Dive Brief:
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Back-to-school shopping is in focus for retailers and consumers alike, but shoppers are holding out for the best promotions before actually buying, according to research from Deloitte and the National Retail Federation. Household spending on clothing, supplies, computers and electronics for children in grades K- 12 is expected to reach nearly $28 billion this year, according to Deloitte's annual "Back-to-School" survey. The NRF, which adds in college spending, according to an email to Retail Dive, says that the total for K-12 and college combined could reach $82.8 billion, nearly as high as last year’s $83.6 billion.
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It’s a season where a large number of shoppers still prefer stores, according to Deloitte, which found that each household will spend some $292 on average in stores, more than double the amount planned for online ($115), and about a quarter (23%) of the average back-to-school budget will be spent online. NRF, meanwhile, found that 55% of K-12 shoppers plan to shop online (with 57% heading to department stores, 52% to discount stores, 51% to clothing stores and 35% to office supply stores), while 49% of college shoppers will go online (with 40% going to department stores, 35% to discount stores, 31% to office supply stores and 30% to college bookstores).
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The wait-and-see approach is leaving 20% of back-to-school budgets, or some $5.5 billion, up for grabs at the moment, Deloitte said.
Dive Insight:
Black Friday was once a one-day retail frenzy, but those days are gone as retailers introduce deals earlier and earlier and consumers patiently scour the landscape for the best prices. The same thing is happening to the back-to-school season, which is retail's second most important shopping arena.
Nearly half (47.8%) of American adults (more than 117 million) now hold off purchasing things in the lead up to holiday sales, with a one- to two-month wait the most common, followed by "a few weeks," according to comparison site Finder.com. In fact, 5.9% wait an entire year, that survey found.
Retailers offering back-to-school deals don't even have the benefit of a day to focus on, making this season even more amorphous when it comes to marketing. While the NRF found that more consumers plan to start at least three weeks before school begins (77% of school-age, up from last year’s 74% and 64%, and 67% of college-age, same as last year but up from 51% a decade ago), 89% of back-to-school and college shoppers still have half or more of their purchases left to complete. Of those, more than half are still waiting for the best deals for the items on their lists.
"Back-to-school shopping tends to be price-focused as parents look for promotions and mass merchants for the best deals," Rod Sides, vice chairman of Deloitte LLP and U.S. retail, wholesale and distribution leader, said in a statement. "But when we look below the surface, we notice several distinctions between high and low-income households and the way people shop for specific items like clothing, technology and supplies. The potential lesson for retailers is that back-to-school may require them to do more than compete on price alone or try to sell across all categories. Survey results show it may be about delivering the best product or experience to customers in specific categories."
And many consumers are moving certain products off their back-to-school lists entirely, picking them up throughout the year instead, according to the NRF. Although consumers do plan to buy personal care items, gift cards and food for school, they may plan to buy them as needed throughout the school year rather than stocking up for the entire semester, according to NRF Vice President for Research Mark Mathews.
But the biggest change in back-to-school spending behavior is in electronics, he said. "Items like laptops, tablets and smartphones are now an everyday part of household life and aren’t necessarily a purchase parents save for the start of the school year, resulting in the slight decrease in spending for this category," Mathews said in a statement.
