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Could Back-to-School Be the Business Boon Retail Has Been Waiting For?

Retail may be in the depths of a long, hard slump, but one bright spot has shone through the bleakness of the past few months: kids are still growing, and their rapid shape-shifting requires a constant influx of new clothes and shoes.

With back-to-school season around the corner, parents and teachers are waiting with bated breath to see if young folks will indeed return to physical classes. The answer, which will vary by state, could provide valuable cues for retail businesses in communities across the country.

But even though many children have been distance learning since March, spending on kids’ gear hasn’t waned. While adults are absolutely buying less apparel for themselves, there’s little evidence to show that kids are going without.

In fact, according to data from NPD Group from March through May, kids’ apparel captured more spend than it did a year ago, accounting for nearly 17 percent of all clothing sales. Those dollars shifted from women’s and men’s apparel, which contracted by three points collectively, NPD public relations director Janine Marshall said.

“While there are so many unknowns for the upcoming school year, there are a few things that are a safe bet,” Marshall told Sourcing Journal. “Comfort and casual will continue to dominate over the next few months, and kids will continue to grow.”

Clothing that embodies these two attributes is where parents will invest their dollars when it comes to preparing for the next school year, she said.

During the period between July 10-13, NPD polled parents and grandparents about their spending plans for the next few months. More than half of respondents (57 percent) said they did not plan to buy top back-to-school fashion categories, but those who said they were planning to shop noted tops and sneakers as their targets.

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Kids’ footwear outperformed adults’ by a wide margin in the second quarter. Children’s shoes declined just 7 percent from the year prior, while the adult footwear market contracted by 26 percent, said Beth Goldstein, NPD’s executive director and industry analyst for accessories and footwear.

The relatively strong performance of children’s footwear was driven by sport lifestyle sneakers, Goldstein said. The launch of new Jordan styles in conjunction with the release of The Last Dance, a documentary miniseries chronicling the baller’s time playing for the Chicago Bulls, likely contributed to that spike.

And, predictably, kids are still loving Crocs. An ever-growing roster of pop-culture collabs and an addictive array of Jibbitz (which adorn the homely foam clogs) make the practical footwear irresistible to Gen Z and Generation Alpha.

One kids’ footwear category that has suffered is dress, Goldstein said. “Easter was spent in quarantine and many other spring-summer events were canceled,” she said. While retailers can count on kids outgrowing their shoes, the timing of buying replacements will likely shift this year based on immediate needs.

“Back-to-school performance and cadence will depend heavily on physical school reopening plans, which are still in flux,” she added. “And, while outdoor activities will be popular this summer, sneakers may not be as worn out as they typically are after a summer in camp.”

Matt Powell, NPD’s vice president, senior industry advisor for sports, remains “pessimistic” about the back-to-school outlook for the athletic footwear sector. “This back-to-school season will be unique in a number of ways due to the marketplace, economic, and behavioral shifts brought on by the pandemic,” he wrote in a July 21 Sneakernomics blog post.

“I don’t expect the sports retail business will hit the depths of March and April, but the highs of June will soon be forgotten,” Powell added, referencing a spending rebound last month that he largely attributes to pent-up demand and consumers eager to spend coronavirus stimulus checks.

Meanwhile, Goldstein expects to see some contraction in another major category: backpacks. Bookbags and carry-alls grew by double digits during August of last year, she said, setting the stage for a softer performance in the year ahead. “Since kids’ don’t grow out of backpacks as quickly, a backpack from last year or the year before might suffice, especially since it likely wasn’t used for the full school year or for camp,” she said. “Retailers will need to stay on top of school opening plans and execute marketing strategies at a local level.”

Edited market analyst Kayla Marci noted that despite fewer new product arrivals in stores—and a predicted drop in apparel spend across the board—new items for school-age children have sold through well online since the beginning of May. In fact, this year’s sales outpaced those from the same period in 2019 by 36 percent, “indicating there is still consumer demand for newness in this category,” she said.

However, Marci said, retailers are discounting a higher proportion of products this time around, likely in an effort to liquidate spring inventory. The absence of Amazon’s Prime Day—which has been postponed from its usual date in July—could be driving the increase of sell-outs, she said. Without having to compete with the marketplace’s massive sale, children’s apparel brands have the full floor to hawk their wares.

Subscription services are taking pains to remind harried parents about their convenient, socially distanced and time-saving services.

“Parents have their hands full now more than ever,” said Ezra Dabah, CEO of kidpik, a children’s subscription clothing program. “We’re happy to make life easier by bringing the store to their home and creating a safe and effortless way to shop.

“Kidpik lets you try on outfits from the comfort of your living room and only pay for what you keep. No more challenges trying to find the right outfits, colors and style with trips to the store or endless hours spent shopping for clothes online,” Dabah added. “You tell us a bit about what your child needs and loves to wear and we’ll coordinate outfits and deliver them to you risk-free.”

Children’s apparel rental platform Everlasting Wardrobe—which launched in January with 300 brands for kids ages 6 months to 12 years—has also seen increases in its monthly membership since the pandemic began.

While 2020 would seem an inauspicious moment to start a new business, co-founding CEO Joshua Luft said parent sign-ups are on a steady upward trend, and brand partners also continue to see consistent purchases from their own sites. After a recent influencer-led marketing campaign, one brand’s SKU sold out within 72 hours of posting, he said.

“Our Wardrobes are curated for the next month’s wear, so we have yet to see how an entire year of virtual school further changes their style,” he added. But a comparison of current company data with stats from the beta testing that took place this time last year reveals “an uptick in comments mentioning sweatpants, or clothes that prioritize function and comfort,” Luft said.

While the service’s recommendation engine—which takes into account regional weather patterns—would normally filter out these SKUs based on the hot temperatures across the country, many parents have asked for these items for “long days playing inside,” he added.

The biggest shift in consumer behavior has been a reduction in requests for special-occasion items, Luft said. While the company doesn’t yet order short-term, one-piece rentals (a la Rent the Runway), Everlasting Wardrobe stylists do try to accommodate asks whenever possible. But this season, those requests have dwindled.

“Members have most often left these comments for upcoming back to school, picture day, and holiday time Wardrobes,” Luft said. “Early March was the last notable amount of requests we received, and that was in preparation for Easter.”

In assessing member needs for times still spent mostly at home, Luft said, “Every family’s day runs the gamut.”

“Feedback ranges from ‘PJs all day’ to ‘It was a four-outfit day’,” he said. “There seems to be no day-to-day constant.” That’s because kids are fickle, Luft said, refusing to wear clothing for any number of reasons.

Whether they’ve grown out of something or simply don’t like how it feels, parents are constantly on the hook to deliver options their kids will find palatable. Even during these strange times, he said, having new selections every month helps.