What to Expect from Back to School 2023?

July 10, 2023
By Shira Petrack, Head of Content for Placer.ai

The first half of 2023 was particularly challenging for many retailers nationwide. But recent foot traffic trends indicate that the tide is beginning to turn – which bodes well for the upcoming Back to School season. We dove into the data to find out more.

A Difficult Start to 2023

As inflation and interest rates continued to rise in early 2023, many consumers braced themselves for a long-term economic slowdown and adjusted their shopping accordingly. Looking at retail foot traffic in the first 24 weeks of the year highlights just how much consumers tightened their belts, with visits to major brick-and-mortar retailers significantly lower than they were in the first 24 weeks of both 2019 and 2022. And families – which have been particularly impacted by the recent price hikes – may well have cut down on shopping more than other audiences.

But looking at the graph below also indicates that a rebound is on the horizon, with the gap between 2023’s visit numbers and those of previous years narrowing in recent weeks. This turnaround may come just in time to bring retailers much needed relief during the key summer months.

Positive Shift in Recent Weeks

Zooming into overall brick-and-mortar retail visits in recent weeks highlights the positive trend that is taking shape. Weekly visits to retailers between June 5-25 2023 were down just 6.8%, 5.3%, and 3.3%, respectively, relative to the equivalent weeks in 2022 – the smallest year-over-year (YoY) visit gaps of recent months, with the exception of the week of Mother’s Day.

The progressively narrowing visit gaps may well indicate that consumers are ready to hit the stores again – right on time for the critical shopping season ahead. With inflation slowing, interest rates appearing to hold steady, and consumer confidence on the rise, shoppers may finally feel comfortable enough to loosen the purse strings and engage in some much needed retail therapy. In particular, parents – who may have been making due with hand-me-downs or second-hand clothes and putting off buying new clothes for their children – might be looking to refresh their kids’ wardrobes ahead of the new school year.

Clothing Showing Promising Growth in Recent Weeks

Looking at the retail foot traffic by category provides further reason to be optimistic about Back to School 2023. Since May, the YoY visit gaps to superstores and shopping centers shrunk significantly, even swinging positive for the last full week of June – which may mean that some parents have already gotten an early start on Back to School shopping. YoY foot traffic for the Clothing category looks even more promising, with weekly visits higher than 2022 levels for most of Q2. It appears that consumers are ready to shop once again and make the most of the upcoming sales events and Back to School promotions.

Off-Price and Shoe Stores Well Positioned for Back to School

Diving deeper into the data highlights that – even within the already strong Clothing category – some segments are better positioned than others. The YoY visit gap for the Shoe Store sector has been steadily narrowing since May, with YoY visits to shoe stores outperforming, on average, YoY visits for the Apparel (Excluding Off-Price) segment.

Second-hand shoes aren’t quite the same as new ones – which means that even budget conscious shoppers may need to visit an offline shoe store to find footwear that fits. Shoes can also be somewhat tricky to purchase online, which might also explain brick-and-mortar shoe stores’ relative strength. With the warm weather driving demand for sandals and other summer footwear, the category may well receive an additional boost in the coming months.

But the real winner within the wider category is the Off-Price segment. Since the week of May 8-14 2023, weekly visits to off-price retailers consistently exceeded 2022 levels. This indicates that consumers are indeed ready and willing to shop again – even if they remain on the lookout for a bargain.

Positive Trends Ahead of Back to School 2023

Although the economic uncertainty persists – and continues to impact retail behavior – foot traffic data from recent weeks paints a relatively rosy picture ahead of the all-important Back to School season. Overall retail visits have been trending up, and foot traffic to shopping centers and superstores – key Back to School players – has also been on the rise.
Most importantly, Clothing foot traffic has begun to exceed 2022 levels in recent weeks. And while many of those visits are going to more affordable off-price retailers, or to less discretionary categories such as shoes, the rise in traffic also indicates that the upcoming season may well bring some respite from the recent retail challenges.