Households with school-age children (pre-school through 12th grade) plan a big jump in back-to-school spending – an increase of 12% or an average spend of $675.00, but three-quarters of consumers (75%) intend to wait until the end of August and shop just before schools open, according to the annual survey conducted by Brand Keys, the New York-based brand and customer loyalty research consultancy.
Average spends and increases for major back-to-school categories, are:
Clothing: $426.00 (+3%)
Computers/Electronics: $220.00 (–0–)
Shoes (athletic & dress) $130.00 (+4%)
Supplies $ 97.00 (+2%)
Books/Study aids $ 23.00 (+3%)
The Brand Keys survey includes assessments from 10,000 households, drawn from the nine U.S. Census regions. Interviews were collected by telephone and central location intercepts to account for the surging number of cell-phone only households.
“Whatever they spend, the time between back-to-school shopping and the first day of the school year has been growing shorter and shorter every year,” noted Brand Keys founder and president, Robert Passikoff. “Yes, reports are that consumers are out shopping, but that view has been exacerbated by retailers advertising offering those good-better-best over a longer and longer period of time. So people are looking, but timing is everything – in retail and in research.
When you interview consumers is very nearly as important as what you ask them. Ask too soon and you get exaggerated and illusory figures. You need to get the timing right to accurate get measures of what consumers really think and do – not what they say they’re thinking about doing. Field the study at the optimum time and you get figures you can take to the bank,” said Passikoff.
Only Online Sellers to Benefit
Unlike other major purchase events like Mother’s Day, there’s a more unbalanced distribution in terms of retail outlets that will benefit from consumers’ back-to-school shopping. The breakdown of “preferred” retail categories this year versus last is:
Discount Stores: 92% (-3%)
Online 54% (+33%)
Department Stores: 50% (-8%)
Office Supply: 45% (-5%)
Specialty Retailers 30% (-10%)
Catalogs 29% (-6%)
Shoppers Waiting Longer
“While reported increases in spending are welcome by retailers, the money will be slower coming in than previous years. Consumers are continuing to put off purchases until they absolutely have to buy or feel there are no better deals to be had,” said Brand Keys’ Passikoff. “This year’s survey showed that three-quarters of consumers (75%) intend to wait until the end of August and shop just before schools open.
The genesis of the shorter back-to-school purchase cycle is a consequence of increased levels of consumer expectations. “Retailers have spent more than a decade teaching consumers they can get something cheaper if they wait longer or look a little harder,” said Amy Shea, Brand Keys EVP, Brand Development. “Every year consumers expect more, but it’s a serious error to suggest that the price-value equation is just about money. Value isn’t just pricing, it’s about brand, and brand differentiation. Retailers who manage their brands so that they are real surrogates for added-value will always benefit.”
The Leading Online Retailers
The largest change in preferred retail distribution platforms occurred in the Online category, where more consumers indicated that they were going online to search out deals and promotions, rather than to specific product outlets themselves. “Even in the face of that trend,” noted Shea, “online retailers like Amazon and Zappos still make the top 10 list of retailers showing the greatest increase in consumer intent-to-shop.” This year’s list includes:
4. J. Crew / Apple
5. TJ Maxx / Target
6. Bed, Bath, & Beyond
9. Best Buy
10. Macy’s / Radio Shack / Walgreen’s
“Yes, the economy always impacts overall spend. But this year only 80% of consumers indicated that the economy was impacting their back-to-school shopping. Happily, that’s down 7% from last year so given the ubiquity of merchandise range, overall quality, and pricing strategies, what brands get what piece of the academic pie will ultimately be determined by what retail brands actually stand for,” said Shea.
“Retail brand differentiation can become an authentic proxy for value – both emotionally and rationally,” echoed Passikoff. “The fact that consumers not only believe that, but actually behave that way in the marketplace, should be a fundamental lesson for all retailers.”