Sixty percent of parents plan to use their mobile devices for back-to-school shopping this year, while Amazon is projected to capture 25% of the $17 billion increase in back-to-school sales. If retailers do not begin focusing as much on the digital experience as bricks and mortar, it could be a hard lesson.
Call it the new math of consumer shopping behavior. Divide $540 billion in potential spending by 60% of parents with mobile phones, and we’ve got a textbook shift in consumer shopping behavior.
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Now subtract out $200 billion or so for Amazon, and the result is not merely a shift as much as an acute need for traditional retailers to sharpen their pencils.
In this case, the change applies to back-to-school shopping, which is about to undergo the same physical-to-digital channel inversion as other major shopping events.
Key among the changes this year is that parents will be phoning in a lot of their back-to-school purchases, literally. Sixty percent of parents plan to use their mobiles phones for some school shopping. This may be why online giant Amazon, through its shopping app, is expected to surpass longtime standby Staples in terms of sales. Last year, Amazon controlled 38% to Staples’ 39%.
For retailers, these shifts highlight the whiplash pace in which shopping behaviors can change, sometimes with immediate effect thanks to the real-time gratification mobile interactions provide. Those retailers that do not respond to these urgent shifts by putting the digital experience front and center, alongside bricks and mortar, could be in for a hard lesson.
$17 Billion Increase In School Spending
Consumers are expected to spend $540 billion in the back-to-school season this year, a $17 billion increase over 2015, according to Customer Growth Partners’ 14th Annual BTS Forecast.
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The figure includes all consumer spending from July to September, drawing on the Department of Commerce/Census Bureau retail sales base to represent every spending category except auto/fuel, grocery, restaurants and home improvement. Categories such as health and wellness, furniture and sporting goods are included, as well as apparel, shoes and school supplies, according to Customer Growth Partners President Craig Johnson.
Much of the increase is projected to come through digital channels. While overall back-to-school sales are expected to rise 3.3%, according to the BTS study, online sales are estimated to climb by 11%. And of those transactions, mobile will play a proportionately larger role. Six in 10 adults said they plan to do at least some of their back-to-school shopping via mobile device, according to the Rubicon Project, a tech-based ad firm.
And what better option is there for these shoppers than the retailer that defined online retail? Amazon’s back-to-school sales are not only expected to exceed those of Staples this year, Customer Growth Partners projects Amazon will account for roughly a quarter – $4.25 billion – of the total $17 billion increase in overall seasonal sales.
Apps To School
The cause for higher mobile purchasing is rooted in basic acclimation. More adults are viewing videos through a streaming service like Netflix. As they grow more familiar with such options, they also grow more trusting. One digital act leads to another, which explains why retail mobile apps are gaining acceptance.
Nearly 50% of those surveyed by Rubicon (47%) have downloaded Amazon’s app and 71% said they plan to use a retail app before making a purchase. Two-thirds of those shoppers (66%) will compare prices, others (64%) will look for sales.
This leaves traditional back-to-school staples such as, well, Staples, in a quandary. The office supply chain is on the mend following its failed effort to merge with rival Office Depot, and the pre-school season is a crucial proving ground for investors and consumers.
In short order, such merchants require a major, viral-level event to nab roving consumer attention.
ABCs Of Mobile Schooling
In many ways, retailers should frame their back-to-school plans, and other strategies, as viral events – rapid, widespread and typically shared. Let’s complete this lesson with a new ABC in retail:
Augment: Not only should retailers ensure their digital and in-store experiences get equal footing, they should also establish comparable offerings via mobile. Every single digital option should be considered with the mobile experience in mind, in fact, from how a backpack’s features look on a five-inch screen to the checkout process. Also, since we are talking augmentation – augmented reality is now a national activity, thanks to Pokémon Go. Fleet-of-foot retailers can take advantage of this interest before it wanes.
BOPIS: The option to buy online, pickup in store gained attention last holiday season when department store chains such as Nordstrom offered it as a service. But BOPIS is particularly well suited for parents of back-to-school college students. Here’s why: Parents (or students) can order what they need the day kids are planning to return to campus. On the way to school they can pick up their orders – not near home, but at the store location closest to college. Now take it one step further. If the retailer has an opt-in app, it can push offers to the student and/or parent as they near the location. Staples, notably, does offer BOPIS. (Bed, Bath & Beyond, meanwhile, is trying an in-store version with its Pack & Hold service.)
Cyber Monday in July: If Walmart and other retailers were able to extend Cyber Monday into a Cyber Week, I am sure they can propel the shopping holiday across the calendar into July and onto our phones. Cyber Monday traditionally occurs the Monday after Thanksgiving, but traditions can be tested. This is essentially the idea behind Amazon’s Prime Day, which can be credited for its expected back-to-school success. Sales on Amazon’s second annual Prime Day rose 50% from 2015, Chain Store Age reports, beating 2015 Cyber Monday by 19% and marking the largest U.S. sales day ever.
These ABCs are achievable but should still be approached with the fluidity of consumer behavior in mind. Like new math, viral-level events can be vexing to stay on top of. However, those that do so will be at the head of their class.
This article originally appeared on Forbes.com, where Bryan serves as a retail contributor. You can view the original story here.
Back-To-School Trends: A Lesson In New Math
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