Walmart Inc. is preparing to meet shoppers' back-to-school needs a bit differently this year, given uncertainty across the country over how schools will cope with the pandemic.
High unemployment will also pose a challenge for the retailer going into the new school year, industry experts say.
Despite pressure from the Trump administration to return to on-campus classes this fall, states and school districts nationwide are evaluating what form of instruction will be safest for children and teachers, and most feasible for school budgets.
Scott Bayles, Walmart's vice president of school and office supplies, outlined in a blog post last week some of the ways the Bentonville-based retailer is gearing up for what looks to be an unusual year. It will still have all of the usual offerings, such as kids' clothing and footwear, backpacks and school supplies.
However, recognizing that remote learning may well be a reality for many families this year, Bayles said Walmart is working with brands including ABC Mouse, PBS Kids and Sylvan Learning to offer workbooks and online content to help kids with their lessons at home.
The workbooks will be available in stores nationwide, Bayles said. In addition, parents can go to Walmart.com/learning for video content and learning resources from its partner brands, as well as additional workbooks and learning products.
A Walmart spokeswoman said Thursday that the company can't comment on projected sales for the season. Walmart's earnings for the May-through-July quarter are scheduled for release Aug. 18.
Retailers are wise to plan for various scenarios as parents begin their back-to-school shopping, analysts and other experts say.
"No one has a clue to what degree school systems will open with in-person versus virtual classes," said Mark Cohen, director of retail studies at Columbia University's Graduate School of Business. "And then there is every possibility that schools that put students together physically will have to revert back to virtual learning if or when there are discernible virus outbreaks."
If children aren't going to be on campus, Cohen said, retailers won't see the usual demand for apparel. However, there will be a much greater demand for electronics that enable remote learning such as laptops, tablets and routers, he said.
"Unfortunately, electronic products, though they are bigger ticket in price than apparel, are sold at significantly lower gross margins," Cohen said.
But if students do return to classrooms, said Neil Stern, a senior partner with McMillanDoolittle, "there would be some pent-up demand for apparel and more typical [spending on] traditional school supplies."
Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said parents of children learning virtually or who choose to home-school may invest not just in technology but in desks or other such furnishings.
For parents sending kids back to classrooms, though, "hygiene will be a major concern," Spieckerman said. "Sales of masks and hand sanitizer will obviously accelerate, but pens, pencils and other supplies may be bought in larger volumes to ensure safety."
Though Spieckerman said government stimulus checks may help save the season, "even if spending shifts to new categories," Cohen takes a more pessimistic view.
"What effect will the cessation of unemployment and other government cash infusions have on consumers who are not all being called back to work and are still likely dealing with ongoing layoffs?" Cohen asked.
Significantly less disposable income clearly translates into lower back-to-school sales, Cohen said.
Stern noted that school formats will likely vary by state, county, city and district, which for retailers like Walmart "creates major challenges for supply chain -- getting the right product to the right places."
Along those lines, Spieckerman said the main challenge "will be adjusting strategy and product assortments based on local conditions and regulations."
"Local, store-specific dynamics will be a moving target," she said.
Spieckerman suggests retailers pull their back-to-school items to the front of stores to make it easier to fill online orders, and facilitate pickup and delivery options.
According to two recent surveys conducted by Deloitte and reported in "Chain Store Age," overall back-to-school spending will be about the same as last year. More of it will be done online this year, though, with parents largely citing health concerns.
Parents of children in kindergarten-through-12th grade expect to spend about $529 per student, for a collective $28.1 billion. Parents of college students said they expect to spend $1,345 on back-to-school supplies, for a total of $25.4 billion.
Also, 37% of parents said they plan to make their back-to-school purchases online, up from 29% last year. Concerns related to the covid-19 pandemic also have more parents planning to take advantage of contactless services such as in-store or curbside pickup of online orders.
Given all the unknowns plus the fact that the peak back-to-school shopping season is only a few weeks away, Stern said, "I would expect back-to-school to be very choppy" for retailers.