Dive Brief:
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Parents will increase their back-to-school spending by 33% over last year, shelling out an average $1,642 in 2016, up from $1,239 in 2015, according to the latest American Express Spending & Saving Tracker conducted by Ebiquity.
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The boost comes in part from increased spending on technology, mobile devices and musical instruments. Parents will spend an average $505 on technology, with 92% saying kids need the devices for school this year, compared to 82% last year, according to the study.
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The increase in back-to-school spending could hit other purchases, however: 78% of parents are curbing their own spending in order to afford their kids’ back-to-school expenses this year, up from 74% in 2015.
Dive Insight:
The study from American Express, which shows a significant jump in back-to-school spending this year, bolsters the National Retail Federation’s contention that the 2016 back-to-school season is a “stock up” cycle rather than a “make do” cycle. The NRF survey found that U.S. families will spend $75.8 billion in the run-up to the new school year, compared to last year’s $68 billion.
The back-to-school season is nearly as important as the end-of-year holidays, especially for some retailers such as office supply stores, general merchandisers and, increasingly, Amazon. The Rubicon Project found that e-commerce giant Amazon is the number one technology retailer for back-to-school shopping — the first time it's not a brick and mortar store.
Similar to other studies, the American Express report found that technology devices are increasingly on the shopping list during back-to-school, especially as devices become more important in education. 59% of parents will be buying computers/laptops, tablets, phones, or other mobile devices for school purposes, according to the study, more than last year (46%). Mobile devices in particular are increasingly becoming a classroom item: More than half (52%) are buying a mobile device to prepare their child for school, compared to 41% last year, spending on average $172 this year as compared to $125 in 2015.
Parents plan to reduce other expeditures as a result. Much of those cuts were found to come out of entertainment budgets (42% compared to 38% in 2015), travel (40% compared to 32% in 2015), and activities like club memberships and hobbies (28% compared to 21% in 2015).
