Consumers seeking out deals, with more than half waiting till August to start their back-to-school shopping
The week of Amazon’s Prime Day and other big retailer promotions showed that consumers continue to spend but they are buying fewer items. U.S. sales revenue from discretionary general merchandise for the week ending July 16, 2022, were 14% higher than last year’s non-promotional week, and unit sales were 1% lower. Compared to the same week in pre-pandemic 2019, which also coincided with these promotional events, sales revenue rose 17% and unit sales declined 5%, according to The NPD Group.
“Consumers are clearly getting energized by promotions as they continue to spend, but elevated prices and the lack of promotional depth are hindering already low demand,” said Marshal Cohen, chief retail industry advisor for NPD.
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“Consumers are clearly getting energized by promotions as they continue to spend, but elevated prices and the lack of promotional depth are hindering already low demand,” said Marshal Cohen, chief retail industry advisor for NPD. “The typical back-to-school kickoff provided by Prime Days and other July retail promotions did not hit all industries equally, indicating this will be another flattened retail shopping period, similar to what we’ve seen with holiday peaks year-to-date.”
Industry-level performance shows consumers are just starting to spend on back-to-school items. demand was higher during the promotional week in segments like small appliances, beauty, and technology. However, big back-to-school industries like office supplies, apparel, and footwear did not yet get the same kind of lift. As of the third week in July, only 26% of consumers told NPD they had started their back-to-school shopping. Of those who had not started, 41% said they were waiting for sales and 56% don’t plan to start back-to-school shopping until August.
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“The growing influence of promotional activity alongside the consumer’s ‘here and now’ shopping mindset will fragment sales results across industries and an extended back-to-school shopping season,” Cohen said. “Retailers and manufacturers need to monitor consumer activity across both short and long-term views to get a clear picture of how they are approaching spending.”