Aug 30, 2016
The fashion brand Kate Spade is most known for luxury handbags. But it is also banking on gold-accented staplers, monogrammed planners and R450 ballpoint pens to help buoy sales during the increasingly important back-to-school shopping season.
The discount retailer Dollar Tree is also expecting students and their parents to lift sales, particularly after an unusually weak second quarter. But instead of fancy notebooks, it is focusing on the other end of the price spectrum, like R15 packs of tape, glue sticks, and pencils.
As the income gap in the United States has turned into a chasm, luxury and discount retailers have become increasingly deft at attracting people at the separate ends of the income spectrum. Stores positioned for the middle, like traditional department stores, have struggled by comparison.
These days, that divide extends more than ever to what students wear and carry with them to their school lockers.
“Both luxury retailers and value stores, like dollar stores, are benefiting right now from the back-to-school trend,” says Jharonne Martis, a retail analyst with Thomson Reuters. “They’re really benefiting from their core consumer.”
Parents expect to spend an average of $673.57 on electronics, clothes and notebooks this year, compared with $630.36 last year, according to the National Retail Federation, an industry trade group. In total, parents of kindergarten through 12th-grade students say they will spend $27,3-billion on school supplies this year, up from $18,4-billion in 2007.
The back-to-school season is the second-biggest shopping period of the year, behind Christmas. But while families will spend more than before, how they will do it — and where they will do it — varies widely.
A growing list of designer notebooks, luxury desk accessories and even beanbag chairs now caters to wealthy back-to-school shoppers. Shoppers can buy a $195 Gucci headband, a $572 Versace backpack, and a $28 Terez pencil case on the back-to-school section of Saks’ website. Restoration Hardware has a new “teen” line that includes a $2,000 “riveted aluminum” desk and $250 faux fur beanbag chairs.
Martis said she expected Kate Spade’s desk accessories and stationery products to be a big focus this season, projecting that sales would rise 7 percent this quarter at stores open at least a year. (The company said it could not make executives available for an interview.)
But back-to-school items are also expected to buoy sales at discount retailers like T.J. Maxx, whose appeal is increasingly wide and which aim at the growing number of poor students and families in the United States.
In 2007, about 9-million public school students came from low-income households, according to the Department of Education’s National Center for Education Statistics. In 2014, there were more than 11-million, according to the most recent data.
Some of these families rely on backpack drives and other support from nonprofit or community groups. Many, though, are left seeking the best deals.
Retailers, including the discount stores, have responded by pushing bigger promotions earlier in the shopping season. That, in turn, has seemed to push people to do research on their own: Back-to-school search queries rose sharply the week of July 11, a full week earlier than last year, according to data released recently by Google.
Retailers who cater to middle-class consumers have been struggling, slashing prices in what has become an aggressive race to the bottom.
Sales at traditional department stores have slumped, and once-mighty institutions like Macy’s and Sears have had to close stores.
By Rachel Abrams for the New York Times