New High
Back-to-school spending this year will reach a new high, a Deloitte survey estimated, despite skyrocketing inflation and growing worries over a possible recession.
Back-to-school shopping in the U.S. is set to reach an all-time high, according to new research from Deloitte LLP.
For kindergarten to 12th grade students, spending should reach $34.4 billion, or $661 a student, which is up 8 percent, year-over-year.
For college students, parents are expected to spend $28.3 billion, or an average of $1,600 per student, up 10 percent year-over-year.
For its insights on b-t-s shopping. Deloitte from May 20 to June 2 surveyed 1,200 parents who have at least one child attending school in grades K-12 this fall and tapped an independent research panel.
Deloitte also surveyed from May 20 to June 14, 950 parents of children heading to colleges and universities, and also used the independent research panel.
“Even as economic and inflationary pressures sit top-of-mind, parents seem resilient and determined to ensure their children get the school supplies needed to succeed this coming year," said Nick Handrinos, vice chair and U.S. leader, retail, wholesale and distribution and consumer products, Deloitte LLP.
"Retailers that remain conscious of this determination, while being mindful to address shoppers' ongoing economic concerns, could earn trust and position themselves strongly," Handrinos added.
Earlier this week, the National Retail Federation issued its findings on this year's b-t-s, and similar to Deloitte, indicated that parents are not crimping on b-t-s spending despite their financial concerns. According to the NRF, K-12 b-t-s spending will reach $37 billion, close to the $34.4 billion predicted by Deloitte. The NRF sees an average family spend of $864 on school items, compared to Deloitte expecting $661 on the average family spend.
With college spending, however, there's a big difference from what Deloitte and the NRF predict. Deloitte indicates $28.3 billion, while the NRF sees $74 billion.
The difference is due to the organizations using different methodologies in their research, including different sets of categories. As one Deloitte official said, "Deloitte's methodology is to ask people how much they plan to spend in various categories. From there, we determine the spend per child and then multiply that number by enrollment data from the census to calculate market size."
According to an NRF official, "The NRF tracks a broader group of consumers when looking at back-to-college. Deloitte's survey is specifically among parents of college students while NRF surveys the more extensive universe of both parents of college students as well as those who are attending college themselves."
The overall optimism on b-t-s from Deloitte and the NRF is backed up by software giant Adobe, which last June had Advanis survey 1,115 consumers across the U.S. and concluded that of those planning to participate in this year's summer sales like Prime Day, 76 percent said they'll spend more or the same amount as last year. Adobe said consumers are motivated to shop summer sales early to save money, with prices rising due to inflation, and to get ahead of both b-t-s and holiday shopping.
Deloitte indicated that despite inflation and stockout anxiety, 53 percent of K-12 spending is expected to occur by the end of July, "demonstrating a return to a more typical timeframe. Though, brand loyalty may pay the price of shopper anxiety with 77 percent of shoppers saying they will trade brands if prices are too high or if the item is out of stock."
According to Deloitte, half of K-12 parents and college parents are concerned about their child's mental health and plan to spend more on products that encourage mental wellness. Similarly, half of K-12 parents and nearly half of college parents will choose environmentally friendly or responsibly sourced products when possible, Deloitte reported.
For K-12 shoppers, spending on tech products will decrease 8 percent, yearover-year. For college students, tech spending is seen increasing by 22 percent, Deloitte indicated.
"After two years of disruptions spurred by the COVID-19 pandemic, parents are ready for a more 'normal' shopping approach to the coming school year. However, inflation and other social and economic pressures will likely add complexity to the back-to-school season," Deloitte indicated.
"Families appear ready to spend, even as 36 percent of surveyed K-12 parents are concerned about making upcoming school-related payments. That's compounded further by expectations that the economy will weaken in the next six months for 54 percent of surveyed K-12 parents, up from 28 percent in 2021. Spending will reportedly focus on more traditional supplies as well as clothing and accessories for K-12 students as technology investments wane following two years of growth. However, for parents of college-age children, the same digital integration that has been underway since the pandemic is expected to continue to influence spending."
Deloitte's research also indicated that: After a pandemic-fueled tech spree, spending in K-12 this year will likely focus more on clothing — up 18 percent for respondents year-over-year — and school supplies — up 7 percent.
In-store shopping is expected to see a resurgence according to survey respondents, accounting for 49 percent of the overall b-t-s spend, up from 43 percent in 2021.
Digital shopping channels reached a saturation point. Although still higher than pre-pandemic levels, consumers indicate digital fatigue. Online's share of the b-t-s spending of K-12 parents surveyed decreased to 35 percent in 2022 from 39 percent in 2021. Only 35 percent of parents surveyed plan to leverage social platforms for their shopping this year, compared to 41 percent in 2021. While Generation X is using social media to seek deals, Millennials are more likely to look for reviews and advice.
With online shopping, free shipping is vital, with 79 percent of respondents saying it is more important than fast shipping.
“The continued digitization of the college experience is impacting everything from how students are learning to where families are shopping for supplies, and what they are buying," said Rod Sides, Deloitte Insights leader. "Online and hybrid schooling options are opening new doors for many to start their college careers, while still others are seeking to level the playing field after more than two years of pandemic schooling, by spending more to overcome both learning loss and mental wellness concerns. Retailers who meet these needs with a shopping experience that leverages the use of digital technologies could be well positioned to drive growth.”