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Dive Brief:
- Even with inflation running amok, back-to-school spending might reach an all-time high this season, according to a new report from Deloitte. Over half of surveyed back-to-school shoppers expressed inflation concerns, but many still plan to purchase needed supplies.
- Spending for the category is expected to reach up to $34.4 billion for K-12 students and $28.3 billion for college shoppers, per the report.
- While 37% of back-to-school shoppers are planning to spend more year-over-year, the report shows that brand loyalty is at risk due to higher costs and lack of inventory. Seventy-seven percent of surveyed shoppers say they will go to a different brand based on better pricing and inventory options.
Dive Insight:
Since the onset of the pandemic, school environments have been through a whirlwind of changes. That said, the new report from Deloitte shows that back-to-school shopping is back in full swing — despite the fact that inflation rose past estimates to 9.1% in June, according to the U.S. Bureau of Labor Statistics. One-in-three households say they are are in a worse financial situation than last year, according to the Deloitte report.
"Even as economic and inflationary pressures sit top of mind, parents seem resilient and determined to ensure their children get the school supplies needed to succeed this coming year. Retailers that remain conscious of this determination, while being mindful to address shoppers' ongoing economic concerns, could earn trust and position themselves strongly,” Nick Handrinos, vice chair and U.S. leader for retail, wholesale & distribution and consumer products at Deloitte, said in a statement.
The growing consumer interest in improving mental wellness and using more environmentally friendly products typically leads shoppers to spend more. K-12 parents concerned about their child's mental health plan to spend 8% more than the average back-to-school shopper. Meanwhile, 50% of those surveyed want to choose more sustainable product options when available; those who choose to shop more sustainable options spend about 22% more.
Although college shoppers plan to increase spend on technology, back-to-school consumers surveyed expect to decrease technology budgets by 8% year over year.
The report follows news last week that Target is deepening its back-to-school deals this year. Included in its updated deals, its Teacher Prep Event, offering a 15% discount for educators, is now extended by about six weeks. This comes as the retailer deals with excess inventory issues and canceling orders to balance stock.
A June Mastercard Spending Pulse report also predicts a higher spend for back-to-school shopping this year, saying the season between mid-July and Labor Day will grow by 7.5% compared to 2021.
via https://www.aiupnow.com
Dani James, Khareem Sudlow
