Study Finds Market Instability Causes Slump In Back-to-School Sales

By Christine Kern, contributing writer

Back-to-School shopping is a major event for retailers, driving a large percentage of their overall sales, so it’s a crucial season to attract customers.  But while July saw higher retail traffic, August sales slumped in part because of market instability, according to the latest study from Euclid Analytics.

The Back-to-School U.S. Retail Benchmark report provides key findings about in-store traffic and customer behavior during the back-to-school shopping season, and  measured data on hundreds of millions of domestic shopping sessions between July and August to understand how brick-and-mortar behavior affected the overall season.

 According to Innovative Retail Technologies, an earlier survey took the pulse of online vs. brick-and-mortar shopping, finding that while digital sales have seen robust growth, shoppers still prefer brick-and-mortar stores to make their final purchases, and back-to-school shoppers are no different. Physical stores will win a vast majority (85%) of shoppers for their back-to-school purchases this year, according to a survey from research firm Market Track, findings that are in line with other research showing that almost all consumers prefer to shop in physical stores. And eMarketer found that shoppers spent 6 percent of total retail dollars (including spending on gas and automobiles) online during the back-to-school season in 2014, compared to 9 percent online during the holiday shopping season.

Euclid found that July was the bigger shopping month, with retailers using promotions to drive traffic and increase the duration in their stores, but in August, retailers experienced a drop in shopper visits to physical stores, most likely the result of the dwindling impact of promotions and concerns over international markets.

 The study also found:

• Storefront Conversion increased over 1 percent year-over-year in the month of July as Back-to-School sales started to gain traction earlier in the summer although it decreased 0.4 percent month-over-month and 1.2 percent less than the prior year in August.
• Bounce rate declined almost 4 percent year-over-year, while duration increased more than 10 percent (or almost 3 minutes) year-over-year in July.
• August saw almost a 9 percent drop in traffic year-over-year, after U.S. stocks plunged on concerns about the Chinese economy. Despite this, active repeat customers showed a 1 gain year-over-year, as retailers were able to pull in some of their more loyal regulars.

“While concerns over the Chinese economy and U.S. stock market definitely had an impact on consumer confidence, it did not slow down the more loyal shoppers,” said Brent Franson, CEO of Euclid Analytics. “As online channels continue to rapidly change the face of retail, differentiated and unique experiences are essential to proactively drawing in loyal shoppers. Ultimately, retaining loyal shoppers will come down to creating new, seamless experiences.”