As the new school year approaches and parents shell out hundreds of dollars, retail giants Amazon and Walmart are vying to be shoppers’ first stop for their school-related needs.
John Furner, president and CEO of Walmart’s U.S. business, spoke about the company’s back-to-school initiative and the early successes of that effort during Walmart’s earnings call last week.
“Back to school … has started strong over the last few weeks. … We need to continue to work really well, clean up and come out of the season stronger so that we can then prepare for the next holiday, which will be Labor Day,” Furner said. “… We focus on what we can control, we execute, we clean up our inventory and then we move on.”
He noted that about half of the retailer’s customers say they still have “plenty of shopping left,” suggesting more opportunities will arise in the coming weeks.
Amazon, meanwhile, is enlisting celebrity endorsements to help consumers get back-to-school shopping. Last month, the company released an ad featuring comedian and actress Michelle Buteau to promote its back-to-school sale, which features prices that smaller retailers struggle to compete with, like glue sticks for 25 cents and binder packs for 49 cents.
The opportunity here is significant. According to the National Retail Federation’s (NRF) latest annual report in July, families with children in pre-K and elementary school expect to spend an average of $874.68 on back-to-school clothing, shoes, supplies and electronics.
On average, they expect to spend $309.35 on electronics, $253.29 on clothing and accessories, $141.62 on school supplies and $170.43 on shoes – all categories that Amazon and Walmart sell.
In all of these categories, Amazon leads by a wide margin, according to data from the PYMNTS Intelligence report, “Whole Paycheck Report: New Consumer Spending Data Shows Amazon Far Ahead of Walmart.” The study estimates the two retailers’ market shares in various categories, drawing insights from the companies’ earnings reports combined with national data from the U.S. Census Bureau and the Bureau of Economic Analysis.
Additional research from the report estimates that Amazon had a 17% share of consumer spending on clothing and apparel, 41% of spending on electronics and 37% of spending on sporting goods, hobbies, music and books in the fourth quarter of last year. Walmart’s estimated share was about 6% in each of the three categories.
In fact, parents are a key year-round target audience for retailers looking to capture more of their customers’ spending. The PYMNTS Intelligence report, “The Last Transaction: Family Spending Habits Reveal Retailer Opportunities in Retail and Travel,” shows that married people with children generally spend more on retail products each month than consumers in other family structures.
With significant sums at stake for consumers and both companies vying for top spot, the coming weeks will be crucial in determining which retail giant can secure the lion’s share of parents’ spend, setting the stage for further retail conflict as the holiday season approaches.
