Retailers Are Banking Big on Back-to-School Shopping

Retailers across the country are counting on a robust back-to-school season to boost their bottom line. Total spending for kindergarten through college is projected to reach $82.8 billion, just shy of last year’s record $83.6 billion, according to the National Retail Federation’s annual survey (conducted by Prosper Insights & Analytics).

“With the economy thriving, thanks to tax reform and growing consumer confidence, we expect to see a very strong season,” said NRF president and CEO Matthew Shay.

Families with children in elementary through high school plan to shell out an average of $684.79 each for a total share of $27.5 billion. It’s the third-highest total in the history of the survey, following a peak of $30.3 billion in 2012.

And there’s even more good news for footwear retailers in particular: While spending on certain items such as electronics and clothing is expected to dip slightly, back-to-school shoppers will allocate $138.66 of their budget to new shoes, an increase of $8 from last year.

“The environment for back-to-school is pretty good, especially compared with some prior seasons in not-too-distant memory. The macro backdrop is solid — second-quarter GDP was up roughly 4 percent, and consumer [spending] was notably strong within that. We could complain about gas prices, but other factors seem to be offsetting this,” said Jeff Van Sinderen, senior analyst for B. Riley FBR. “As always, there will be promotions and discounting, but retailers have better-controlled inventory levels than past years. Brands have reinvigorated product.”

At Foot Locker, premium sneakers are one hot trend that’s expected to fuel sales, according to president and CEO Dick Johnson. “We continue to see heat around styles like the Nike Max Era, Adidas Ultraboost and Nike Epic React Flyknit,” he said. “We’re seeing a slight improvement in basketball, but it’s the running styles that are driving the business.”

Another trend that’s resonating is the chunky midsole. “Product like the Fila Disruptor is very of-the-moment,” Johnson said, also citing Vans, Reebok and Converse among the chain’s strong performers.

To build excitement around the season and engage with consumers, Foot Locker is hosting activations in key stores around the world.

Athletic looks are also ringing the registers at Rack Room Shoes, although president and CEO Mark Lardie said other trends are emerging. “The footbed sandal, the boat shoe, stylish canvas styles and even dress shoes are starting to show increases again,” he said.

Overall, the Charlotte, N.C.-based chain anticipates brisk sales. “Consumer confidence, rising household incomes and trend-right, accessibly priced assortments from our brand partners are all contributing factors,” Lardie said.

Famous Footwear is projecting its seventh consecutive year-over-year sales increase for back-to-school. “We’ve placed big bets on key products and brands, with the expectation that we’ll dominate in the most important items of the season — among them Nike’s Tanjun and Benassi sport sandals, Adidas’ Racer sneakers, Converse Chucks and casual sneakers from Roxy and Blowfish,” said president Molly Adams, who also called out Birkenstock, Under Armour, Puma, New Balance and Vans.

Adams noted that in a growing trend, shifting shopping patterns are lengthening the season considerably. “Customers continue to shop closer to the time of need, right up to when school starts and even after school begins as kids see what everyone else is wearing and find out any special footwear requirements for their various activities,” she explained. “Factor in a variety of different school start dates plus tax-free weekends in many states, and it makes for a fluid calendar that keeps retailers on their toes.”

Although large sellers will capture the biggest share of business, independents are fighting hard to win shoppers’ dollars. At Tip Top Kids in New York, manager Margot Wasserman said she is focused on boosting foot traffic by stepping up the store’s social media presence, utilizing email blast promotions, organizing special events such as shoe-tying classes and even personally calling shoppers.

“We’re trying to connect more with our customers,” she noted, adding that Nike, Ugg and Naturino have been hits. Wasserman said athletic looks, both fashion and performance, continue to perform. “Even casual shoes and fashion styles like boots have sporty bottoms now,” she said.

Like Tip Top, Oakland, Calif.-based GoldenBug Children’s Shoes, which opened for business in February 2017, is planning for strong gains. “This is our second back-to-school, and we expect to double last year’s numbers. Even during the slow month before [the season] really kicks off, we’ve seen a healthy increase,” said owner Emily Goldenberg. “Nearly every new parent that walks in our door tells me how grateful they are that there is finally a local sit-and-fit option for kids.”

Goldenberg is bringing in several new brands, among them Palladium, Naturino and Blundstone. She is also beefing up her buy with customer favorites such as Tsukihoshi.

Still, while retailers are optimistic, some analysts are urging a more cautious outlook, citing the White House’s $500 billion in new tariffs and an aggressively promotional climate. “The 2017 back-to-school period was the most promotional in history, and so far, I am not seeing a pullback on early promotions this year,” said Matt Powell, senior industry adviser for The NPD Group Inc. “Also, the tariffs are concerning. They are essentially a tax on the American people, which will raise prices for all and hurt consumption.”

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