Consumers Predicted To Not Break The Bank On Back-To-School Shopping This Year

As retailers aim to get ahead of the class by offering consumers back-to-school specials now, they still may not make the grade when it comes to sales for what is known to be the second largest selling season of the year. According to the NRF’s recently released Back-to-School Spending Survey, sales may struggle. The survey reveals that U.S. consumers are expected to spend about $68 billion on back-to-school and back-to-college items this year, down 9.3 percent from $75 billion last year.

NRF President and CEO Matthew Shay attributes this slight decline to parents feeling less compelled to restock and replenish their children’s supplies each year.

Also pointing to the potential for weakened back-to-school spending is the recent retail sales report. U.S. retail sales declined in June as households cut back on purchases of automobiles and a range of other goods. This, along with a weakened labor market and a dip in small business confidence, could be responsible for the expected reduction in back-to-school spending.

Additional trends that could contribute to sluggish back-to-school sales projections include:
  • For Generation Z, Clothes Matter Less: The NRF survey reports college students and their families are spending less than ever on school supplies, including apparel. According to the Survey, they plan to spend an average of $899.18 on back-to-college items such as dorm furnishing, electronics, apparel, food and school supplies, down from a projected $916.48 last year. Generation Z, following in the path of Millennials, has a reputation for not frequenting malls or spending the majority of their income on apparel.  According to Piper Jaffray’s Spring 2015 Taking Stock With Teens Survey, teen wallets continue to shift from possession-based categories toward “shareworthy” experiences like events. The Piper Jaffray Survey also notes that while teens command $75 billion of discretionary spending, they have morphed into budget-conscious value seekers due to the 2008 recession.
  • Back-To-School Shopping is About The Save, Not The Spree: Gone are the days of the back-to-school shopping spree. For consumers today, it is all about the save and securing the best deals and deepest discounts possible. Consumers are extending their back-to-school shopping over the course of the entire summer break and are using the Web to compare prices and research deals. This is forcing retailers to distinguish their product offerings, while also prompting more promotions throughout the summer.  And while the Web is helping consumers save, many are still opting to purchase in brick-and-mortar stores. The International Council of Shopping Centers’ (ICSC) BTS Consumer Spending Survey reports 42 percent of respondents who still prefer the opportunity to physically examine merchandise before purchasing, while 37 percent like the convenience of one-stop shopping.  It also revealed the importance of omnichannel continues to grow significantly, as 79 percent of respondents plan to use a mobile device while shopping in-store for BTS.

While the NRF projections are tepid, it is worth noting that the ICSC BTS Consumer Spending Survey depicts a more bullish picture, sharing that about 67 percent of consumers plan to boost purchases this season from last year.  Given the conflicting pictures painted by both NRF and ICSC, it will be interesting to watch the season unfold and if there is any resulting impact on holiday shopping.  Tell us, do you think back-to-school sales will soar or sink?