Back-to-school businesses disrupted as remote learning continues

How at-home learning is crippling back-to-school businesses

Traditional back-to-school businesses are experiencing a shake-up as the nation transitions to the start of a new school year, according to Yelp's Local Economic Impact Report.

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UNIVERSITIES FACE FINANCIAL IMPACT AFTER CORONAVIRUS SPIKES, STUDENTS FORCED OFF CAMPUS

Many parents of school-age children are more interested in resources to accommodate homeschooling rather than basic school supplies and clothing, as school districts reopen with hybrid and virtual learning, the "back-to-school" edition of the report shows. Compared with March through July a year ago, mentions of “homeschooling” are up 144% in reviews and 172% in searches, reflecting local economies’ focus on preparing homes to serve as classrooms.

“As millions of families in the U.S. are grappling with how to successfully set up virtual learning environments for their children, we’ve seen consumer interest shift from traditional back-to-school retailers to focus on secure home networks and electronics — with people looking to upgrade tools for homeschooling,” Yelp’s Vice President of Data Science Justin Norman told FOX Business in a statement.

In contrast to the typical back-to-school August rush and momentum toward office supply retailers like OfficeMax or Staples, consumer demand has shifted to businesses catering to home-based education. Interest in private tutors has increased 16% while inquiries for home network installations are up 19%, the report shows. The traditional end-of-summer school shopping spike instead took place at the start of the pandemic in March when both students and professionals adjusted to work from home and school from home. According to the report, the two weeks following March 12 saw a surge in office supply chains, and the national seasonally adjusted interest surged 27% relative to the level of interest in 2020 up until that point.

WORKING PARENTS ARE HITTING THEIR CORONAVIRUS BREAKING POINT-- AND PAYING FOR IT

Now as students continue their digital education in the new school year, they are already equipped with monitors, iPads and other products that bridge students and teachers through home-learning setups. Similarly, school supply essentials like textbooks, uniforms and new school clothes are no longer deemed necessary.

"Businesses that traditionally see a spike in the fall as families prepare to send their kids off to school saw a noticeable decline with child care businesses like daycares and nanny services, as well as bookstores and uniform stores all down from previous years,” Norman said.

Compared with regular August levels, consumer interest in bookstores and uniforms dropped 36% and 16%, respectively.

Trends toward homeschooling utilities are even more visible in states with earlier school starts including Alabama, Kentucky and Texas. In those states, interest in private tutors shot up 51% and home network installations grew 42%. The retail industry has also seen an impact in parts of the country where school started earlier, with traditional sectors like children’s clothing and shopping centers down 34% and 44%, respectively.

CORONAVIRUS PUSHES COLLEGES TO THE BREAKING POINT

In the outlook of uncertainty, with some schools making last-minute decisions and others planning for hybrid models, not all retail has fallen flat. Some parents are shopping for basic school supplies and clothes, whether it’s to prepare for potential in-person learning or even a hybrid mix. Even so, Yelp’s report indicates that distinct “back to school” consumer trends at major retailers like Target and Best Buy have remained steady compared to normal, signaling prior anticipation for virtual learning.

Businesses in college towns are also seeing volatility as many universities roll back in-person learning and send students home due to COVID-19 outbreaks. Yelp data shows that businesses are closing at a higher rate in most college towns, and as of Aug. 17, businesses in college towns have a 24% higher permanent closure rate on average compared with the permanent closure rate of its respective state, since March 1.

CORONAVIRUS CLUSTER FORCES UNC TO CANCEL IN-PERSON CLASSES

Some college towns and cities have been hit harder than others, including College Park, Maryland (University of Maryland); Berkley, California (University of California at Berkeley); Cambridge, Massachusetts (Harvard and Massachusetts Institute of Technology); among others. In those cities, a reduced student population has disproportionately impacted the automotive, restaurant and beauty industries, with 29%, 22%, and 19%, respectively, more permanent business closure compared with their respective states. Long-term economic effects stem from March, when students departed after colleges made an abrupt move to remote learning. Consequently, sectors like shopping and retail, in particular, saw a 14% drop in consumer interest while restaurants endured an 11% decline in interest relative to their state.

YELP FINDS MORE THAN HALF OF RESTAURANTS ARE PERMANENTLY CLOSED

Yelp’s report indicates that although college towns have been more afflicted than their respective state, there are signs of recovery. According to Yelp, as some students return to campus, consumer interest in college towns is only down slightly on a year-over-year basis compared to their respective states.

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