54%) of their shopping, with 59% still in need of clothing and 45% still shopping for shoes.
Despite these trends, UBS’ retail analysts expected a different forecast this year, predicting sales of clothing and apparel at retail stores in the U.S. to be down 0.9% year-over-year in August and September and down 0.5% in October.
This drop may be a result of the fact that consumers are heavily deal driven. NRF found 51% of all school-related purchases to have been influenced by sales and promotions. Further, roughly three in 10 shoppers said coupons or promotions would drive them to shop with a specific retailer.
The Trade Fallout and Recent Closures Impact the Shopping Season
A recent Sourcing Journal article revealed the way shifts in the trade fallout and latest round of apparel tariffs are impacting the retail environment, encouraging retailers to enter planning with caution. Some retailers are stocking up on inventory, while others are seeking price cuts from suppliers and diversifying their sourcing outside of China. (These trends and others were recently detailed in our blog post regarding trade uncertainties.)
Additionally, bankruptcies of retailers such as Gymboree and Children’s Place reflect a shift in consumer shopping preferences, according to a recent article in CNBC. Many families are searching for apparel at places like Target, Walmart and Kohl’s instead, looking for ways to stretch their shopping dollars. Despite these shifts, NRF still expects 53% of parents to go to places like Macy’s, Nordstrom and J.C. Penney, whereas 45% plan to go to a specific clothing retailer.
Overcome these Back-to-School Challenges with NGC
Retailers can help address these challenges with digital solutions. For example, NGC’s cloud-based Andromeda Supply Chain Management solution maximizes transparency and helps retailers optimize their supply chain, mitigating some of the impact of the trade war. Andromeda Vendor Management can help retailers onboard vendors quickly and effectively, giving them the sourcing agility they need in an uncertain time.
The quickly shifting market forces retailers to continually move faster to respond to changing consumer demand. Consumer sentiment is fickle, and retailers must make fast, accurate decisions in order to make the most of peak shopping seasons such as back to school and the upcoming holiday season.
To learn more about how NGC can help you address the shifting back-to-school season, request a demo here.