Deloitte said it was going to be a rough year, but the National Retail Federation held out hope for a record-breaking season. And while the likelihood of seeing a retail landscape split between the two, we decided to dive into some of the retailers that place the biggest emphasis on Back-to-School.
Did in-store visits disappoint?
There are few retailers as dependent on Back-to-School traffic as Staples. The brand sees its annual peak hit in August as the need for school supplies heats up. In an earlier post, we noted that July traffic had seen a dip, but that this decrease was actually minimal when considered alongside the number of stores that were closed during the year. Yet, even with a lesser number of stores, August 2019 saw an increase in foot traffic to Staples locations when compared to August 2018. The brand actually saw a 2.2% increase in foot traffic nationwide, even while experiencing a wide spate of store closures.
Even Office Depot, a company that announced the closure of dozens of locations around the country saw a spike that nearly equaled its 2018 performance. Looking at traffic decreases Year-over-Year shows a 4.2% decline from July 2018 to July 2019. That number shrinks to just a 1.5% decrease from August 2018 to August 2019.
Comparing with the Giants
And further strengthening the belief that the Back-to-School boon will be widely felt is the rise that two major industry giants felt in August. Whereas the aforementioned supply leaders saw nationwide visit increases even in the face of store closings, the two kings of US retail just saw continued growth. Target, a company whose surge we covered last week saw nationwide visits grow 9.4% year over year this August.
Walmart, the undisputed heavyweight enjoyed a similarly powerful August in 2019 where visits jumped 8.5% nationwide compared to August 2018.
The Back-to-School shopping season proved in 2019 that it is not only a powerful asset for top retailers but that it can actually be utilized even more effectively. With this in mind, there are several fascinating storylines to track. Firstly, top office and school supply chains like Staples and Office Depot must find another way to generate alternate peaks in the year. While Back-to-School may provide a peak, the ability to generate alternative periods of heightened interest could be the difference between continued store closings and a return to grace.
Secondly, the power of the General Merchandise giants to extend their domination into periods like Back-to-School could have major implications. As these stores continue to drive visitors with a ‘one-stop-shop’ mentality, it will be increasingly critical for other competing brands to diversify their strength. They need to find a way to keep interest higher throughout the calendar year while also identifying means to counter the ‘one-stop-shop’ convenience of Target and Walmart.
Lastly, the final tally for Back-to-School success will be fascinating to examine compared to the four companies analyzed. Staples, Office Depot, Walmart and Target have all succeeded in rising above the noise during this period. If their success correlates with wider growth in shopping in 2019, it will serve as a strong indicator for wider success moving forward. However, there is always the risk that the growth these brands enjoyed came at the expense of other players.
How to truly know? Visit Placer.ai to analyze each retailer's performance.