This past Wednesday, Retail Brew editor and fellow Tampa native, Halie LaSavage, asked me to weigh in on their main story, a piece about college dorm retail and back to school — and whether retailers were going to suffer in the long-run with deferrals, Zoom classrooms, and socially-distanced campuses.

She expected a quote, and I gave her 700 words. Here are those 700 words (with a little extra for our Insiders fam.)

TL;DR: Higher sales in this category short-term because of the migration from campus to home; but spread out longer-term, into late September. Long term: notsomuch.

Question 1

This fall, can retailers that sell college dorm furniture/goods expect the same sales boost that general furniture retailers like Wayfair experienced during lockdown, or can they expect a decline in business? Why or why not?

A rise in spending in these categories will come in the Fall. There are numerous reasons why, but let's begin with a study. Chain Store Age just published this brief of an International Council of Shopping Centers (ICSC) survey, which found that back-to-school shoppers will spend an average of $1,053 on related items, up approximately $200 from last year, with increased spending on electronics and furniture. Why? Let's use more data - this time from Future Commerce's Retail Rebirth report: Consumers are spending less on travel, dining out, and apparel:

The result is more savings. A chart of PSAVERT (personal savings rate):

Fewer jobs, but more savings: This has never before happened in an economic recession. Americans are putting money into the bank.

More savings, less travel, and more cooking at home = cash on hand to spruce up the place. On the education front, what took place in the Spring was meant to be a temporary measure ("maybe through Memorial Day?!") but as we settle in for the long-haul we will need more permanent solutions: i.e. real, dedicated workspaces. "Screw it, let's buy a real whiteboard and markers" is a phrase I myself uttered earlier this week.

Finally, the ICSC survey found consumers to be anticipating later school start dates. Here in Palm Beach County, we're starting on August 31st — very late for us, historically so. Traditionally, kids would have been back to school by now. This will shift Back to School purchases later, extending into September, even October. The tax holidays in some states (going on right now in Florida) are misaligned with the actual start date of school, and there is some talk of extending them.

Those who can't, homeschool

The uncertainty about when and where Back to School will happen, and for whom, is creating a lot of "wait and see" on the consumer side. This results in more shopping, but not more buying. The buying will come later. For now, those on the fence considering homeschool are weighing up their options on Amazon. Data from predictive consumer insights platform Surge.ai reveals a few high-level takeaways:

• Demand for Educational Resources for High Schoolers is growing faster than for Middle, and Elementary Schoolers
• Content Searches for “homeschool science” have quickly surpassed “homeschool reading”, and are now on par with “homeschool math”

The gender gap in this homeschooled window-shopping seems to be closing as the hashtag #homeschooldad has recently picked up steam, gaining 6% in the past 90 days, though its volume pales in comparison to the #homeschoolingmom hashtag which sees engagement in the 900,000 posts range.

Question 2

Long term, how do you anticipate a shift to remote learning will affect furniture and home goods retailers (ex. Dormify, PBTeen) that generated significant revenue from college students outfitting their dorms?

In Insiders #046: *The New Formal,* I outlined 3 areas affected by the pandemic: entertainment, employment, and education. On the entertainment front, we have long-neglected our formal living rooms and dining rooms. For those without kids fleeing to the suburbs, they'll be using these spaces to entertain new friends circles. Rather than dining in bars or restaurants, we'll be entertaining at home. Furniture is at the center - bars, wine racks, dining tables - even including those antiquated pieces like a hutch, a sideboard, places to hide (or show off) our drink and dinnerware.

On the education front: as we settle in for a remote semester(...s?) we will repurpose those spaces for education. The Formal Dining Room becomes the new venue for a Formal Education. Because these are in public areas of larger suburban homes (and because we're likely to be entertaining at-home more frequently in the months and years to come) we'll invest in higher-quality pieces. Why not? We have more cash on hand anyway. It's not just the college crowd having to make-due, either. Many primary schools are going remote-first or remote-only. Being that we all experienced the trauma of trying to share the dining table or the bar top with the kids doing school work on Zoom in the Spring, creating more dedicated spaces makes sense for this crowd, too.

That brings us to employment. Who's going to be educating these kids? Some parents will have to opt to stay at home, suggesting an opting-out of Formal Employment. A cottage industry is cropping up to revive the role of the au pair, thanks to the gig economy.

Long-term we'll see more virtualized programs, more certifications, and vocation, instead of Formal Education, which will mean a continued winnowing of the middle class over the next generation. (Required homework: Scott Galloway's recent interview with Kinsey Grant on Morning Brew on the future of higher ed.)

So, how does it affect a business like Dormify? If the pool of traditional college-goers shrinks (some will shift to online, some will opt out, some won't be able to afford it) then long-term I sense a pivot for these particular businesses.

This seems to be a uniquely US-centric issue. This, as we're already wrestling with brain-drain in the United States, and more uncertainty (if not tighter restrictions) around H1-B Visas. Fewer folks going to college is bad for our nation on every level.

Postscript

What this points to is not just the uncertainty we see in Back to School, but the uncertainty of the future, in general. As we said in Retail Rebirth, seasonality is now a social construct. Back to School season and fall sports — all relative uncertainties.

Even longer-term, college may well change forever. "Back to School" is a social construct, after all, and there have been those that have been pushing for continuous learning year-round. They may finally get their wish.

This is life in The New Formal.