Summer may officially be a week away, but retailers are already looking ahead to fall and the back to school shopping season, which is expected to be strong. eMarketer sees back to school retail sales growing 4.6% to $857.2 billion this year, compared with 2016 levels.
Back to school is big business for radio stations that count on heavy messaging from retailers, office supply stores and consumer electronics companies to fill the airwaves in late summer and early fall.
Back to school will account for 17% of total retail sales for the year, eMarketer says.
E-commerce will play a sizable role in total sales, accounting for 8.6% of all back to school purchases. With many parents opting for the convenience of online shopping, internet back to school spending is expected to be up 14.8% to $74 billion this year.
“E-commerce growth this year comes on top of a strong year in 2016, making it that much more impressive,” eMarketer senior analyst Yory Wurmser said in a report. “Younger consumers that shop in preparation for going back to high school and college actually prefer shopping online, so e-commerce growth should continue for the foreseeable future.”
While spending is projected to be robust, retailers and radio stations alike always have trouble pinning down the timing of the back to school sales rush. Unlike the holiday shopping season, which traditionally kicks off after Thanksgiving and runs through Christmas, back to school is a moving target. Some shoppers buy early, while others wait until the last minute or even after classes start to make purchases. Also, the school calendar varies by region, with students in some states returning to school as early as the beginning of August, while others do not start until after Labor Day.
In another wrinkle, Amazon now offers its prime service to any customer on its so-called “Prime Day” in July, which generates some back to school sales, and several states have tax holidays in the summer that influence shopping decisions. These factors make it challenging for retailers to target national advertising and forecast the market, and can similarly impact radio stations’ sales strategy and planning. Even eMarketer’s forecast could be influenced by the timing; the research firm projects its numbers based on July and August data, but many shoppers could make school purchases in September.
“Back to school is hard to get a handle on. It’s always there but traditionally hasn’t been as big as it was years and years ago because the school cycles are different,” RAB president & CEO Erica Farber told Inside Radio. “But sure, we get a bump from it.”
After slumping in 2015, back to school retail sales recovered last year to hit $824.6 billion, eMarketer says. Five categories comprise the bulk of back to school sales: apparel; books, music and videos; computer and consumer electronics; office equipment and supplies; and toys and hobbies, including sporting goods. Home goods are not included in the forecast, despite home products being an integral part of college-related purchases.
“There are now waves that define the back to school season, keeping pace well beyond the traditional August close,” Analytics firm NPD Group analyst Marshall Cohen said in a recent report. “These shopping waves come in and go out, with a number of key periods when consumers focus on building out different parts of their back to school needs. Retailers that prescribe to the old calendar will be selling themselves, and the back to school season, short.”