Analysis Retail Back-to-school is big business after home learning era By Megha Merani August 30, 2022 Supplied Babyshop says back-to-school shopping is at a record high Parents are treating children after two years of pandemic uncertainty Global back-to-school market was $171.8bn in 2021 Merchandise trends include Disney princesses and football stars The 2022 back-to-school season is forecast to be the best in history – and it’s typically the second biggest spending event for parents globally, behind holiday expenditures. Parents are forecast to spend a record amount this year, in a bid to treat their children, after two years of coronavirus pandemic uncertainty brought normal school life to a halt and replaced it with months of distance learning, and a year of in-person-but-not-quite-stable hybrid classes. Ruban Shanmugarajah, CEO of Babyshop, part of the Dubai-headquartered Landmark Group, told AGBI: “I can comfortably say that in at least four out of six Gulf markets, our top line will be greater than pre-pandemic highs. UAE retail economy report shows spending up 16% this yearTeen banking app Zywa targets Saudi after funding boostHow I got to the top: Sara Chemmaa, founder, Citron “Looking at the early indications, there’s no doubt the numbers would be the biggest numbers we’ve had, and therefore the biggest numbers ever. The customers are coming back to back-to-school with real vengeance.” A Grandview Research study valued the global back-to-school market at $171.8 billion in 2021 with a compound annual growth rate (CAGR) forecast of 5.2 percent from 2022 to 2028. Over the forecast period, the global market is expected to experience healthy and steady growth as the world is returning to normal, driven by developments in the digital and retail sector, including increasing retailing of school stationery and supplies through online distribution channels. Babyshop CEO Ruban Shanmugarajah ‘Fierce’ competition Back-to-school is a critical sales period for retailers and competition remains “fierce” and “intense”, Shanmugarajah said. “You just have to drive down Sheikh Zayed Road and probably 60 percent of the advertising displays are about back-to-school. “You’ve got the hypermarkets, online retailers, traditional retailers and new players getting into it. It’s one of the busiest trading times of the year in retail. The only other season that comes anywhere near this, or is comparable, is Ramadan.” But, taking the competitive edge to the playground for the new school year meant many businesses had to hedge against pandemic uncertainty months in advance, which could leave them with too much or too little merchandise, or trying to offload old stockpiles. “The back-to-school trade has not really happened for the last two years,” Shanmugarajah said. “While a lot of schools started to go back, there was confusion and uncertainty, so consumers didn’t really shop. “But, for us as retailers, we have to buy products six to eight months in advance, so we had to make that decision back then on whether back-to-school was going to happen this year or not. “At Babyshop, we actually made a firm decision that it was going to happen, and we are going to have the widest offering. I think, looking at the market this year, not every retailer has made that bet and therefore there is limited choice today, which is good for us.” He added: “We have made sure every single collection this year was a brand new collection. There is no old merchandise being carried forward.” With the FIFA World Cup in Qatar, football is trending in back-to-school merchandise FIFA for the win Shanmugarajah added that retailers have also been challenged by a lack of data on what’s in vogue with the kids. “In terms of trends, for retailers this has probably been the toughest back-to-school to plan for because what data do we base our decisions on? Suddenly you don’t have two years’ worth of data,” he said. “Trends have changed, and we haven’t been travelling the globe to the major fairs. But I think where we’ve been able to differentiate is that we’re one of the few retailers that’s been able to get the trends spot on. “As a retailer that’s been doing this for 25 years, we know our consumers well and we know the category well. Our biggest trend at Babyshop is character merchandise.” Babyshop’s school bags this year feature superheroes including Spiderman and Batman, Disney Princesses, unicorns and football players. “With the FIFA World Cup coming around, both national and club soccer is big,” he said. “We’ve got the country collections and football clubs collection. Paris Saint-Germain (PSG) merchandise is doing vwell because it’s backed by Qatar and has Messi and Neymar, and Liverpool is doing well with Mo Salah on the team. Football fever is going to get really big as we get closer to the event.” “Space is a big trend with the UAE’s accomplishments in the sector,” he said. Payal Mirchandani, CEO of Pinca Trading A 2022 global Deloitte report said parents are returning to more traditional back-to-school purchases after investing heavily in tech during the pandemic for online learning. Payal Mirchandani, CEO of Pinca Trading said at least 50 percent of yearly business is made during the back-to-school season for retailers, which is why the company orders a 20-foot container specifically for back-to-school lines, with approximately 3,000 to 4,000 units of trendy fashion stationery and accessories. Other on-trend themes include gaming and space, Shanmugarajah added. “We have seen great success in this category and have always focused on this every year,” she said. UAE based e-commerce site Kibsons also considers its back-to-school campaign their third biggest of the trading year, behind Black Friday and Ramadan. “For Kibsons, it is not just back-to-school that fuels the period, but back-to-campus and back-to-reality for students and parents,” marketing director Sarah El-Hajji said. Kibsons offers back-to-school essentials, including fresh produce, water flasks and lunch bags “We focus strategically on stocking and supplying not just the typical stationery items and kit but ‘making life easier’ with a range of ready meal collections and do-it-yourself (DIY) food boxes and kits to save time and convenience for new students and their parents.” Sarah Chemmaa, CEO of family mealtime and lifestyle retailer Citron added that back-to-school is the biggest campaign period of the year for them. “We have seen 500 percent growth year-on-year since 2019 and this year we expect to sell 500,000 units, with lunch boxes, water bottles and lunch bags being our best selling product.” The Deloitte report noted that despite unprecedented disruption, the back-to-school market has continued to grow indicating that the retail industry is resilient.