Back-to-school spending will be flat at $31.3 billion, and price-conscious parents will be searching … [+]
Parents will be searching for bargains and counting their pennies as they shop for back-to-school clothing and supplies, according to a report released today by accounting and consulting firm Deloitte.
Back-to-school spending for K-12 students is expected to be $31.3 billion, essentially flat compared to $31.9 billion in 2023. Average per-student spending is expected to be $586, down $11 from 2023.
Parents surveyed at the end of May said they will be shopping earlier in hopes of taking advantage of sales, and that they will be curbing their back-to-school spending due to higher prices for other household necessities.
“The overall theme is it’s a year of value and convenience-seeking parents,” said Stephen Rogers, Managing Director, Deloitte Insights Consumer Industry Center, Deloitte Services, in an interview.
“With the focus on value comes some brand loyalty and volume challenges for retailers and CP companies,” Rogers said.
“Most parents have been navigating a cost-of-living squeeze,” he said. “Seven in 10 Americans are concerned about rising prices for every day purchases,” despite recent good news on inflation, he said.
A key way parents are planning to save on back-to-school costs is by shopping early, according to the survey. Two-thirds of back-to-school spending (66%) is expected to occur by the end of July, up from 59% last year.
“Bact-to-school shoppers have been trained to look for these early summer sales, primarily kicked off by Prime Day,” Rogers said. Other retailers have timed their promotions to coincide with Prime Day, and the result is the back-to-school shopping season has been pulled forward, just has holiday promotions have pulled forward, he said.
Parents also said they plan to shop more retail formats this year as they search for deals – 4.7 versus 3.9 in 2023. In addition, they will shift away from their favorite brands if they find a lower-priced alternative, and will choose savings over brand loyalty, the survey found.
Parents are “looking at purchasing private label, and looking to trade down on costs without having to trade down on quality,” he said.
However, even cost-conscious parents will stretch their budgets for those must-have products or brands their children want the most.
“Parents are willing to indulge in the occassional splurge. Not all is cost-focused,” Rogers said.
Eight-five percent of parents surveyed by Deloitte said they can be influenced by their children to spend more to purchase highly-desired items or brands.
Above and beyond the $31.3 billion in spending on clothes and other school-related items, parents are including money in their budgets for extracurricular activities, with 86% of parents planning to spend an additional $582 on those activities, according to Deloitte.
Clothing and accessories are expected account for the biggest share of back-to-school spending, at $12.6 billion. Parents are planning to spend $7.4 billion on school supplies, and $8.6 billion on tech products.
Clothing purchases are expected to add up to $12.6 billion in spending this back-to-school season, … [+]
Tech spending is estimated to be down 11% compared to 2023, according to Deloitte.
Mass merchants are the most preferred retail format for back-to-school shopping, according to 77% of the parents surveyed, followed by online retailers, 65%. Off-price retailers and department stores were tied at 39%.
Seven out of 10 parents said convenience also influences their shopping choices, with location, delivery options, and easy returns important factors.
A key takeaway from retailers in the survey results is the importance of launching their back-to-school sales and promotions early, Rogers said.
“Given that the summer sales events have become an unofficial kickoff to the back-to-school season, they need to be ready with their promotional offers and have their content queued up,” he said.
Retailers also should be aware that as parents look to save time as well as money, they will be looking to consolidate shopping trips, and if they discover additional products they need while in a store, they will buy them.
“In-store product discovery is likely going to result in more immediate conversion,” Rogers said. “It’s a bird in the hand, as parents want to be efficient.”
However, Rogers said, “those retailers that have really strong omnichannel features that give you, the shopper, a more blended path to your purchase, maybe throw some loyalty incentives your way, and make it easy to buy either online or in-store, I think those folks will be well-postioned,” for the season.