For American retailers, the back-to-school season is seen as the dress rehearsal for the holiday shopping main event.
Back-to-school spending is a key indicator of how Americans will spend during the holidays, and consumer trends in August and September can signal how businesses need to pivot for the rest of the year.
The good news is back-to-school spending, like holiday gifts, is something consumers consider a priority, and they’ll budget in other ways in order to get their children the supplies and clothes they need for school.
A recent survey by the National Retail Federation found 40% of shoppers are cutting back on discretionary purchases to spend on necessities. And they consider back-to-school purchases to be a top necessity, according to Mark Matthews, Vice President of Research Development and Industry Analysis for the NRF.
“Necessities are the most protected segment of retail, and getting kids off to school with clothes that fit and all the accessories they need is definitely a necessity,” Matthews said in a recent webinar.
The NRF estimates Americans will spend $111 billion this year to prepare their children for elementary school, high school, and college.
Here are five ways businesses can respond to changing consumer behavior to capture a greater share of spending during back-to-school season and beyond:
|1||Double down on deals and promotions|
This summer, inflation out-ranked COVID-19 as consumers’ top concern, according to the NRF survey. Retailers are responding with marketing emphasizing how they can help parents save money, and school supplies priced at $1 or less to get shoppers in their doors.
Walmart and Target kicked off their back-to-school campaigns with aggressive price discounts.
Walmart also scrapped planned ads and replaced them with ones that address inflation concerns and feature low prices. The nation’s largest retailer is selling more than 100 of the top school supplies – items like notebooks, pens, scissors, and markers – at $1 or less.
Target is also offering $1 deals and telling parents they can find nearly everything they need for back-to-school for $10 or less. Target is also reaching out to budget-conscious college students with a new offer this year of 20% off on any one item for students who are members of the Target Circle loyalty program.
|2||Make the season longer|
All the major U.S. retailers began offering back-to-school deals earlier than usual, and have also extended them later than ever, well into September.
Nearly two-thirds of consumers started or planned their shopping earlier this year to avoid price hikes and out-of-stock issues, the shopping center trade organization ICSC found in its 2022 back-to-school survey.
Those shoppers also are likely to be shopping into September, as they hold off on some purchases while searching for the best price. Consumers told the NRF this year they’ve delayed some purchases because they’re waiting for the best deals.
Target added six weeks to its annual Teacher Prep sales event this year, extending it to September 10. The event gives teachers 15% off on school supplies.
|3||Offer curated online shopping guides and one-click buying lists|
Retailers have long offered back-to-school shopping lists in their stores as a way to drive additional purchases. Now, they’re combining those shopping suggestions with ways to order everything on the lists all at once online.
Kroger offers one-click school supply kits with 20 or more items grouped according to grade level, from pre-kindergarten to high school.
Target has expanded its app to allow shoppers to access classroom supply lists or a college student’s wish list registry, and easily place orders from those lists.
Walmart created an online classroom hub, letting teachers post lists of supplies students will need and create supply wish lists.
|4||Use best-in-class tech tools|
Walmart this year added an augmented reality tool to help college students visualize how furniture purchases will look in their dorm rooms. The augmented reality feature can be accessed by clicking on the “View In Your Space” button on furniture and certain dorm accessories.
Shoppers increasingly want augmented reality, virtual reality, and livestreaming shopping experiences, according to a recent survey by brand and marketing tech company BazaarVoice. The survey also found despite inflation, consumers said an enhanced shopping experience, in some cases, is more important than price.
|5||Court the key decision makers – the kids|
ICSC’s back-to-school survey found 70% of parents said their children have significant influence over back-to-school purchases and are generally allowed to choose the styles and products they prefer.
Kohl’s is responding to diversity-conscious and socially conscious kids this year by featuring emerging brands that give back to charities in their back-to-school shops, such as the Ivory Ella line of kids clothing, which donates 10% of its net profits to Save the Elephants and other charities. Kohl’s also expanded its collection of adaptive fashions for kids with disabilities and broadened its offerings of gender-neutral clothing.