Consumers Putting off Back
by Doug Desjardins
Just a few years ago when the economy was humming along, retailers would start building their back-to-school displays the week after they tore down displays for Fourth of July. But the pace of consumer spending has slowed in more ways than one.
Most retailers this year didn’t begin their back-to-school promotions until late July or early August to keep them in tune with a new tendency of consumers to procrastinate on shopping.
“More and more consumers keep telling us that they are putting off their shopping later and later each year,” said Marshall Cohen, chief industry analyst for research firm The NPD Group. “I would say this is a change in the timing of consumption: more people ‘buying now and wearing now’ is part of the lingering impact of the recession.”
That trend showed in an NPD Group survey conducted in July that showed just 3 percent of respondents had already purchased a back-to-school item, down from 6 percent in 2009.
Part of that trend may be linked to consumers becoming more selective and searching for bargains. This year, 55 percent of consumers said they would shop in more stores, up from 53 percent in 2009. And a whopping 79 percent said their main motivation in deciding on a purchase this year would be "value."
Wal-Mart launched its back-to-school sale in late July--a few weeks later than usual--to compensate for the unusual consumer trend. “Now, like it has been for several seasons, customers are shopping much closer to the event,” said Wal-Mart vice chairman Eduardo Castro-Wright. “We are focused on delivering on our 'save money' promise on top brands for school supplies, electronics, home and apparel.”
With that in mind, Castro-Wright said Wal-Mart is happy with the early sales results of its back-to-school efforts in July, “based on industry reports on back-to-school spending.”
A study from the National Retail Federation (NRF) also supports the trend. The NRF survey showed 23.3 percent of shoppers are waiting one to two weeks before school starts before they start shopping with 12.6 percent waiting until the week before. And 11 percent said they will wait until after school starts to complete their shopping.
The fact that consumers are spending more time comparison shopping is also having an effect. An NRF survey showed 29 percent of consumers plan to use social media or mobile phones to check and compare prices while at home and in stores.
A report from the International Council of Shopper Centers (ICSC) also noted the late start to the shopping season but attributed it in part to record hot temperature across much of the U.S. in July.
“Back-to-school demand, which normally kicks in late July, also was postponed as hot weather curbed the consumer’s interest and urge to buy,” said ICSC chief economist Michael Niemira.
Even if you've put off shopping, there are still plenty of Back-to-School bargains to be found.