As economic woes and budgetary constraints tighten their grip, those that supply the education sector around the globe are seeing significant shifts in purchasing behaviour.
With education budgets frozen or cut, and with parental wallets coming under increasing pressure, spending patterns in this category are changing.
From a US perspective, figures from The NPD Group’s Commercial Tracking data show that, for 2022, dollar sales in Q2 – the education buying season – grew 10% year on year. Similarly, sales during the traditional back-to-school (BTS) period in Q3 have grown 8% compared to the previous year.
However, while this sounds positive, these revenue increases were largely driven by higher average sales prices (ASPs), rather than a boost in volumes, with ASPs up 15% and 17% in Q2 and Q3 respectively.
These inflationary stresses are having noticeable effects according to ClassKit, a software company which supplies dealerships with the technological means to capture the market for educational products set down on the ‘parental supply lists’ sent out by schools. As such, it has a unique insight into the trends currently playing out in this sector.
As President Jan Kilies notes: “There’s a move away from more expensive items – ring binders with index dividers and paper, for example – in favour of using several notebooks. Possibly because teachers realise reverting to cheaper options that worked in the past can still be relevant today. Additionally, schools are no longer asking for named brands for many items, with a focus instead on quality products that represent good value.
“Federal funds, particularly for the upper grades, are now increasingly being spent on classroom and student technology. Laptops are replacing paper products, with a consequential shift away from traditional items which will likely impact the amount spent on pens, markers, erasers, etc. There’s even a move away from teaching cursive writing which will accelerate this effect.”
Operating out of Charlotte, North Carolina, FSIoffice has found that the education market continues to be strong. However, there have been significant changes in the types of product being purchased in a post-pandemic world, with items such as hand sanitiser, wipes and facemasks no longer in high demand.
The dealer’s CEO Kim Leazer further reports that additional COVID-related funds injected into the sector have dwindled and will be gone over the coming year. She says: “The areas still growing as a result of these funds are generally the larger ticket items like air purification systems, plus school and college furniture.”
At Independent Suppliers Group, EVP of Marketing Charles Forman agrees that recovery from the global pandemic continues to impact many facets of the education market. It’s recognised there was a significant amount of learning loss, and school districts are looking for ways to help students catch up.
The US government, meanwhile, has invested billions in health and safety in school facilities, and new technologies are being used to try and remedy the situation. A proportion of the Elementary and Secondary School Emergency Relief funds have not yet been spent and continue to provide opportunities to companies with solutions to offer.
Wellness at school
Workplace furniture vendor HNI, for instance, is seeing an uptick in requests from the education vertical for wellness rooms and the products which support those areas. The US-based firm – owner of the HON brand – says these facilities are looking for soft seating that is comfortable and relaxed.
According to Senior Category Manager Whitney Potratz, these spaces are aimed at making students feel at ease and secure: “Using a soft colour palette within a warm, inviting and soothing environment creates a place for students to come and decompress throughout their day.
“The inclusion of technology within educational furniture is also rapidly changing in this sector and we have to be on board with it in smart, intuitive ways. An example would be the need to charge devices. Power is required everywhere to keep tablets and laptops topped up and functioning, so we’ve included outlets in our products at critical work points where students most need them.”
She adds: “The classroom of today is not static – it shifts and adapts with students as their preferred learning styles change or expand. As such, we’ve introduced our Class-ifi range of mobile storage solutions designed to maximise space and encourage healthy movement. Additionally, our Confetti floor cushions and lounge chairs provide portable, customisable seating solutions for schools. These encourage young learners to sit where they please, while staying connected and creative in their learning environment.”
New Hampshire-based Whitney Brothers makes wooden educational furniture for early years children. 2022 has been good for the company, with sales up 25% year on year. Looking ahead, the business is forecast to grow in the high single digits in 2023, despite the headwinds of a global slowdown and turbulence in supply chains.
VP of Sales and Marketing, Brian Vaillancourt, says innovation is at the heart of this success, pointing to its Nature View Collection as an example: “This is biophilia-inspired furniture for early learning environments and follows the concept of bringing nature indoors which is particularly important to our littlest learners. We will continue to introduce innovative pieces into the collection every quarter.”
