The 2022-2023 academic school year for students in grades K-12 kicked off with nearly 80% of students back in classrooms for in-person learning and approximately 50% of U.S. adults working in a hybrid or work-from-home format. During Q3, the busiest quarter of the year for office supplies, about 70% of consumers indicated they will purchase an office or school supply product at retail, according to NPD’s Future of Office Supplies report. And retailers were ready for the incoming store traffic with many setting up as early as June and holding online sales events in early July. They also generated excitement by merchandising a variety of licensed character supplies, eco-friendly or green products, licensed product bundles, teacher-specific items, and new assortments of store-branded products. This all contributed to a strong start to the quarter with July retail dollar sales growing 4% versus 2021.

The return to office, be it full-time or hybrid, and the return to classroom combined with rising average sales prices (ASPs) in the industry has also supported the rebound of the commercial channel. In fact, based on NPD’s Commercial Tracking Service, dollar sales grew 8% year over year in July and August combined after growing 10% in the same period last year. The commercial channel has benefited from sales shifting out of retail and e-commerce and back into the B2B space as employees may secure their supplies in the office, rather than purchasing for their home office use.

In office supplies, NPD’s Checkout data reveals that online sales made up nearly 30% of retail sales in the first half of 2022 and 26% during the Q3 period thus far (July and August), which is in line with prior years. Despite some dollars shifting to the commercial channel, e-commerce has acted as a strong contributor to retail growth in 2022 with year over year dollar sales up 19% in July followed by single digit growth vs. 2021 in August and the first two weeks of September, based on NPD’s Weekly Retail Tracking Service. E-commerce unit sales have grown across these periods as well.

NPD’s Future of Office Supplies report indicates back-to-school list items are driving the unit and dollar sales growth in e-commerce as nearly 50% of consumers stated that they used a retailer-based app or tool to determine what school supplies they needed to purchase and 30% of consumers stated that they participated in the Clear the List movement held online for teachers. Convenience and digital platform design and integration are key ingredients to creating a seamless omni-shopping experience for consumers. Longer-term the online channel is expected to continue to gain share in the industry as a result of retailer investment and capability enhancements as well as consumers becoming more fluent and comfortable with shopping online.

When looking at total retail sales, both in-store and online, overall unit sales were flat year over year in July but began to decline in August and early September. Although the usage of technology for both working and learning has increased, about 10% of consumers indicate buying more supplies and 63% indicate buying the same amount as prior period. In addition, 69% of teachers indicate being provided with money or funds to help prepare lesson plans, and 34% indicate being provided more funds to support their classroom environment. These factors combined with stabilization in consumers activating and completing their home office setups contributed to a softer dollar growth rate in August and September-to-date with both periods landing flat to prior year. Looking ahead to future seasons in 2023 through 2025, the industry should expect less volatility in both dollars and ASPs with unit sales growth remaining a challenge as the new post-pandemic demand levels recalibrate and stabilize.

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