Supply Chain Woes, Delta Variant Shrouding Back-to-School Outlook: Aptos

The forecast for a higher electronics spend is somewhat surprising this year given the extra tech investments families had to make in 2020 for schooling and working at home, Baird said. Aptos has just begun tracking the BTS season, which it considers July 11-Sept. 18; it expects the most activity in tablets, Chromebooks and laptops.

This school season will be “challenged,” Baird said, citing inventory and supply chain issues and pricing concerns. Consumers are responding to reports of inflation, with some shopping earlier in the season before prices go up. Shoppers are also aware of supply chain issues and want to lock in the products before they’re out of stock, she said.

Though consumers have begun returning to in-store shopping, Baird expects most BTS shopping to take place online. She noted the uptick in delta variant COVID-19 cases and the susceptibility for kids under 12 who aren’t yet able to get the vaccine.

Surveys in May and June showed consumer willingness to go back to brick-and-mortar stores, but Baird called that a “lagging indicator” because of the recent rise in delta variant cases. That willingness "may come back down.” Baird noted the disconnect of parents’ excitement over being able to send kids back to school and navigating the virus. “They want to make it an event, but the idea of spending 45 minutes in a big-box store and your kids can’t be vaccinated,” along with rescinded mask mandates, “set a lot of parents back on their heels," she said.

Large retailers continue to offer buy online, pickup in store and curbside pickup, but labor shortages are making the alternate fulfillment options “a little more hit or miss,” Baird said. “Some of the smaller stores seem to have just given up because it’s so disruptive; they don’t have enough staff to meet the needs of the people that are coming to the stores already,” she said. Curbside in particular is getting “short shrift,” she said.

On whether retailers are likely to reinstate mask mandates after mostly doing away with them as vaccination rates increases, Baird said it’s difficult for retailers to impose such rules “because then you have to become the enforcer.” Front-line employees “are already exhausted and frazzled … and hard to come by,” she said.

To help boost vaccination rates, Walmart announced Wednesday a wellness day for Saturday, offering free health screenings and immunizations for various diseases including “no-cost COVID-19 vaccines.” Target advertises that consumers can get a coronavirus vaccine in store through its partnership with CVS. Baird noted that Walmart is headquartered in Bentonville, Arkansas, an area of the country that’s seen a spike in COVID-19 cases in recent weeks.

Retailers are trying not to do anything that will add to operating costs so they don’t have to pass on inflationary costs to consumers, said Baird, including raising worker wages. “I think they’re just trying to hold out until the supply chain can unwind and trying not to do anything that structurally changes their costs.” That includes early promotions, “when they’re not even sure they’re going to have the supply.” It was easier to be promotional in October because there was a lot of inventory in the supply chain. “This year is the exact opposite.”

Retailers were able to ride out the pandemic due to the shift to online shopping, “but retailers need stores to be profitable,” Baird said. A lot were looking forward to back-to-school to be that “welcome back” event, she said. “The reality that we’re finding is that it’s not,” she said.