With consumer confidence rising and more young people in school, back-to-college spending is expected to hit an all-time high this year while back-to-school spending is expected to see its second highest spending level on record, according to the National Retail Federation’s annual survey conducted by Prosper Insights and Analytics. Total spending for school and college combined is projected to reach $83.6 billion, a more than 10% increase from last year’s $75.8 billion.
The National Retail Federation released its annual Back-to-School and Back-to-College survey, revealing increased consumer confidence in the current state of the economy. NRF President and CEO Matthew Shay weighs in on the survey results.
“Families are now in a state of mind where they feel a lot more confident about the economy,” NRF President and CEO Matthew Shay said. “With stronger employment levels and a continued increase in wages, consumers are spending more and we are optimistic that they will continue to do so throughout the rest of the year. As students head back to the classroom, retailers are prepared to meet their needs whether it’s for pencils and paper, shirts and pants or laptops and tablets.”
Spending stats
NRF’s survey shows that parents with children in elementary through high school will spend an average of $687.72 each for clothing, electronics, shoes and school supplies this year, for a total of $29.5 billion – an 8% increase from 2016. NRF provides a breakdown of the spending:
- $10.2 billion on clothing (purchased by 95% of respondents)
- $8.8 billion on electronics such as computers or calculators (60%)
- $5.6 billion on shoes (93%)
- $4.9 billion on school supplies (97%)
While an overall $10.2 billion will be spent on clothes alone, 60% of those surveyed plan on spending money on electronics – $204.33 each and $8.8 billion overall. As schools are shifting their teaching online in the classrooms, technology has become an important tool for teachers and students, and spending is increasing. For the first time in NRF’s survey, questions were asked about what types of electronics consumers plan to buy for the school year. Of those surveyed, 45% will buy a laptop, while 35% plan to purchase a tablet. One in four plan to purchase electronic accessories such as a mouse, flash drive or charger.
Back-to-college spending is even higher, with families planning to spend an average of $969.88, up from last year’s $888.71 and surpassing 2012’s record of $53.5 billion for an all-time record of $54.1 billion. More dollars are being spent on electronics for college students at $229.20 each and a whopping $12.8 billion overall. The increase in spending is driven, in part, by growing college enrollment. According to the National Center for Education Statistics, college enrollment has steadily increased over the last five years and is projected to reach nearly 21 million this fall. Back-to-college spending includes:
- $12.8 billion on electronics (purchased by 51%)
- $8.0 billion on clothing (78%)
- $7.5 billion on snacks and other food items (75%)
- $5.9 billion on dorm/apartment furnishings (51%)
- $4.5 billion on shoes (72 percent), $4.5 billion on personal care items (78%)
- $3.9 billion on school supplies (88%)
- $3.9 billion on gift cards (40%)
- $3.2 billion on branded collegiate gear (56%)
Spending early
Last minute trips to the mall is not the strategy of today’s consumers, as 27% of back-to-school parents planned to start their shopping a full two months before the start of the school year – compared to just 15% in 2007. Similar to back-to-school, 32% of back-to-college shoppers started their spending two months prior to the first day of school.
Many of the nation’s largest retailers begin their back-to-school promotions as early as June to secure their market share in the competitive category of back-to-school shopping.
“The selling environment is tough and retailers are looking to key selling seasons for some relief, and back-to-school merchandise has been going on sale before the Fourth of July vs. later in the month for the past few years. Online hasn’t helped as it can sell back to school all year round, and stores have to compete with this,” says Neil Saunders, managing director and retail analyst at consultancy GlobalData.
Big retailers were out in full force this summer with early promotions:
- Staples. The office-supply chain launched its Back to School Center on June 25th. It had deals like 28% off pencils and 66% off school glue. To plan the kickoff, the retailer looked at shopping patterns and sought feedback from parents and schools to determine the official first day of the season.
- Target. The mass merchandiser’s back-to-school sales kicked off July 8th, along with ads that began showing up regionally before they broke nationally on July 23rd.
- Walmart. The world’s biggest retailer began displaying back-to-school merchandise in stores the first week of July, increasing the number of back-to-school items that can be purchased online and picked up at one of its stores.
Where consumers shop
When it comes to where parents will buy, the lines between digital and in-store retail continue to blur. In 2017, 43% of consumers planned to use their smartphones to research products or compare prices while back-to-school shopping, compared with 33% just five years ago. For those early-bird Millennial parents, that number is closer to 60%.
Despite the growing role of mobile, only one in four consumers plan to use their phone to complete a purchase. Consumers may rely on their devices to find the best price on that trending superhero backpack or look up information on different laptop models, but once they’ve figured out what they want, they’re often heading into stores to make their purchase. In a flash poll NRF conducted among back-to-school parents, more than half said they still plan to shop mostly or entirely in-store for items such as apparel, shoes and school supplies during the 2017 back-to-school season.
Consumers continue to shop with a variety of retailers, and NRF’s survey shows that 57% of back-to-school parents will shop at department stores, 54% at discount stores, 46% each at clothing stores and online, and 36% at office supply stores. In comparison, 44% of back-to-college parents will shop online, 40% at discount stores, 39% at department stores, 34% at college bookstores and 29% at office supply stores.
In-store shopping still proves to be important to today’s consumers, but more and more, shoppers are choosing to make their purchases online. Not surprisingly, Amazon is leading the way for ecommerce back-to-school sales.
According to findings from market research firm One Click Retail’s recent “Office Product” research report, Amazon is at the forefront of retailers for back-to-school shopping. With a 35% year-over-year growth in just the first two weeks of this shopping season, it appears that Amazon is on the right path to hit a projected 80% of sales for the early shoppers of this season.
Spencer Millerberg, CEO of One Click Retail, commented on the significant increase in Amazon’s back-to-school sector and how online shopping has changed the way parents shop.
“While this early indication doesn’t necessarily predict the more sales-heavy remainder of ‘Back-to-School’ season, it does show early velocity,” said Millerberg. “It shows that parents are multitasking on Amazon during ‘back-to-school night’ for those supplies versus stopping by the store on the way home.”
Regardless of where and how parents are spending their back-to-school dollars, the increase in spending for back-to-school paints an optimistic picture of today’s economy, and as consumers spend more, the NRF is hopeful that consumers will continue to spend throughout the rest of the year.
