According to the National Retail Federation’s (NRF) annual survey, consumers plan to spend record amounts on school and college supplies. Students and their families will also return to classrooms this fall according to Prosper Insights & Analytics.
According to the NRF, families with children in elementary and high school will spend on average $848.90 for school supplies, $59 more than last school year. The record $37.1 billion in back-to school spending is expected, an increase of $33.9 billion from last year and a new high in the survey’s historical history. The average college student and their families will spend $1,200.32 per year, an increase of $141 compared to last year. More than half (80%) of this increase can be attributed to higher spending on electronics and dorm furniture. The record-breaking $71 billion is expected to be spent on back-to-college, an increase of $67.7 million in 2020.
About 43% of shoppers indicated that they would use stimulus money from the government to buy school supplies.
The survey found that more than half of college and K-12 shoppers had started shopping for items by early July. However, 76 percent of K-12 shoppers remained on waiting lists for school supplies earlier in the month.
Total Retail’s View: Another good news is that the NRF reported last week that retail sales experienced solid growth in June. They increased across all categories on a monthly and yearly basis, as the recovery from coronavirus continued. The NRF calculated retail sales, which excludes gasoline stations, automobile dealers and restaurants to concentrate on core retail, and showed that June’s retail sales were up 0.8 percent year-over-year and 12.1 percent unadjusted from May. This compares to a decrease of 1.9% month-overmonth and an increase of 16.5% year-overyear in May. Although the June increase was higher than economists expected, it followed a smaller than originally estimated May decline. After a surge in spending earlier in the year, spending slowed in spring. The June increase was a sign of an upturn in spending.
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Prime Day: What it Taught Us About Supply Chain, Back to school, and Holidays
Managers of merchandise facilities are struggling to make ends meet this year due to labor shortages, a lack of shipping containers and low air freight capacity. This has resulted in major inventory backlogs at brick-and-mortar stores. These ripple effects are due to the pandemic that temporarily shut down factories around the globe.
This reality was a stark reminder of the U.S.’s biggest e-commerce platform. It was also supported by major retailers like Walmart, Kohl’s and Best Buy. Global shipping issues impacted small and medium-sized Amazon sellers who depend on international imports. Additionally, shipping costs rose and there was less product inventory, making deals less appealing than Prime Days in recent years.
All retailers should take the lessons from these early summer issues to be ready for Back to School season and holiday shopping season. This will maximize return on investment when vaccinated customers go back to stores. These are some lessons learned from Amazon Prime Day.
Data should be brought to the attention of the C-Suite
Retail executives should be interested in data about store operations if they haven’t. They must be focused on the use of data to predict and manage costs to maximize profits over the coming months. Data should be the key to in-store management, regardless of whether it’s maximising contractor value or documenting sanitation compliance.
Data intelligence can also help the C-suite make more money by making their stores more efficient. Multilocation brands can take this situation, where everything is more costly due to a blocked supply chain, as an opportunity to increase their ability to discover operational costs through digitized, precise, and data-driven systems.
Retail executives often ask their store managers for cost savings by reducing costs like returned products. Executives should be more attentive to back-office costs than treating them as an afterthought. Is it possible that we are overpaying the contractor who repairs our homes? Are there ways to cut down on energy consumption by avoiding wasteful practices? Is it really necessary to service our HVAC four times per year? These questions can be answered by retail executives using data and technology to uncover hidden costs that will help them make a bigger profit with their multilocation brands in the months ahead.
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Managers Need to Plan
We can see from this summer’s deals days that prices are rising, products are scarce, and help is difficult to find. Multilocation retailers must secure labor, parts and contractors as soon as possible.
Retailers need to plan ahead rather than being caught up in the eight ball. The skilled contractor they require right now is booked up for three weeks. Executives should send a memo containing this call to action, which will be seen by the head of realty, procurement director, and CFO.
Prime Day revealed that the global supply chain has not recovered from COVID-19’s reverberations. For the moment, retailers will be hurt by price increases and product shortages. Consumers will also likely spend less because everything, from chocolate boxes to bicycles, is more expensive this year.
The pandemic caused last year’s holiday and back-to school seasons to be unusual. The rest of 2021 is much more promising due to the return of normal activity by vaccinated people, but Prime Day taught us that retail executives must use data to help them plan ahead and to mitigate the impact of any lingering supply chain issues.