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    Retail Ecommerce Highlights for Back to School 2022

    August 30, 2022

    The back-to-school shopping season is approaching its end. In the face of sustained inflation, shoppers hunted for the best deals and made financial sacrifices in other budget areas to provide their children with the essentials to return to school. You can read our earlier roundup of back-to-school shopper trends here. Now, we’ve examined our data and answered the question: What happened for back-to-school spending in 2022?

    All data is taken from our CommerceIQ 1P vendor customers on Amazon. Back-to-school categories tracked here include office products, beauty, health & personal care, and Home & Kitchen. The brand and shopping data presented here is not limited to only back-to-school shopping occasions, but back-to-school shopping occurred within the context of these categories.

     

    Brand Sales Rose for Back-to-School Categories in 2022

    Despite the fact that Prime Day provided about a 4x lift vs the average sales day in July 2022 for back-to-school categories, shopping within these categories was still substantially higher than in both 2021 and 2022. In fact, each of the past two years has seen a rise in average brand sales within BTS categories. Brand engagement was also elevated as shoppers in aggregate also tended to view more items online in BTS categories while shopping vs. lower glance view levels in 2020 and 2021.

    Shoppers followed through with their intention to both shop and spend more this back-to-school season despite inflation. Rising prices likely encouraged more browsing activity as shoppers searched for the best value for their money.

     

    Figure 1: 2022 OPS Higher Than Previous Years for July

    Note: 100 on each year’s index set to average value for July and August 2020; values can be compared across years

     

    Figure 2: 2022 Glance Views Also Higher Than Prior Years Even Excluding Prime Day Lift

    Glance views rising for back to school

    Note: 100 on each year’s index set to average value for July and August 2020; values can be compared across years 

     

    Within Prime Day, Home & Kitchen saw the biggest lift in sales vs. that category’s average sales level across July, followed by office products. In addition to K-12 shopping, Back-to-College could have done particularly well during Prime Day.

     

    Figure 3: Home & Kitchen and Office Products Outperform on Prime Day

    OPS index by category for back to school 2022

    Note: 100 on each category’s index set to the category’s average value for July; absolute category values cannot be compared against other categories 

     

    Figure 4: Less Variation Between Categories for Glance Views Than for OPS

    Glance views index by category for back to school

    Note: 100 on each category’s index set to the category’s average value for July; absolute category values cannot be compared against other categories 

     

    Supply Chain Improved But Brand Profit Margins Struggle

    In part driven by excess inventories of durable goods at major retailers, unit out of stocks are low for back to school categories in 2022, below both 2020 and 2021 levels. Strong demand for health and personal care has pressured inventory levels for the category at around 8% RepOOS, but beauty, office products, and home & kitchen are all at a low 2-3%. Margins remain depressed across retail, and back-to-school categories are no exception though office products and beauty have more margin to work with than health & personal care and home & kitchen.

     

    Figure 5: Units Out of Stocks Low in July 2022 for Back-to-School Categories

    Unit out of stocks low

     

    Figure 6: Health & Personal Care Sees Higher OOS Than Other CategoriesPersonal care has higher out of stocks than other categories within back to school

     

    Figure 7: Beauty and Office Products Maintain Higher Margins Than Other Categories

    Beauty and office have higher gross unit margin

    Discounts Didn’t Increase Meaningfully

    Despite the fact that shoppers were eager to snap up deals during the back-to-school shopping period, brands had little on offer after an initial surge of discounts around Prime Day. Brands were unable to respond to shopper fears about inflation with better deals. Discount levels not only did not rise for back-to-school categories for much of July, but remained significantly below levels seen in 2020 and 2021. Broken out by category, office products had the highest level of discounts. Home & kitchen was the only category that saw some small spikes in discount levels in late July. This was likely due to the excess of inventory for some items in that category over the summer that has been widely reported.

     

    Figure 8: Aside from Prime Day, Discount Levels Low During July 2022

    Discount levels low aside from Prime Day

     

    Figure 9: Office Products Had Highest Discount Levels

    Office products had higher discount levels

    Ad Spend Continued to Rise

    While discounts didn’t rise this back-to-school season, ad spend has risen significantly year-on-year. Ad spend was up 40-50% in 2022 from 2021 for back-to-school categories. Prime Day itself saw a 4x lift even from July 2022’s already elevated levels. However, ROAS has been more volatile and has not been significantly higher than in past years. In fact, CPC inflation is alive and well with rising costs in 2022 vs both prior years for July. Retail media is still a maturing industry and vendor spend is likely to increase every year until the industry is saturated, even if ROAS does not clearly improve over time. Visibility is driving retail ecommerce sales even when discounts do not.

     

    Figure 10: Ad Spend for BTS Categories Higher in July 2022 vs. Prior Year Even Excluding Prime Day

    Ad spend higher in 2022

    Note: 100 on each year’s index set to average value for July and August 2020; values can be compared across years 

     

    Figure 11: Prime Day 2022 Makes ROAS More Volatile for BTS Categories vs Prior Years

    ROAS more volatile than previous years

     

    Figure 12: CPCs Tend to be Higher in 2022

    CPCs rose in 2022

     

    Home and Kitchen, followed by beauty, had the biggest rise for Prime Day. vs their average day in July, suggesting once again that Prime Day serves as a strong sales opportunity for back to college. Interestingly, despite a strong sales opportunity, office products did not see a meaningful lift in ad spend for Prime Day.

     

    Figure 13: Home and Kitchen Sees Biggest Lift From Prime Day 2022

    Ad spend lift highest for home and kitchen among back to school categories

    Note: 100 on each category’s index set to the category’s average value for July; absolute category values cannot be compared against other categories 

     

    Figure 14: Home & Kitchen Sees Highest ROAS but Office Products are Cyclical With Peaks on the Weekends

    ROAS highest for home and kitchen

    Figure 15: Consumables Have Higher Cost-Per-Click Than Durable Goods

    CPCs highest for durable goods

    Key Takeaways

    What happened for Back-to-School Spending in 2022?

    • Shoppers engaged back-to-school categories more
    • Retail ecommerce brand revenue rose
    • Prime Day is a strong back-to-college sales opportunity
    • Unit out of stocks lower in 2022 for BTS categories than prior years
    • Discounts stayed low despite shoppers hunting for deals
    • Ad spend rose significantly
    • ROAS was more volatile
    • CPCs increased year over year for back-to-school categories

     

    If you liked these insights, be sure to attend our Q3 Insights webinar on September 14, 2022 to learn how you can align to win against today’s challenging economic circumstances and succeed in retail ecommerce ahead of the holiday season.

    Register here. 

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