Key Takeaways

• The school supply market is expected to hit $34.4 billion this year, representing a 24% growth since 2019.
• Deloitte reports that this year's average back-to-school expenditure per child will be $661, representing an 8% increase from 2021. This is backed up by National Retail Federation's survey, which shows that average expenditure is expected to increase by $168.
• Inflation has caused a significant increase in the prices of school supplies, with essentials like lunch boxes, backpacks, and back-to-school kits becoming between 8% and 16% more expensive.
• Based on US Amazon sales, not all traditional categories decreased. For instance, between August-September 2019 and the same period in 2020, drawing pencils grew by 115%, office tape dispensers - by 60%, and book covers and book accessories - by 36%.

Introduction

Selected Findings

Current State of School Supply Sales

• According to the 2022 Deloitte back-to-school survey, despite the challenges such as inflation and negative economic outlook, parents set aside an estimated $661 for the back to school and college (BTS/C) season. A report by the National Retail Federation estimates the expected spending even higher, noting that 38% of parents are willing to reduce their other spending, adding to the total BTS/C expenditures that are expected to reach $37 billion.
•  On average, "families with children in elementary through high school" are expected to spend $864, which is approximately 2% more than average spend in 2021.

 

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• Rising inflation and post-pandemic effects have impacted the supply chain. A report by LendingTree shows that many parents opted to start shopping early, with 44% expressing difficulties in finding some supplies and only 13% having successfully completed their BTS shopping.
• Deloitte further reports that the BTS market is expected to record a 24% growth since 2019 with the current expenditure expected to hit $34.4 billion.
• In-store BTS shopping is expected to increase to 49% compared to 2021's 43%. Deloitte attributes this increase to the shift from online and hybrid learning that had been affecting the market since the pandemic.

The Impact of Inflation

• School supplies have been impacted by inflation, with items such as backpacks, lunch boxes and back-to-school kits all experiencing a significant price hike.

• According to CreditKarma, rising inflation has made 37% of parents unable to meet their back-to-school shopping budgets. An additional 42% are planning to take on debt to help them meet their children's needs.
•  Jones Lang LaSalle (JLL) survey reports that despite inflation affecting the spending patterns, there is an expected moderate growth year-over-year in BTS expenditure. This survey found that parents who are greatly affected by inflation will reduce their expenditure by 15% while those who are somewhat affected will reduce it by 5.8%. However, those whose budgets are not affected by inflation plan to increase their spending by 31.8% compared to 2021.
• Due to inflation, shoppers are opting for cheaper alternatives, and even shopping longer as they target tax holidays and products on discount sales. Some are even opting for second-hand clothing as a way of reducing expenditure.

Impact of Remote/Hybrid Learning on School Supply Sales in 2020

• Remote/hybrid learning fueled digital acceleration with more purchases being done online than in-store.
• In the seven weeks ending August 9, 2020, there was a 32% decline in sales of traditional school supplies as people were preparing for remote/hybrid learning.
• However, based on US Amazon sales, not all traditional categories decreased. For instance, between August-September 2019 and the same period in 2020, drawing pencils grew by 115%, office tape dispensers - by 60%, and book covers and book accessories - by 36%.
• Also on Amazon, the categories that declined in the same timeframe are those that are typically restricted to in-person learning. They are backpacks and launch boxes (-35%), D-Ring binders (-22%), and mechanical pencils (-5%).
• At the same time, it is worth noting that the change in sales of traditional school supplies was not constant, especially in online marketplaces. In April-May 2020, which are not typical months for school supply shopping, most categories grew compared to the same time a year before, due to the transition to remote learning.

 

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• Additionally, during the pandemic, there was a significant increase in sales of hardware for remote learning such as notebook computers, routers, monitors, USB cameras, and keyboards.

Research Strategy

Key Takeaways

• Before the pandemic, about 2 million students, representing 3% of the US student population, were homeschooled. In the 2020/21 school year, the number increased by 63% across 18 states before falling by 17% in the 2021/22 school year.
• To adapt to the increased demand and need for remote learning during the COVID-19 pandemic, school districts are partnering with publishers (such as Cengage and Pearson) and software companies (such as Google, Blackboard, and Canvas) to offer technical and education expertise in remote learning.
• As of April-May 2021, 30% of kids were educated fully remotely, despite only 10% not having in-person options at their institutions.

Introduction

Remote Learning

• Before the pandemic, 293,717 students were enrolled at 691 fully virtual public schools. During and after COVID-19, virtual school enrollment boomed. Florida Virtual School registered a 54% increase in enrollment. Connections Academy registered a 61% increase in applications to the virtual school. K12 Inc.'s public schools’ online programs increased from 122,000 enrollments in 2019 to 170,000 enrollments in 2020.
• Since the start of the COVID-19 pandemic, about 93% of parents indicate that their children have received a form of online instruction.

 

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• As of April-May 2021, 30% of kids were educated fully remotely, despite only 10% not having in-person options at their institutions. The chart below presents parents' key motivations.

 

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• During and after the pandemic, video calls and conferencing became ubiquitous. Parents believe these tools should be introduced at schools, as they could provide higher-quality education.
• Additionally, they are interested in remote learning because of flexible schedules, digital literacy, personalized instruction, self-paced learning, and deeper engagement.

