2009 US Back-to-School Season: Overview of Major Technology Retailer Performance
The 2009 back-to-school season finished stronger than 2007 and 2008 seasons. Sales activity1 was up 10 percent over the same periods in 2007 and 2008 for the basket of consumer IT products2 covered by Tech Channel Index.
The chart measures the percent change in sales activity that week over the average of the sales activity for the previous quarter. The 2007/2008 Average is constructed from the average 2007 & 2008 value for each week divided by the composite average of the 2007 & 2008 previous quarter value. The period of measurement spans from the first week of July, ending 2009 on July 4th to the last week in September, ending 2009 on September 26th.
The US back-to-school season spans about a 12 week period, starting around the third week of July and ending the last week of September (for more details about the back-to-school season, see the side bar at the end of this article titled: Quick Facts about Back-to-School)
In 2009 the sales activity for this season reached peak levels week ending August 28th, about 1 week earlier than peak levels in 2007 and 2008. For the subsequent weeks after the peak in 2009 sales activity remained consistently above previous years by about 5 percent.
The chart measures the change in weeks of inventory3 on hand for each specific week relative to weeks of inventory as of the last week of the previous quarter. The 2007/2008 Average is constructed from the average 2007 & 2008 value for each week divided by the composite average of the 2007 & 2008 previous quarter value. The period of measurement spans from the first week of July, ending 2009 on July 4th to the last week in September, ending 2009 on September 26th.
Inventory Followed Similar Patterns
In 2009 inventory followed pattern similar to 2007 and 2008, where there is a moderate build up in the early weeks of the season, followed by a drawdown for the remainder of the season. While retailers have seen an increase in sales activity in 2009, the early season build up was smaller than previous years and the draw down slightly more extreme.
Quick Facts about Back-to-School:
Back-to-school is the second most significant season of the year (behind the US holiday season) for consumer technology retail in the US. In addition to providing retailers with a temporary bump in sales, back-to-school can act as an important indicator of consumer spending as retailers plan stocking levels going into the holiday season.
Sales typically increase by 10 to 20 percent for the months of August and September vs. the seasonally slower June and July sales levels.
Back-to-school sales begin to accelerate in late July with the peak at the end of August and typically winds down by end of September.
Within the group of physical retailers, Office Supply retailers typically see the most significant bump in sales of consumer technology, though in recent years Broadline retailers have seen back-to-school rise in significance.
15 states host "tax holiday" weekends, mostly concentrated in early August
About the Tech Channel Index
The Tech Channel Index (TCI) is based on the aggregation of POS and inventory data from companies that have opted to participate in the program. Using patent-pending methods, Zyme created the Tech Channel Index to provide a single, uniform view of sales and inventory performance metrics covering developed and emerging markets. As of October 2009, TCI metrics are derived by aggregating and normalizing over 7 million transactions collected from over 1,500 distributors and retailers each week. Participating companies represent over $40 billion in annual channel sales in multiple high-tech product categories across 140 countries in Asia-Pacific, Eastern and Western Europe, the Middle East, Africa, Latin America, the United States, and Canada, as well as other important markets. The 35,000 products included in the TCI's basket have been tested and benchmarked against established economic standards, such as the U.S. Census Bureau data shown above, and have been found to accurately represent spending on enterprise IT, consumer IT, and software categories. Products included in the TCI are tracked across all geographies and partner segments worldwide. This approach to construction yields a TCI data set that is uniform from channel to channel and country to country. Zyme collects this data using its proven world-class data integrity methods, and it treats the data of opt-in participants with absolute confidentiality and security. Participant names are never released, and the TCI preparation methods ensure that their identities remain anonymous.
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