Tag Archives: Coronavirus

Key trends impacting the lucrative back to school market

With schools and offices finally back this week, we are finally seeing some measure of the ‘old normal’ returning. This will come as a relief for brands and retailers targeting the lucrative back to school market. It was worth £1.7bn last year, according to GlobalData. However, like so much of the rest of the economy, we are seeing huge differences in how this market operates in 2020.

The home has been the new setting for schooling for most of this year and many parents remain nervous about sending their children back. There is even a strong possibility 2021 exams will be pushed back by several months with children losing so much time from the classroom. So with the school gates re-opening, what are the key trends those targeting the back to school market should take notice of?

Consumer electronics serving at home studying

When the lengthy lock down first hit, parents across the country collectively groaned. Their next move was going online to buy consumer electronic equipment. Laptops were needed for living rooms that had now become classrooms. In fact this category has been one of the few winners of the pandemic. While most sectors are significantly down, Electricals 2020 sales growth of 0.7% is predicted for the year, according to Retail Economics. Notebooks have been at the centre of a demand surge in particular. 73% of retailers have reported growth in sales for these products on the back of home learning. Looking to the future the momentum is likely to be maintained. A recent opinion poll by Redfield and Wilton Strategies suggested just two-thirds of parents were preparing to send their children back to the classroom with many remaining unconvinced schools are safe. If cases spike there could be a return to at least some element of home schooling which will necessitate further demand for these products.

Instore retail figures confound expectations

Recent retail figures have confounded expectations with a huge pent up demand now being met. Retail sales volumes rose a better-than-expected 3.6% in July and are now above pre-pandemic levels. Data from the Office for National Statistics showed that sales rose 2% ahead of a 0.2% prediction by economists, and a 13.9% bounce in sales in June. Relating to the back to school market specifically, clothing will still be a driver during the historical peaks of July, August and September. However stationary and tech products have been in demand during lockdown as both children and adults have been at home, with discounts readily available to take advantage of. The latest GDP figures also showed Ireland which is slightly ahead of the UK’s “return to normal” steps has shown positive precedent of customers returning to retail to buy their laptop and other back to school equipment and seek expert advice to do so.

Shopping with purpose
Connected to this, a clear new trend is people ‘shopping with purpose’. People are looking to make less retail trips but ensure they have something to show for it. Parents are looking to buy equipment for back to school and still need expert advice. However at the same time they will want to minimise unnecessary journeys with coronavirus still circulating. While there is a good chance of closing a sale from a consumer’s instore visit, it can also present some challenges. Many retailers will have a strategy to retain stock at their central locations to service online orders first. They will also encourage stores to process click and collect or web orders for customers. Therefore there is limited opportunity for instant gratification – often the reason a customer visits physical retailers. Therefore retailers should ensure they can match the needs of customers to make sure they avoid a wasted journey. The feedback is likely to be far more negative if they can’t source what they need on a trip out in 2020.

Promotional activity still strong
Brands and retailers should certainly not skimp on promotional activity during back to school. As we have identified there is a large amount of pent up demand and parents are out in larger numbers looking to purchase. Brands that offer customers what they need on these ‘purpose-driven’ visits can succeed. With lots of competition brands should ensure they are still offering promotional activity to attract new customers. Many brands and retailers have strong offers to tempt sales. For example Dixons are offering consumers a 1-in-20 chance to win money back on laptop purchases of £349+. They are also offering Buy now pay later also on devices £349+. Additionally John Lewis have run an “Off to Uni” online event showcasing needed items.

Knowledgeable staff key to capitalising on purpose-driven trips

Having staff who can influence a sale was critical before the pandemic and is now more vital than ever. With so many hardware options out there for pupils, it is vital that instore staff and those on the telephone can advise and sell parents the products that meet both the needs of their children, but also are compatible with their schools. One really interesting trend we are seeing is a +40% conversion rate of product demonstration leading to a sale. The potential for high conversion rates on purpose-driven trips highlights how critical it is to have knowledgeable staff on hand.

Schools may have been out for Summer (and Spring), but now they are back, brands and retailers need to meet pent up demand in these uncertain times. Those that help hard pressed parents meet their children’s’ educational needs will reap the rewards in good will and sales.

To read the full article please visit The Drum

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Covid-19 is temporary, but attention to the environment must be permanent

The Drum Covoid is Temporary

We’re living in a society where we’re constantly encouraged to do ‘better for the planet’. And I don’t disagree. But we’re at a point of inflection when a lot of people don’t know what’s best for the planet. From fake news to real news – it’s information overload everywhere you turn.

Recycling your plastic should be simple, but that’s another article depending on where you live and which type of plastic it is. Buy more sustainable products. Shampoo in a block is great if you have the money to buy more expensive products.

And there’s the biggest conundrum for most people when we’re thinking about the environment and greenhouse gas emissions. If I order online for delivery am I burning more carbon than necessary? Or is it more environmentally friendly to go to the shops, buy a less environmentally friendly product but save the delivery van a journey? How we expect people to know the answer, when many of us in retail don’t know it, is beyond me! It’s all rather complicated.

The impact of FMCG

I read an interesting study from the American Chemical Society that looked into the estimated emissions created by UK sales of FMCG goods, typically low-priced toiletries, packaged foods and cleaning supplies. Although shoppers have traditionally bought these items at brick and mortar shops, online sales are increasing.

The study compared the carbon footprints of three different shopping practices: old fashioned ‘bricks and mortar’ shopping and the two main forms of e-commerce, bricks and clicks and pure play (which both have different supply chain configurations). Included in the three models were emissions from transport, warehouse storage, delivery and packaging.

The results showed that the total emmissions per item purchased from bricks and mortar retailers were higher than bricks and clicks vendors in 63% of cases, but lower than pure play in 81% of cases. It appears that more items are usually purchased from bricks and clicks retailers is used and this leads to a smaller carbon footprint per item than for the same shopping trip via a brick and mortar retailer. Another factor is, of course, that one van driver bringing multiple deliveries into one area will create fewer emissions than all those people driving to the shops.

The study made some clear but obvious recommendations for consumers for cutting emissions across all three shopping categories: walking, cycling and trip chaining for brick and mortar; and purchasing from a single retailer and bundling for bricks and clicks and for pure play online retailers. Importantly for pure play businesses – whose share of the FMCG category is on the increase – switching to electric cargo bikes could cut emissions by 26%.

I’ve tried to simplify what is actually a complex study, but it does highlight the dilemma and responsibility we have as consumers and retailers to the planet. In a recent online shopping survey we conducted among 2,000 consumers, 73% said they were concerned about the environmental impact of excessive packaging, 75% single use plastics and 42% multiple deliveries to one address. There is a clear will from consumers to want to do better for the planet but it’s far too complex for them to work out how. So, retailers, trade bodies and governments need to do more to educate consumers so they can make the right choices not just any choice.

Our current Covid-19 situation is only temporary, so my mantra as we come out of the other side of it is just to take a little more time to think before you shop.

To read the full article please visit The Drum.

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