By Andreas Marathovouniotis
Back-to-school spending is expected to increase this year as schools across the country continue with a mix of in-person and virtual learning formats, and parents equip their children for in-home learning environments.
KPMG's Consumer Pulse Survey reveals critical trends about the post COVID-19 consumer and what retailers will need to do to adapt.
Five key key takeaways from the new KPMG survey
1. Educational spend is considered essential spend by consumers. Spending for school supplies is essential and is expected to be almost three times as much this year than what it was last year, even though consumer spending is down 10% year-over-year.
2. Online learning may lead to a protracted back to school period. Sales are expected to continue to show positive gains throughout the calendar year as the lingering effects of COVID-19 keep adults working from home and children learning at home.
3. Online is key for driving incremental spend. Consumers expect to make 55% of back to school purchases online, up from 49% last year, as consumers find the online experience to be easy and convenient in making purchases.
4. Anxiety running high for parents will make value for money a key component of future spend. The majority of parents expressed some concern over the return to school, and many of them are even more concerned with their finances. The combination will mean that parents will continually seek value despite increased spend in the category.
5. Digital platforms and online engagement accelerating. Parents cited live streaming of classes and leveraging digital content provided by the school as some of the most popular learning formats for at home schooling. However, due to engagement challenges many parents are considering new ways of learning including online tutors, supplemental private group classes and even small group pod type formats.
A close study of the survey’s data reveal five industry trends about the future of retail in a post COVID-19 environment:
1. Not all spend is created equal. In order to get the product mix right, understanding what is essential is critical as there are pockets of segments where consumers are willing to spend and spend substantially.
2. Focus promotional spend online. Online channels should be the key focus of promotional activity to take the majority of new spending.
3. Create a localized approach. Retailers should time investments around the distinct characteristics of the local market.
4. Provide value. The family unit is continuing to spend more time together and making collective purchases whether it be for meals or for school supplies.
5. Use data to your advantage. With the lingering impact of COVID-19, consumer demand is expected to fluctuate depending on the ongoing government response to COVID. Retailers will need to be armed with an agile supply chain to capture demand, respond, adapt and deliver.
Moving forward, organizations must have a good understanding of consumer needs and utilize data sources in building a multivariate forecast engine that provides leaders the real-time insights they need to make decisions on the strategic direction of their business.
To learn more about the findings of the survey or to arrange an interview with KPMG’s Scott Rankin, please contact Andreas Marathovouniotis.