After Cutting Back in 2015, Back-to-College Spending Expected to Increase
August 04, 2016
There’s some promising evidence that a long-awaited rise in consumer spending is finally materializing—and it bodes well for retailers looking for a back-to-school boost in sales this season. “Heading into the second half of the year, we are optimistic that overall economic growth and consumer spending will continue to improve as they did in the first two quarters of the year,” said Matthew Shay, president and CEO of the National Retail Federation (NRF). That optimism is backed by a lift in retail sales for the first six months of 2016 of 3.1 percent over the same period in 2015.
In terms of spending, this year’s back-to-school season is expected to reach $75.8 billion—up from $68 billion last year. Students and parents cautious with last year’s budgets are expected to loosen their wallets and spend a little more this year. “Families are still looking for bargains, but there are signs that they are less worried about the economy than in the past,” said Shay.
In terms of the kind of trends retailers might expect from student and parent spending this year, industry experts are focusing on everything from who is actually making the purchasing decisions to the role that technology might play to the kinds of products most likely to be featured in this year’s back-to-school season.
Back-to-College Prediction and Trends
Students Take on More Financial Responsibility With retailers expecting a boost in this year’s shopping season, exactly who will be footing the bill is a matter of opinion. Most notably, students said they were willing to contribute more to this year’s budget, according to Deloitte’s Back-to-College Survey. “College-aged students are taking on more financial responsibility and have a larger say in purchasing decisions during back-to-school shopping.” said Rod Sides, Deloitte vice chairman and retail and distribution practice leader. “Surprisingly, they’re even willing to contribute more to the budget than parents expect.” While 57 percent of college students say they will contribute over half to this year’s budget, mom and dad aren’t buying it. Only 16 percent of parents expect their children to contribute that much, Deloitte’s survey said.
Getting a Head Start More college consumers are getting a jump on back-to-school shopping compared to last year. According to NRF’s Back-to-College Survey, 26 percent of students and parents will start their shopping one to two months before school begins, compared to 24 percent the year before. The survey also revealed that shoppers who plan to spend early in the season also expect to spend more money than those who wait until later.
Doing Their (Shopping) Homework
While bookstores and college stores are still the top destinations for back-to-college shopping for students and parents, students expect to purchase more of their college supplies and technology online, with parents preferring the physical store as their top choice. And while Deloitte reports that more purchases will take place in brick-and-mortar stores, 82 percent of students and 74 percent of parents will do their homework beforehand, researching products online before purchasing in-store. Another emerging trend amongst students is free shipping and pick up. According to research from Barnes & Noble College, 44 percent of students will take advantage of buying online with free pick up in the campus store.
While clothing and school supplies top most back-to-school shopping lists, technology is a close second for many college students and their parents. Twenty-nine percent of respondents shopping for technology-related items said they would spend an average of $456 on computers (including software, hardware, and accessories), and $286 on gadgets like tablets, smartphones and wearables, according to the Deloitte survey. An emerging trend is the purchase of fewer traditional school supplies. According to that same survey, 31 percent of parents said they were buying fewer school supplies because their child is replacing many of those items with technology.
What to Buy
So what will students and parents be buying this year? While standard back-to-college purchases such as school supplies and clothing remain the top-sellers for both groups, 55 percent of students said they are more likely to spend on technology compared to just 44 percent of parents, according to Deloitte. But when it comes to buying textbooks and school supplies, 36 percent of students said they will be bearing the costs of those purchases compared to 30 percent of parents, according to the Barnes & Noble College and Money “Value of College” Study.
What’s in a (School) Name?
Showing school spirit is still important with 31 percent of students and 27 percent of parents planning to purchase college-branded apparel and gear for back-to-school, according to the Deloitte survey. The college tee ranks number one as the favorite college-branded item for 60 percent of students, according to research from Barnes & Noble College. Sweatshirts come in second with 50 percent, followed by mugs, school supplies and personal accessories.