Deloitte predicts back-to-school spending will hit an all-time high

0

According to Deloitte’s annual forecast, seasonal back-to-school spending is expected to hit an all-time high, while back-to-school spending is expected to increase 10% year-over-year.

Key points to remember

  • Back-to-school spending is expected to hit a new high, up to $34.4 billion for K-12 students, or about $661 per student; back-to-college shoppers are expected to spend $28.3 billion, or about $1,600 per student.
  • More than half (57%) of back-to-school shoppers surveyed are concerned about inflation, though many remain committed to buying needed supplies, which could drive spending per student up to 8%.
  • Back-to-school shoppers surveyed expect to reduce their spending on tech products by 8% year-over-year, while those shopping for college are expected to increase their tech spending by 22% from 2021.
  • Despite stock-outs and inflationary concerns, back-to-school shopping season is returning to a more typical schedule with 53% of K-12 spending expected to occur by the end of July.
  • In the wake of the pandemic, K-12 parents said they plan to spend on products that encourage mental well-being, including items for after-school activities. Parents concerned about their child’s mental health (50% of respondents) plan to spend 8% more than the average back-to-school shopper.
  • Many parents of K-12 students are willing to spend more on sustainable products, with 50% choosing products that are environmentally friendly or responsibly sourced when possible. Forty-seven percent of back-to-college shoppers surveyed also choose sustainable products when possible and report spending 19% more than the average back-to-school shopper.

why it matters
After two years of disruption caused by the COVID-19 pandemic, parents are ready for a more “normal” approach to shopping for the upcoming school year. However, inflation and other social and economic pressures will likely add complexity to the start of the school year. Families seem willing to spend, even though 36% of K-12 parents surveyed are worried about upcoming school-related payments. This is further compounded by expectations that the economy will weaken over the next six months for 54% of K-12 parents surveyed (down from 28% in 2021). Spending would focus on more traditional supplies as well as clothing and accessories for K-12 students, as technology investments wane after two years of growth. However, for parents of college-aged children, the same digital onboarding that has been underway since the pandemic is expected to continue to influence spending.

Parents plan to spend despite inflation and cost concerns
Following the disruptions of the past two years, most parents are now facing rising inflation and financial problems. Despite more pessimistic economic sentiment, back-to-school spending is expected to rise to $34.4 billion this year according to respondents, or about $661 per K-12 student, up 8% from last year. ‘last year.

  • More than half (57%) of K-12 parents surveyed are concerned about rising prices for back-to-school products due to inflation, especially as one in three households say be in a worse financial situation than last year.
  • Despite worries about the economy and inflation, parents are determined to stick with the back-to-school season, as 37% of respondents expect to spend more year-over-year.
  • Although concerns about stock-outs are still high (63% of respondents expect back-to-school stock-outs), the shopping window is expected to return to a more normal pattern, demonstrating that consumers can feel more comfortable managing supply chain issues. That said, shopping season is likely to happen a little earlier than usual, with 53% of respondents expecting back-to-school spending to take place by the end of July.
  • Higher costs and a lack of inventory could jeopardize brand loyalty, as 77% of shoppers surveyed say they will swap brands if prices are too high or their item is out of stock.

“Even though economic and inflationary pressures are at the heart of our concerns, parents seem resilient and determined to ensure their children have the school supplies they need to succeed this year. Retailers who remain cognizant of this resolve, while mindful of addressing shoppers’ lingering economic concerns, could gain trust and position themselves strongly,” said Nick Handrinos, Vice President and US Head, Retail, Wholesale & Distribution and Consumer Products, Deloitte LLP

Technology slows after pandemic surge in K-12
While the past two years have ushered in a new wave of online learning, shopping, and spending, back-to-school 2022 feels more traditional. Overall spending on technology products is down, while spending on traditional products is up.