The European picture
Exacompta Clairefontaine is headquartered in Paris, but supplies educational equipment globally. UK Marketing Manager Lawrence Savage says forecasts predict that the global school stationery supplies market will continue with a moderate CAGR of 2.11%, with a projected increase of $10.8 billion between 2022 and 2026.
Germany is anticipated to account for around 30% of the growth across Europe. Additionally, the UK is expected to benefit from recent government budget commitments to invest a further £2.3 billion ($2.8 billion) in education over the next two years, with primary and secondary schools likely to be the top beneficiaries of this additional funding.
Despite growing digital trends, Savage affirms that the company’s UK-based ExaClair subsidiary has actually seen a burgeoning uptake in its traditional desktop accessories and organisation categories.
He puts this down to a greater emphasis on collective and holistic learning within classes, with items such as elasticated ring binders and folders along with multipart files being used for collaborative project work among student groups. In addition, the company is witnessing more demand for modular stationery solutions, as well as tools like revision cards, which help children break down their learning into digestible segments.
Savage adds: “There’s also a focus on sustainable products. This continues to be a priority as both members of Gen Z and Alpha mature and develop their ecological awareness. However, as these individuals are more exposed to digital communications than any previous generation, the use of gamification and nano-learning techniques will continue to intensify.”
Mixed bag down south
Moving to the southern hemisphere, in South Africa, Craig Noyle, Director and co-founder of independent marketing group Inovocom comments that the BTS period seemed poised for growth in January – the start of the new school year in the country. But here too, higher revenue figures disguise lower unit volumes.
While education remains a high priority for parents, they are typically under huge financial pressure, meaning purchases are left until the last minute, payments are often delayed or parents are looking for longer-term credit.
He adds: “The transformation to the use of digital devices in schools remains problematic, especially in rural areas where access to internet services is challenging, compounded by unreliable mains power and theft issues. As such, traditional stationery is still desirable. That said, the growth of EdTech products is happening. My concern is that OP dealers are not embracing this opportunity and are being bypassed by new entrants into the sector.”
In Australia, meanwhile, Sarah Hunter, Managing Director of Officeworks, says it’s vital to deliver value to schools, parents and students with affordable products and services, particularly given the cost of living crisis.
As in other parts of the world, schools face rising costs for utilities. They try to offset this by shopping around for the best options, especially on pricier items such as calculators.
Hunter says initiatives like the launch of the company’s ‘Bring Your Own Device’ purchase assistant tool can be useful for families. “It helps parents get the best value for their children’s schooling as it makes it easy to compare products on our website to ensure they meet a child’s particular school technology requirements.”
In terms of the main educational trends, educators are telling Officeworks that they want to do more person-to-person activities with students after two years of hybrid learning forced by the pandemic. This is affecting the types of product they are purchasing.
STEM subjects in particular are seen as key learning areas, with demand for associated products on the rise. Lessons in engineering, for example, might include building model bridges, to complement the technical skills learned on a laptop.
Greener choices are also in high demand and Officeworks has responded by making its paint and craft supplies more sustainable. Packaging increasingly comprises recyclable material and schools are being encouraged to return used pens so they can be repurposed.
Education post lockdown
Overall, the sector is still recovering from the effects of lockdowns and remote learning, according to Australian dealer group Office Brands. And while both benefitted the technology category, companies supplying more traditional products struggled, says Craig Matthews, Head of Procurement and Merchandise. “This year will see more institutions offer remote and hybrid learning, and the continuation of professionals in this sector working remotely.
“As such, we’ll have ongoing demand for home-based office and student equipment, and other accessories that assist with connectivity. Plus, there will be a focus on updating home study facilities and the products necessary to achieve this.”
He adds: “There’s also a spike in the sale of sporting equipment for primary and high school-aged children. This is a trend off the back of lockdown and is understandable as society in general returns to its outdoor lifestyle.
“In Australia, the single biggest challenge in this vertical is the inconsistency in the curriculum across the country. Education is governed by individual states, so different territories have different requirements. This makes things challenging – just ensuring we can cover all the various required book lists is complicated, for example.”
Looking at the big picture across the globe, while some obstacles and opportunities are pretty much shared by all operators, others are regional or country-specific. But anyone playing in this particular playground realises the need to adapt to the new status quo. Standing still really means going backwards.