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Do Sluggish Sales Suggest the End of Back-to-School Promotions?

The pending arrival of autumn once signaled the smell of new books, fresh erasers and crisp clothing—but back-to-school shopping isn’t the big business it once was. According to Deloitte’s annual survey, Americans’ spending for children in grades K-12 and college combined is expected to remain flat this season at $1,747, compared to $1,766 last year.

“Consumers are sending a message to retailers that says the back-to-school shopping season (typically spanning July and August) just isn’t that important anymore—and that could dramatically disrupt an industry that traditionally relies on this defined period for a significant portion of annual sales,” Alison Paul, vice chairman and retail and distribution sector leader at Deloitte, said in a statement.

The survey pointed out that 38 percent of parents shopping for kids in K-12 said they replenish supplies throughout the year and feel less need to stock up, while one-third said they don’t plan to complete theirs until after school starts back. Furthermore, the number of consumers who plan to reuse last year’s items has risen from 26 percent to 39 percent between 2011 and 2015.

Paul added, “If consumers are content with the items they already have, the two-for-one promotion may no longer get them to the register. Instead, retailers will have to provide something more meaningful or exclusive that fits their customers’ needs when they are ready to buy.”

With that being said, is the second-biggest shopping event of the year losing its luster? Should retailers scale back inventory to avoid resorting to steep discounts to move merchandise?

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“Back-to-school isn’t what it once was because retailing isn’t what it once was and neither are kids,” Ryan Mathews, founder and CEO of Black Monk Consulting, said recently in an online discussion among RetailWire’s BrainTrust panel of industry insiders. But he was quick to note, “Retailers can’t cancel back-to-school quite yet, but they can begin evolving with the times, understanding that learning in the 21st century is an ongoing effort and that all of us have been recast in the model of perpetual students. So the need for the products has grown, even if the marketing of the products has not.”

Kevin Graff, president of Canadian training and consulting firm Graff Retail, agreed. “Kids are much more aware of what’s hot, new and must-have. That drives purchases throughout the year,” he said, adding, “The only real back-to-school push is for school supplies, so Staples and the like are about the only ones who I can see really benefitting in a big way.”

Meanwhile, Dick Seesel, owner of consulting firm Retailing in Focus and formerly of Kohl’s, said the “so-called surge of back-to-school business” turned into a smaller wave a long time ago. “It’s driven in part by national retailers in markets where schools open from early August to post-Labor Day. But in particular it’s driven by consumers’ long-established pattern of buying closer to need: When your child outgrows her Nikes, it doesn’t matter whether it says March or August on the calendar,” he said.