• To adapt to the increased demand and need for remote learning during the COVID-19 pandemic, school districts are partnering with publishers (such as Cengage and Pearson) and software companies (such as Google, Blackboard, and Canvas) to offer technical and education expertise in remote learning.

Homeschooling

• Before the pandemic, about 2 million students, representing 3% of the US student population, were homeschooled. In the 2020/21 school year, the number of homeschooling students increased by 63% across 18 states before falling by 17% in the 2021/22 school year.
• Homeschooling among black families increased from 3.3% in spring 2020 to 16.1% by fall 2020. Across other racial groups in the United States, the proportion of families that homeschooled doubled from spring 2020 to fall 2020.

• During the COVID-19 pandemic, parents took up homeschooling fearing that school districts would offer low-quality education due to an over-reliance on substitute teachers to cover staffing shortages and "hastily assembled remote learning plans."

• When schools started reopening, parents opted for homeschooling to protect the health of their children rather than risk their exposure when they attended school.
• Even as the risk decreased, many of them decided to stick to the option, wanting to continue doing what worked for their children or disagreeing with school policies.
• For reference, before the pandemic, key motivations for homeschooling included "dissatisfaction with neighborhood schools, concerns about the school environment and the appeal of customizing an education."

 

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• States had not prepared for the surge in homeschooling, which led to state legislatures considering imposing or easing regulations for homeschooling. Proponents of strict homeschooling regulations were guided by fear of child abuse and neglect whereas those advocating for easier regulations focused on more parental involvement in the education of their children.

Racial Differences

• As noted above, the growth in homeschooling was much higher among Black families. Similarly, according to Brookings, 43% of Black and 42% of Hispanic parents prefer remote instruction to in-person learning, compared to just 19% of white households with children.
• Anecdotal evidence from Black families suggests that the reason behind minority families not being willing to send children back to school is that being more involved in their children's education during the pandemic made them realize that the curriculum isn't inclusive. They prefer to keep their child at home and be able to teach them things related to their heritage.
• Furthermore, The Hechinger Report noted that some Black households were particularly satisfied with remote learning because it gave the students access to technology, which trumped any challenges. According to the parents, increased technology use could prepare their children for the future.

Research Strategy

Key Takeaways

• Johann Wentzel, a Ph.D. student at the University of Waterloo in Ontario, notes that virtual and augmented reality technology creates a "sense of presence, immersion, and interactivity" in the classroom.
• The AR/VR market in ed-tech is expected to grow at a CAGR of 39.7% to reach $32 billion in 2026.
• Schools that tested asynchronous learning during their move to online learning were lauded by students for having a flexible schedule. Students noted that they had more freedom and convenience in completing their schoolwork.

Introduction

Virtual and Augmented Reality

• In the future, K-12 educators will deploy virtual and augmented reality are being used to create interactive virtual learning environments known as meta verses. As such, aspects of the real world are better explained and highlighted using this technology than traditional teaching methods.
• Johann Wentzel, a Ph.D. student at the University of Waterloo in Ontario, notes that virtual and augmented reality technology creates a "sense of presence, immersion, and interactivity" in the classroom. According to Brookings, the meta-verse is expected to "be as omnipresent as TikTok, Instagram, and Facebook" in the future.
• The AR/VR market in ed-tech is expected to grow at a CAGR of 39.7% to reach $32 billion in 2026.
• In Arkansas, workforce development officials are planning to use virtual reality technology during career exploration for K-12 students. The University of Michigan has already deployed extended reality technology in technical skill-building courses.
•  Insufficient content development will hold back the development of AR/VR technology used in classrooms. It is a result of "the lack of collaboration between ed-tech developers and education and child-psychology experts."

Asynchronous Learning

• The asynchronous learning education model, also known as self-paced learning, is focused on students learning on their own schedule. Currently, synchronous learning is the norm at K-12 schools and it involves students learning on a fixed schedule.
• COVID-19 enforced lockdowns led to the growth of online classes. Schools that tested asynchronous learning during their move to online learning were lauded by students for having a flexible schedule. Students noted that they had more freedom and convenience in completing their schoolwork.
• According to Chris Wilson, who is the Head of Schools for Sora Schools, “I think there’s an opportunity to learn from what we’ve all experienced during this pandemic, and for us to realize that schools don’t have to be a place." Matt Renwick, the principal of Mineral Point Elementary School in Wisconsin, notes that “My wife, who was a second-grade teacher at the time, set it up in her classroom, and she saw a 70 percent reduction in negative behaviors ... Students were more engaged and wanted to be in the classroom.”
• Oklahoma City is testing asynchronous learning by introducing seven asynchronous learning days in its 2021-2022 school calendar.
• Schools often find implementing asynchronous learning to be overwhelming. To overcome this challenge, educators should be ready to invest in high-quality video recording equipment for tutors and instructional videos for students as well as digital libraries and databases.

 

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• While the trend is already emerging, it will likely grow significantly in the future, as multiple districts include it in their teaching plans for the next 1-3 years.

Research Strategy