Back to School 2023 spending is in full swing. Much like last year, families are shopping early and often to try and mitigate the financial hit that comes with making sure students are stocked with pocket folders, backpacks, laptops and extra-long twin dorm mattress sheets.
For many brands and retailers, Back to School marks the beginning of peak shopping season. These final months in the year are crucial for revenue generation and meeting annual goals. And because so much rides on the success or failure of sales numbers, merchants must have their fingers on the pulse of the market so they can pivot and adjust accordingly.
DTC ecommerce channels are uniquely capable of accommodating such pivots and changes nearly instantly. So brands that include online stores in their channel mix are well positioned to make decisions based on market and consumer behaviour.
Back to School 2023 Trends and Predictions
What can brands and retailers expect this Back to School season? Many of last year’s trends are also this year’s trends including increased spending and earlier shopping. While these trends bode well for some industries, like apparel, other segments, like consumer electronics, should brace for sales uncertainty.
This is how a variety of industry experts expect the season to shape up.
Online and Omnichannel Shopping Gain Popularity
Where consumers shop is as important as what they shop for. Merchants need to offer the right products on the right channels. And with each passing year, research indicates that consumers are using multiple channels during the purchase cycle.
- 58% of consumers will shop both in-store and online channels
- 42% of shoppers plan to use emerging technologies to make a purchase
- 52% of Gen Z prefers to shop online
Spending Set to Increase
The current economic situation in the United States seems to be solidifying. Inflation has eased comparatively, and the anxiously predicted recession has not – to date – materialised. So on the one hand, the American economy seems to be stabalising. And yet prices remain high enough that many Americans look for ways to pinch the pennies they have.
Against that backdrop, CoreSight Research says that Back to School sales will increase by “a modest 1.2% year over year to $31.2 billion.” The National Retail Federation (NRF) puts 2023 Back to School spending higher at $41 billion.
Regardless of how the final numbers come out, shoppers are bracing for sticker shock. According to an NRF survey, 80% of shoppers expect to see higher prices on Back to School and Back to College items this year.
Shoppers Hit Stores Early
Whether to take advantage of sale pricing or to spread out spending over multiple paychecks, consumers are shopping for Back to School and Back to College items well before August.
In fact, CoreSight Research estimates that 63% of shoppers will start purchasing in July or even earlier. And 66% of shoppers reported planning to shop Amazon Prime Day to snag deals ahead of the school year. That percentage is up from 62% in 2022.
Even with consumers spreading out spending over weeks and months, Labor Day weekend could see a spike in sales if last year’s trend carries forward. In 2022, retailers saw a 27% uplift in sales over Labor Day Weekend.
Retailers should keep an eye on timing trends. The early shopping trend may carry through to the holiday buying season. Merchants that prepare their operations and technology infrastructure now are better positioned to handle shopper demand and provide excellent customer experiences that improve loyalty.
Apparel Sales Up, Electronics Sales Down?
Analysts are unanimous in their consensus that apparel sales will increase this year. Shoppers and parents report an increased awareness of fashion trends and 85% of them plan to purchase apparel. This number is up from only 71% last year. The NRF reported higher expectations with 95% of their survey respondents planning to buy apparel.
But while industry analysts are united on their projections for clothing, the outlook for consumer electronics is varied. Again, CoreSight research predicts that sales in the industry will fall, while NRF says there will be an uptick in electronics purchasing.
The diverging predictions are illustrative of ongoing market uncertainty and drive home the need for brands and retailers to shore up operations, promotions and technology to meet demand.
Regardless of the sales trajectory, prices for consumer electronics are expected to follow in the footsteps of other categories and increase.
Marketing to Back to School Consumers
Back to School shoppers present an interesting marketing challenge. The people purchasing school supplies are not the end users of those supplies. In most situations, adults are spending the money and children are the beneficiaries of those purchases. So who should brands and retailers market to? Students or the adults with the credit cards? As most merchants will tell you – you must market to both.
What Adults Want
Economic concerns persist among US adults so they are looking for ways to stretch their Back to School dollars. According to the NRF, survey respondents plan to:
- Engage in more comparative shopping online
- Shop for sales more often
- Buy more generic or store brand products
Even with the weight of increased prices dragging down household budgets, adults still want to make sure their students return to the classroom well-equipped. The NRF survey showed a decrease in the percent of shoppers that will “make due with last year’s supplies” as a cost-cutting measure.
What should retailers do? As adults balance economic concerns with the desire to provide for students, brands and retailers should execute thoughtful discount strategies. Promotions and discounts will bring shoppers to stores and online sites. Merchants that know their audience can create promotions that resonate and drive revenue.
What Students Want
Because students are not generally financially responsible for Back to School and Back to College purchases, they prioritise story and value alignment.
Gen Z and Gen Alpha make up the bulk of students. Surveys consistently show that these generations are more eco-conscious and are influenced by media – particularly social media. According to ThredUp’s annual report, 83% of Gen Z have shopped or are open to shopping second hand. The same study found that 47% of Gen Z shoppers refuse to buy from non-sustainable apparel brands and retailers.
For Gen Alpha’s part, research is still developing but early indications predict that this cohort will be as, if not more, ethically demanding than Gen Z. They will hold brands to higher standards than their older counterparts.
In addition, these youngsters hold tremendous sway over their parents’ purchasing decisions. According to the NRF, 87% of parents say their children influence their purchase decisions. And who or what influences the children? Likely, digital media. Gen Alpha is not only a generation of digital natives, but experienced pandemic lockdowns during crucial formative years. This may mean that they not only are more exposed to digital spaces but actually prefer them.
What should retailers do? Brands must embrace sustainability and tell their sustainability stories. Brands should also lean into digital marketing, including metaverse and metaverse-adjacent channels like Roblox.
The Takeaway
Analysts agree that as prices are going up, shoppers are looking for ways to economise like spreading out spending by shopping earlier and spending more time seeking sales. The areas in which these same analysts seem to disagree speaks volumes about the still uncertain state of consumer sentiment and the retail market.
Now, more than ever, brands need to partner with industry experts who know how to reach new customers and create localised experiences that build loyalty. There is tremendous growth potential, but there is also no room for error.
ESW enables the world’s best-loved brands to grow their businesses. We accelerate speed-to-market, assume legal and regulatory responsibilities and provide a vetted logistics experience that’s ready to go on day one. Contact us today to talk about your brand’s goals.
