Credit: Shutterstock photoThe recently concluded back-to-school season saw retailers fighting neck and neck to lure customers to their stores. With more money in their pockets, teenagers and parents were willing to splurge, unlike this time last year, when this key shopping time after the holiday season saw lower-than-expected sales.
Sales were upbeat this July and August as more confident consumers were lured with heavy promotional discounts. Note that Consumer Confidence - a key determinant of the economy's health - improved significantly to 101.5 in August from July's reading of 91.0, as per the Conference Board data. Comps of these retailers jumped as well, and a market research survey conducted by firm Profitero confirmed that back-to-school shopping surged 14.4% year over year.
E-Commerce the New Key
E-commerce is clearly the key to commerce now. Smartphones have invaded the world and retailers have found places inside buyers' purses. Social networking influences consumer decisions and promote new products. More than 40% shoppers are now shopping online compared to only 10% in 2010.
As per data released by technology and data company Engagement Labs on Aug 7, 2015, Hollister Co. is ranked as the top performing retail brand on Instagram on the basis of engagement of their customers in the social media. Nordstrom Inc.JWN created a successful social media presence that helped it to occupy the number one position on both Facebook Inc.FB and Twitter Inc.TWTR .
Further, younger shoppers are more likely to compare prices by using their mobile devices. The National Retail Federation data shows that 88% of back-to-school shoppers own smartphones, out of whom a sweeping 80% use their handsets for shopping.
Leaving No Stones Unturned
National Retail Federation data, released in September 2015, reveals that Amazon.com Inc.AMZN was the most popular shopping site among all age groups. Per Profitero, Amazon's prices were lower than both Target StoresTGT and Wal-Mart Stores Inc.WMT . The online seller also performed well in computer and accessories, fashion wear as well as office products.
Although, Target was the least competitive in terms of prices, it made up for its higher prices by waiving shipping fees from early to mid August.
Extended Back to School Season
Prompted by the shopping spree, the Back-to-School season was started at an earlier date than ever, no doubt supported by retailer marketing and promotions. Per the National Retail Federation data, almost 20% shoppers started their online B2S shopping two or more months before the start of the school year.
The shopping binge is expected to extend further into September, even after brick and mortar discounts end in August. College shoppers are delaying their shopping - waiting until it is absolutely necessary to fill up their shopping cart with their college needs. These shoppers are expected to opt for off-price retailers for their last-minute purchases.
Bottom Line
When it comes to shopping, we wonder how much a sluggish China or an uncertain Fed really matters. An improving consumer index and low gas prices were enough to loosen purse strings. And with more stuff to be filled in the carts over the Labor Day weekend, retailers might expect further good news, near-term.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