  • After a pandemic-fueled tech frenzy, K-12 spending this year will likely focus more on clothing (up 18% for respondents year-over-year) and school supplies ( up 7%). Spending on technology is expected to fall by 8% this year for respondents, as many parents purchased necessary technology supplies last year to meet virtual or hybrid learning needs. Additionally, most parents (81%) say their child’s school provides the devices and other technology students need.
  • In-store shopping is set to see a resurgence according to survey respondents, accounting for 49% of overall back-to-school spending, up from 43% in 2021.
  • Digital shopping channels have reached a saturation point. Although still higher than pre-pandemic levels, consumers are indicating digital fatigue. The online share of back-to-school spending of K-12 parents surveyed has increased from 39% in 2021 to 35% in 2022. Only 35% of parents surveyed plan to leverage social platforms for their purchases this year , up from 41% in 2021. 2021. While Gen Xers use social media to research deals, Millennials are more likely to seek reviews and advice.
  • With online shopping, free delivery is key, with 79% of respondents saying it’s more important than fast delivery.

As Families Reevaluate Their Priorities, Consumption Patterns Are Changing
Over the past few years, the pandemic has caused many people to focus on mental wellness and sustainability. Spending habits seem to be changing as more and more families look for opportunities to meet these priorities.

  • Following the uncertain social landscape of the past few years, many K-12 parents are focusing on their child’s overall mental well-being. Half (50%) of respondents worry about their child’s current mental health; therefore, 36% have purchased products or services in the past year to address this issue.
  • Environmental sustainability is also a priority for many, with half of K-12 parents surveyed saying they choose eco-friendly or responsibly sourced back-to-school products whenever possible. Those who do not select sustainable products often cite affordability as their primary concern.
  • Both of these priorities tend to drive shoppers to spend more – surveyed parents concerned about mental wellbeing say they spend 8% more than the average back-to-school shopper, while those choosing sustainable options expect to spend 22% more.

Back-to-school spending still depends on digital
As the pandemic continues to reshape higher education, the influence of digital trends remains. Returning college parents surveyed plan to spend $28.3 billion this year, or about $1,600 per student, up 10% from those surveyed last year.

  • Despite economic concerns, parents of college-aged students appear committed to spending, driven by digital integration into the college experience. Spending on tech products is expected to grow 22% year-over-year according to respondents, up from 16% growth in 2021, outpacing other categories including household appliances and supplies (up 12%), clothing (up 10%) and dormitories. or apartment furniture and supplies (down 15%).
  • With 41% of students surveyed attending college in online or hybrid mode, surveyed parents plan to spend the same or more on online learning resources (51%) and purchase fewer traditional college supplies (53%) .
  • Up to 77% of buyers surveyed are likely to leverage sources of credit to fund their back-to-college expenses, up from 70% in 2021.
  • The share of back-to-school shopping in-store is expected to increase for respondents to 44% in 2022, from 39% in 2021. As retailers continue to offer more tech-enabled shopping tools, parents of students are ready to take advantage of it: 59% of respondents will use smartphones for back-to-school shopping (vs. 49% in 2021), 30% will use social media (vs. 22% in 2021) and 44% will use emerging technologies ( compared to 29% in 2021 and 26% in 2019).
  • Stock-outs are a concern for university shoppers, with 68% of respondents expecting to encounter them, driving 56% of planned spending by the end of July.
  • Many college families are also concerned about the mental well-being of their students (49% of respondents) and are looking for solutions. More than 1 in 3 (36%) of respondents will spend on products or services to address the mental health of their students.

“The continued digitization of the college experience is impacting everything from how students learn to where families buy supplies and what they buy. Online and hybrid schooling options open new doors for many to start their college careers, while still others seek to level the playing field after more than two years of pandemic schooling, spending more to overcome both learning loss and mental well-being issues. Retailers that meet these needs with a shopping experience that leverages the use of digital technologies could be well positioned to drive growth,” said Rod Sides, Deloitte Insights Leader, Deloitte.

Share.

Comments are closed.