The twin threats of inflation and a looming recession have cast a shadow of uncertainty over the 2022 back-to-school (BTS) shopping season. But fears of economic downturns don’t seem to be deterring this year’s BTS shoppers. In fact, this year’s expected BTS spending is on par with last year’s record highs and will exceed pre-pandemic levels. Still, even as parents plan on spending more this year, they will also be more discretionary about what they buy.
According to a recent National Retail Federation (NRF) report, the 2022 BTS market will reach $37 billion. Parents of K-12 kids will most likely spend $661 per child on average, up from the $612 they spent in 2021. Total back-to-college spending is expected to reach nearly $74 billion, up from last year’s record of $71 billion. College students and their families anticipate spending an average of $1,199 on college-related items.
Inflation Is Top of Mind for Back-to-School Consumers
These findings come even as 33% of parents say their household finances have worsened since last year. Deloitte reports that 57% of consumers are concerned about the price increase of BTS products due to inflation. With inflation at a 40-year high, parents plan on buying fewer products, focusing more on necessities. The NRF also found more families plan to skip travel or rely on savings to pay for BTS supplies. To cut corners even further, parents also intend to reuse the school supplies they already have.
While inflation drives prices higher, U.S. consumers are without some of the financial resources they had last year including COVID-19 stimulus checks and advanced child tax credit payments. Before the BTS rush began, the New York Federal Reserve released data showing that American households saw a 13% increase in credit card balances. That’s the largest increase in 20 years. And while the Fed attempts to curb inflation with interest rate hikes, those increases only add to the credit card debt Americans already carry.
2022 Back-to-School Shopping Trends
Higher prices and economic worries are causing consumers to alter their back-to-school shopping behaviours this year. New patterns are emerging as parents tighten their belts. Here are some trends shaking up in this year’s BTS market.
Prices of School Products Will Be Higher
Inflation has not seriously impacted back-to-school products, but 84% of shoppers expect to pay more for them this year. Klover, a consumer data company in the finance space projected that Scotch Tape will be 70% more expensive than last year. The price of Sharpies will be up 55% and Elmer’s Glue will be up by 30%. In addition to putting BTS purchases on credit cards, families are likely to compensate by cutting back on nonessential purchases. So, while pencils and notebooks will continue to be must-have items, a new laptop or backpack might not be.
Many Consumers Will Shop Later This Season
According to the survey research company Morning Consult, many families have already started shopping for the coming school year. While 56% of BTS shoppers started buying in early July, experts predict most shopping will happen in late summer. These late shoppers are waiting for Labor Day and other seasonal sales to do the bulk of their BTS shopping.
Consumers May Spread Out Supply Spending
In addition to holding out for sales and sales tax holidays, consumers may also make purchases in phases. NPD’s Chief Industry Advisor for Retail, Marshal Cohen predicts “three semesters of spending”:
- Essentials first. Higher prices will cause shoppers to prioritise the basics such as school uniforms and required laptops or technology.
- Supplies and dorm setup. Shoppers will look for discounts and then open their wallets for pencils, backpacks and storage bins.
- Personal style. Cohen predicts that sales of clothing and shoes will peak last as students take fashion cues from their classmates to update fall wardrobes.
Sales Events Will Be Hot
But, no matter when they shop, significantly more consumers are planning their BTS shopping around retail sale events. A reported 8% of shopping on July’s Amazon Prime Day 2022 was for BTS products. In fact, 40% of consumers did at least half of their school shopping on Prime Day. According to NRF research, consumers will also comparative-shop online, opt for store brand or generic products, and use coupons more. Parents are likely to take advantage of “buy now pay later” options more than they did in the past.
Parents Will Consolidate Their Shopping
The NRF also reports that BTS shoppers plan to shop in one place rather than spread it out across multiple channels. While ecommerce will continue to be a go-to shopping destination, brick-and-mortar stores will also figure heavily in their choices. According to the group’s findings, 2022’s top BTS shopping destinations are:
- Online/ecommerce: 50%
- Brick-and-mortar/department stores: 45%
- Discount retailers: 40%
- Clothing stores: 37%
- Electronics stores: 28%
What Are Consumers Buying This Year?
Families will likely spend more on clothing and accessories this year while spending considerably less on electronics. Bundled school supply kits will also be popular BTS items this year. Kits typically include essential items like notebooks, writing utensils, crayons, erasers, glue sticks and rulers. Buying multiple products in one handy kit will be irresistible to parents looking to stretch their budget.
According to Deloitte, eco-friendly BTS products will also be hot selling items. 50% of parents will choose environmentally friendly or responsibly sourced products whenever possible. From plant-based glue and plantable pencils to wooden rulers to stainless steel lunch containers, green products will be in high demand. Eco-focused parents are likely to spend 22% more than the average BTS shopper. Parents will also look to eBay or second-hand stores to find used textbooks rather than buy expensive new books.
Parents are also increasingly concerned about their children’s mental health. Half of parents reported being concerned about their child or children’s mental health and 36% have purchased products or services to address the issue. Parents are paying for apps that help with relaxation and stress as well as extracurricular activities like music lessons or sports.
Retail Competition Will Be Intense
Even as U.S. wages continue to rise, unemployment remains low and people’s savings levels are stable, financial anxiety still looms large. Because 2022 shoppers will be more discretionary, the competition will likely be fierce for ecommerce and brick-and-mortar retailers alike. To compete, brands will wage price wars and enact markdowns to lure budget-conscious shoppers. For example, Old Navy announced a price freeze on its denim through the end of September. This year, parents will seek out whatever means possible to get their children the supplies and clothes they need for back-to-school.
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