Tuesday, July 16, 2024

As summer sizzles, US retailers try to move back-to-school shopping to July By Reuters

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By Arriana McLymore and Siddharth Cavale

NEW YORK (Reuters) – While American children may wish summer vacation would never end, retailers want back-to-school season to start earlier than ever — preferably now — and are timing promotions ahead of Amazon (NASDAQ:)’s Prime Day.

With deals on sneakers, computers, kids’ clothing and backpacks, Walmart (NYSE:), Target and Shein hope to entice parents to start back-to-school shopping and capture dollars that might otherwise go to Amazon, which holds Prime Day on July 16 and 17.

Although in many communities school does not resume until late August or September, the campaigns are launching this week and next, on average two days earlier than in prior years.

“Retailers are looking to grow market share,” said Brian Jacobsen, chief economist at Annex Wealth Management. “It’s not good enough to have bigger discounts. You need them earlier than your rivals.”

Target launched a week-long event on Sunday, two days earlier than last year, offering 30% off on school uniforms and backpacks, including from its in-house brand Cat & Jack. Walmart is holding its “largest deals event ever” from Tuesday to Thursday, also two days earlier than last year.

Shein is holding a seven-week back-to-school sale starting July 15, two days ahead of its sale last year and a day ahead of Amazon Prime Day. Bytedance’s TikTok Shop is running a deals event from Tuesday to July 17.

Brian McCarthy, a retail strategy consultant at Deloitte Consulting, said the firm last year saw more families plan to spend the majority of their back-to-school budgets by the end of the July.

Jewelia Stanley, 32 of Tampa, Florida, expects to spend $1,200, at least $300 more than last year, on back-to-school items for her three kids, including clothes from China-based retailers Shein and Pinduoduo (NASDAQ:)’s Temu, uniforms from Walmart and supplies from Amazon.

Stanley’s priciest purchase will be shoes from brands like Nike (NYSE:) or New Balance, which can cost $99 to $250 a pair.

Back-to-school spending last year was an estimated $41.5 billion, a record, for children in kindergarten to 12th grade. The number grew to $135.5 billion when college students were included, according to the National Retail Federation.

Prime Day, Amazon’s summer extravaganza, spans two days. Continuing to keep competitors on their toes, the company pushed the event back five days from last year. But Amazon also released early Prime Day deals on Tuesday for Sony (NYSE:) speakers, T-shirts, phone cases and other merchandise.

When it launched a decade ago, Prime Day reshaped a traditionally slow time of year for retailers. Sales boomed and competitors had little choice but to follow suit.

Last year, Amazon had its biggest single day of sales in company history on the first day of Prime Day. U.S. online sales across retailers during the event hit $12.7 billion.

Prime Day draws shoppers hunting for all kinds of deals, not just on notebooks and lunch boxes. The event is estimated to generate 1% to 2% of Amazon’s full year net sales, which were in $574.8 billion in 2023.

© Reuters. FILE PHOTO: Alex Toth, 7, runs off the bus to his mother, Kelly Toth (not pictured), after school in Schnecksville, Pennsylvania, U.S. September 22, 2021. Picture taken September 22, 2021. REUTERS/Hannah Beier/File Photo

The earlier and earlier start to back-to-school promotions has precedent in a similar strategy by Walmart and Amazon ahead of holidays. They launched year-end promotions in October last year, well ahead of Black Friday and Christmas.

Shoppers last year bought 375 million individual items during Amazon’s Prime Day. “Our members are looking for savings,” said Jamil Ghani, worldwide vice president of Amazon Prime. “The economic situation of the last five years has been tough, and everybody is looking to stretch their dollars further.”

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