The back-to-school season, the shopping extravaganza between July and September that comes second to holiday shopping, is at its peak. Americans are estimated to spend $27.6 billion this time, per an article published on CNBC. Keeping this in mind, below we highlight a few patterns that have been established in this year's back-to-school season.
Departmental Stores to Gain Upper Hand
Average spending on apparel, school supplies, electronic gadgets and more is likely to touch $510 per household this year. About $292 of that or 57% of that shopping will be done offline, per a survey by Deloitte. It is more than double the $115 to be spent online for back-to-school supplies, or 23% of total spending. The remaining 20% are still undecided on whether to shop online or in stores.
About 57% of back-to-school shoppers and 40% of back-to-college customers will opt for departmental stores, while 55% and 49% will go online, per an article published on retaildive. About 52% of the back-to-school shoppers choose to shop from discount stores, 51% would likely drive to clothing stores and 35% to office supply stores. About 35% of college shoppers will hit discount stores, 31% office supply stores and 30% college bookstores.
Per Deloitte, apparel is the segment that will likely be most-purchased offline. This is because kids grow so fast that sometimes returns get necessary due to wrong sizes and the return process is apparently more seamless offline than online (read: U.S. Retail Sales Steady in July: ETFs & Stocks to Play ).
Wal-Mart WMT is offering some great prices for some items this back-to-school season. For example, color pencils, markers and crayons will be available for less than $1 . The stock has a Zacks Rank #3 (Hold) and VGM Score of B.
Deloitte believes that Target Corp. TGT will be a big beneficiary of the back-to-school shopping season, along with Wal Mart. The stock has Zacks Rank #2 (Buy) with a VGM Score of A. The stock hails from a top-ranked Zacks industry (top 23%).
Deloitte is also bullish on discount retailers, including TJX Companies TJX . It also has Zacks Rank #2 and VGM Score of B. The stock hails from a top-ranked Zacks industry (top 23%). Investors can also target another discount retailer, Dollar Tree Inc. DLTR , which also has a Zacks Rank #2 and VGM Score of A.
As far as ETFs are concerned, investors can try Wal-Mart-heavy VanEck Vectors Retail ETF RTH . While Wal-Mart has an 8% focus on the fund, TJX and Target each has more than 4% exposure. Dollar Tree and Dollar General (DG) each have 2% exposure to the fund. Target Corp.-heavy Deep Value ETF DVP should also be on investors' watchlist. The fund has 8.35% weight in Target Corp (read: Bet on These ETFs for Back-to-School Shopping ).
Changes in Electronics Shopping Pattern
Deloitte's survey revealed that use of laptops declined from 57% in 2017, to 49% this year. On the other hand, there is a rise in smartphone shopping from 49% in 2017 to 53% this year. This puts First Trust NASDAQ Smartphone ETF FONE in a bright spot.
Though there are plenty of favorable factors behind semiconductor ETFs like VanEck Vectors Semiconductor ETF SMH and iShares PHLX Semiconductor ETF SOXX , a dip in laptop sales may spell some trouble for the segment (read: Is Fading Crypto Demand At All a Threat to Semiconductor ETFs? ).
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DEEP-VALUE ETF (DVP): ETF Research Reports FT-NDQ SMARTPHN (FONE): ETF Research Reports VANECK-SEMICON (SMH): ETF Research Reports ISHARS-PHLX SEM (SOXX): ETF Research Reports VANECK-RETAIL (RTH): ETF Research Reports Walmart Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Dollar Tree, Inc. (DLTR): Free Stock Analysis Report The TJX Companies, Inc. (TJX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report