Each year, back-to-school shopping is a rite of passage for the students and a milestone for their parents, who get to celebrate their children’s growth and maturity with a deluge of age and size-appropriate purchases.
This year the National Retail Federation predicts parents will spend $37.1 billion on back-to-school (BTS) shopping, a 9.4% uptick from last year. Deloitte, using a different methodology and survey sample, expects an even stronger bump this year, with total spending rising some 16% over last year.
Regardless of the source, parents are prepared to spend more money this year on their children’s back-to-school needs, with Deloitte finding 78% of families feel they are in a similar or better financial situation than last year.
Yet with each passing day, uncertainty prevails about what their children’s actual back-to-school experience will look like. Because of the rise of the more contagious Delta variant, confusing messages from the CDC and with no vaccine approved for children under twelve, parents and school boards are left reeling.
These uncertainties may delay parents’ spending, despite their well-intentioned plans to complete back-to-school shopping early. While Deloitte found parents planned to make nearly 60% of their BTS purchases by the end of July, NRF found that fewer than 20% of parents had completed their BTS shopping in early July, when its survey was conducted.
The longer parents wait, the more likely they are to disappoint their kids in securing the must-have items on their BTS shopping list, including backpacks, sneakers and the most in-demand items of all, technology tools and gadgets.
Technology is the new must-have BTS accessory
“For the last couple of years, we’ve been seeing the move to tech, but it is even more dramatic this year,” says Rod Sides, Deloitte’s vice chairman and U.S. leader in retail and distribution.
“We see a 37% year-over-year increase in spending on technology products this year for computers and electronic gadgets,” he continues. This follows a 28% increase in technology spending from 2019 to 2020.
What surprises Sides is that despite all the growth in tech spending last year, necessitated by in-home schooling, this year he is seeing an even a greater demand for more technology purchases.
“A lot of parents are recognizing if their children are going to keep up, they are going to have to make those investments in technology,” he shares.
And even more surprising is the kind of technology devices parents will be splurging on this year: gadgets, such as cell phones, tablets and e-readers and wearables, as well as digital subscriptions for learning programs. E-learning resources will get a bump as many parents feel their children’s learning fell behind last year.
Spending on tech gadgets is expected to grow 48% from last year and to reach parity with spending on computers and hardware, $5.9 billion each. By contrast, computer spending will be up some 28% this year.
Getting the most up-to-date wearables and carrying the most stylish gadgets is replacing having the most fashionable outfits this year, with spending on clothing and accessories basically flat over last year. Amazon, for example, notes that cases for consumer electronics are up 86% year over year as of April with the OtterBox case for iPhone 12 among its hottest items.
“Tech is taking over this year,” Sides reflects, as it also reduces the necessity for traditional school supplies, like paper, pens and notebooks, which will advance only slightly this year.
Technology powers BTS shopping
Technology will also power parent’s shopping this year. The share of BTS spending online will continue to advance.
Following a not unexpected rise in online spending last year and a drop in in-store shopping from 2019 to 2020, which went from 56% to 43% share, parents plan to hold the line on their spending in-store. By contrast, they expect to increase their spend online, rising from 37% in 2020 to 39% this year.
“If you look back before the pandemic, the amount of spending in-store was much higher and online much lower,” Sides says. “Today the two lines – percentage of share in-store versus online – are converging. Our hypothesis is that we have seen a permanent shift in the mix of channels. A lot of parents have figured out it is easier to buy online, which is assisted by the new ways retailers are adapting with buy-online-pickup-in-store and curbside pickup.”
As for the brick-and-mortar stores where they plan to shop, mass merchants and dollar stores will be their favorite destinations, while specialty clothing stores, office supply and tech stores, fast-fashion apparel retailers and traditional department stores will only see a slight uptick in traffic.
However, mass merchants will lose ground this year, with some 74% expecting to shop in these kind of stores compared to 81% last year.
Technology will also help parents make the right choices for their kids’ BTS needs. Many more parents will turn to social media to help with shopping, rising from 25% last year to over 40% this year.
Of those parents using social media, they are interested in not just viewing product offers, but 42% are visiting retailers’ social media sites to determine if they are worthy of their business. This calls on retailers to make their personality and purpose clear, not just on the website but on their social media channels as well.
And more BTS shoppers plan on using advanced tech-enabled shopping tools this year, like shopping with a voice assistant, digital wallet, buy buttons on social media posts and virtual reality. The younger age of school-aged children parents, now leading-edge Millennials and trailing-edge GenXers, makes for easier adoption of these advanced e-commerce capabilities.
“The shift to technology is the macro story this year,” Sides concludes. “Digital is pervasive and digital engagement is accelerating throughout the BTS shopping journey, affecting what items are needed for schooling and how and where parents seek them out.”