A Wal-Mart Stores Inc. associate organizes school supplies at a Wal-Mart Stores Inc. location in the Porter Ranch neighborhood of Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
Nobody really knows what the back-to-school shopping season is going to look like this year — not retailers, parents, students nor teachers.
Anxiety is running high, and that could end up impacting sales, the timing of purchases and what people buy.
Sixty-six percent of parents are anxious about sending their kids to crowded classrooms again this fall due to the Covid-19 pandemic, according to an annual back-to-school survey by Deloitte, which surveyed 1,200 parents online from May 29 to June 5.
To be sure, a lot has transpired since then. Some schools have started announcing their plans to ease into reopening in the fall. Harvard University said Monday, as one example, that it will welcome freshmen and some other students to campus this fall semester, but it will be teaching all classes online, and those people on campus must be tested for coronavirus every three days. Tuition will not be lowered from $49,653, it said.
Needless to say, a lot of uncertainty remains. And overall retail traffic remains depressed compared with a year ago, with declines even accelerating still in some states, as Covid-19 cases are still on the rise.
The anxiety finds its source in several different places. Some parents are worried about their children falling behind academically. Only 43% of parents polled by Deloitte felt the recent at-home education their children received during the crisis prepared them for the next grade level. Schools across the country were shut earlier in the spring, thwarting in-person instruction. Many school districts had to scramble for back-up plans, frustrating teachers, as they quickly attempted to shift everything online.
New York City public schools started shutting down the week of March 15 to help curb the spread of the virus and never reopened. Gov. Andrew Cuomo said this week that there are still no plans in place to reopen in the fall, and no final decisions regarding in-person learning have been made. NYC's school district is the largest school system in the country, with over 1.1 million students in more than 1,800 schools.
Fifty-one percent of parents say they plan to increase their spending on virtual learning tools later this year, according to the survey by Deloitte, to try to supplement the at-home learning being offered to them.
"The anxiety is so high," said Rod Sides, the vice president of Deloitte's retail and distribution practice. "There has to be something to relieve the anxiety."
Other sources of anxiety include health and safety concerns, and finances. Thirty-eight percent of people indicated "high financial concern" regarding the upcoming school season, Deloitte said. The unemployment rate in the U.S. is currently 11.1%, with millions out of work.
According to Deloitte's survey, as of a few weeks ago, 43% of parents said they had yet to receive any communication from their children's current schools about the safety precautions planned for the fall. Roughly a quarter still didn't know when the first day of school is going to be.
Still, overall spending on the back-to-school season is expected to be about flat compared with last year. It is just the categories that parents are spending on that are shifting — with electronics seemingly taking a much greater share of wallet.
Total back-to-school spending in the U.S. is expected to amount to $28.1 billion, or $529 per household, according to Deloitte. That would be relatively flat from 2019.
A shopper wearing a protective mask walks past a sale sign at an American Eagle Outfitters Inc. clothing store at Westfield San Francisco Centre in San Francisco, California, U.S., on Thursday, June 18, 2020.
Michael Short | Bloomberg | Getty Images
Apparel spending, however, is set to drop 17%, while spending on tech items such as computers jumps 28%. Spending on traditional back-to-school items like notebooks and backpacks is expected to be down 18% year-over-year, the survey said.
With kids stuck at home, everyone is trying to go digital and make it work. Parents are turning to online tutoring platforms, educational games on the internet and other tools to try to keep students busy — even during the summer months, with many camps not in session.
That could mean good news for electronics retailer Best Buy, and other stores like Walmart and Target that are known for their wider assortments of tech devices.
Meantime, a dip in apparel spending would not bode well for department stores and other mall-based chains like Gap Inc., which owns Old Navy.
Parents are planning to spend 37% of their overall back-to-school budgets online this year, Deloitte found, up from 29% in 2019. More will look to shop closer to home and using contactless options like buy online, pick up in store, the survey said.
What about college?
Going back-to-college in the fall is playing out to be a similar story. Spending on decking out dorm rooms and stocking up on college supplies is expected to be about flat from last year at $1,345 per household, the survey found.
Notably, lower- and middle-income households are expected to tighten their budgets, Deloitte said. It is the higher-income homes keeping that number relatively even compared with a year ago.
"I think we've got a consumer who is hopeful," Sides said. "They are anxious, but there is a big desire to give their kids what they want."
Sixty-two percent of college parents are anxious about sending their students off to school, according to the survey, citing health and safety concerns.
A handful of colleges and universities have laid out their fall plans, with many embracing a hybrid model of both online and in-person learning.
In contrast with Harvard's announcement, some other Ivy League schools including University of Pennsylvania and Cornell University plan to reopen the majority of their residential halls and hold a handful of in-person classes.
Rutgers University said this week that its fall semester will feature a majority of remote classes and "extremely limited" on-campus housing.
As many families await to hear more about what learning will look like, analysts expect the back-to-school buying binge will occur later in the season, if at all.
"I think back-to-school may get pushed further back," said Stacey Widlitz, president of SW Retail Advisors. "Then retailers will get panicked when shoppers don't show up. ... But I think parents are just not going to open their wallets until they know."
That delayed spending behavior could then "snowball" its way into the holiday season, she cautioned, setting off a flurry of deep discounts that never ends. The back-to-school season is the second most important shopping period, annually, for most retailers.
"If back-to-school isn't good, everyone is going to start looking at their neighbors to see how they're doing," Widlitz said. "I think parents are going to be spending money in a lot of different ways this year."
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'The anxiety is so high': Going back to school won't look the same this year. Here's what it means for retail - CNBC
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