business news in context, analysis with attitude

by Kate McMahon

The last flash of Fourth of July fireworks once marked the peak of summer. Now it signals the start of the back-to-school (BTS) shopping season and a ramped-up battle between e-commerce and brick-and-mortar heavyweights.

A new report from the market-research firm NPD Group found that there are now shopping “waves” and stand-alone events that define the BTS season, second only to the winter holiday season for retail sales revenue.

I’m in complete agreement with NPD chief industry analyst Marshal Cohen, who concluded retailers that “prescribe to the old calendar will be selling themselves, and the back-to-school season, short.”

The first wave has already begun online, with anxious almost-freshman and other college students perusing options for Twin XL sheets, electronics, mini refrigerators and clothing. Both Target and Bed Bath and Beyond are aggressively courting this market, with shopping checklists and registries on their sites and delayed shipping/pick-up options. Look for Best Buy to challenge Amazon and Walmart on prices for tech and electronics.

The tsunami of a stand-alone event will hit Tuesday July 11th - the third annual Amazon Prime Day, offering summertime Black Friday-style discounts to members of its $99-a-year Prime shipping service. Last year’s Prime Day set a one-day record for Amazon sales, and this year’s 30-hour event which debuts at 9 p.m. ET on the 10th is expected to eclipse that number.

The firm eMarketer predicts those two factors will help boost e-commerce 14.8% to $74 billion, representing about 8.6% of total retail sales during the two-month BTS season.

While Amazon has only released a handful of the deals that will be available on Prime Day, one clearly targeted toward the college market is the chance to get four months of Amazon Music Unlimited, normally $7.99 a month, for just 99 cents.

The NPD report said three other waves will peak later in the season, as parents shop for younger children in August, stock up on bulk items once school lists are sent, and return to stores right after school starts for different clothes and sneakers (hopefully on sale) after kids react what their classmates are wearing. The National Retail Federation (NRF) last year said families with children in grades K-12 planned to spend an average $637.57 on apparel and accessories, electronics, shoes and school supplies.

It’s important to note that parents will also be comparing prices online for staples such as backpacks and sneakers in determining when and where to shop.

Other stand-alone factors impacting sales are the tax-free shopping holidays in certain states, ranging from two days in Mississippi (July 29-29) to the week of August 20th in Connecticut.

The challenge for brick-and-mortar stores is giving shoppers a reason to come in to shop when so many BTS items are available with one click on a mobile phone app.

JC Penney is attempting to do just that. The retailer last month launched stand-alone “dorm shops” in 500 of its stores to get a bigger piece of the $6 billion dorm furnishings market. Each curated shop will also feature electronics and houseware items. The chain also is pledging an omnichannel approach, telling customers that they can buy in the store or ship to the JCP store closest to a particular campus. A promising idea, but all contingent on actually getting college students to shop in the store vs. their phone or laptop, an especially difficult proposition when the store in question is JC Penney.

The more I think about it, the more I believe that among the winners this BTS season will be devices such as the Echo and Dot linked to Amazon’s Alexa virtual assistant system. I think they'll be a mainstay on college shopping lists, right up there with storage containers, pillows and surge protectors.

There is little question that Alexa will be a welcome addition to any dorm room. Not only can she act as an alarm clock and answer basic homework questions, one command to an Alexa device can accomplish a most important task for any college kids – ordering pizza from Domino’s or Pizza Hut.

Or buying supplies, clothing, or even food from another retailer: Amazon, which seems to have a lot of built-in advantages in this ramped up battle.


Comments? As always, send them to me at kate@mnb.grocerywebsite.com .
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