K-12 parents weigh prices and priorities in preparation for
the new school year as they budget for necessities and make room
for a few indulgences
NEW
YORK, July 15, 2024 /PRNewswire/ --
Key takeaways
- Back-to-school spending for K-12 students will likely
remain flat, estimated to reach a collective $31.3 billion, or approximately $586 per student, according to those
surveyed.
- Surveyed parents plan to decrease their spending on
technology products by 11% year-over-year while
increasing spend on other categories like personal hygiene and
educational furniture by 22%. Spending on clothing and school
supplies remains unchanged.
- Shoppers surveyed prioritize retailers offering value
and convenience as mass merchants (77%) and online retailers
(65%) are top destinations. In search of deals, parents plan to
shop across 4.7 retail formats on average, up from 3.9 in
2023, and may sacrifice loyalty to stay within budget.
- Despite financial concerns, 85% of surveyed parents
would splurge on their child's must-have back-to-school
products, and 50% would shop for themselves.
- In addition to spending on back-to-school products, 86% of
surveyed parents enrolled their children in extracurricular
activities and plan to spend $582, including fees and equipment.
- While more parents say their children use
Generative Artificial Intelligence (GenAI) for their schoolwork
than last year (23% versus 15% in 2023), they are divided on its
benefits.
Why this matters
As families navigate the excitement
of the back-to-school season, they're balancing between fulfilling
what their children need and splurging on the novelties they want.
The cost of school supplies has increased 24.5% over the past four
years (per the Bureau of Labor Statistics' Consumer Price Index).
Deloitte's ConsumerSignals research finds that 73% of consumers are
concerned about rising prices for everyday purchases. According to
the "2024 Deloitte Back-to-School
Survey," K-12 parents spend cautiously, focusing on value and
convenience to find the best deals. As the season moves earlier
into July, families look for early savings to enable their spending
on indulgences and extracurricular activities, underscoring an
opportunity for retailers.
Financial concerns drive parents to prioritize
spending
Ongoing perceptions of inflation and a
cost-of-living squeeze is expected to keep spending steady from
last year. Based on surveyed parents' intentions, overall spending
is expected to reach $31.3 billion.
Parents surveyed expect to spend $586
per student in grades K-12, down just $11 year-over-year (up $57 compared to 2020).
- Clothing and school supplies are expected to account for most
of the back-to-school market spending, remaining flat at
$12.6 billion and $7.4 billion, respectively. Technology spending
is set to decline 11% this year, possibly because many parents who
invested in tech products during the pandemic for virtual or hybrid
learning may not be in the market for replacements or upgrades.
Meanwhile, other products (including personal hygiene items and
educational furniture) are up 22% year-over-year.
- Back-to-school spending strategies among surveyed parents
include cutting back on other expenses across all income levels
(64% of low-income earners, 57% of middle-income earners, and 39%
of high-income earners) or delaying major household purchases (52%
of low-income earners, 45% of middle-income earners, and 35% of
high-income earners).
- Eight in 10 surveyed parents plan to enroll their children in
extracurriculars, spending an average of $582 per child. Three-quarters (73%) consider
such an expense an investment in their child's future.
- Despite keeping an eye on their budget, 85% of parents surveyed
can be influenced by their children to splurge on must-have
products and brands. Moreover, half of parents (50%) plan to shop
for themselves during the season.
Key quote
"We expect back-to-school spending to be
flat to down modestly when adjusted for inflation, mainly driven by
middle-income families juggling financial priorities and ongoing
inflation perceptions. Retailers can expect headwinds to volume and
loyalty as consumers seek to save money. However, wanting to please
their kids, retailers will likely have opportunities to harness the
indulgences parents are willing to make."
— Stephen
Rogers, managing director, Deloitte Insights Consumer
Industry Center, Deloitte Services LP
Value moves to the head of the class
Families
surveyed prioritize value over brand and retailer loyalty to find
the best deals, visiting more retail formats and shopping earlier
in the summer as the back-to-school season continues to pull
forward.
- More surveyed parents plan to make the most of early discounts,
with 66% of spending expected to occur by the end of July, up from
59% in 2023. Moreover, 59% believe the best deals occur earlier in
the season, compared to 41% who think they appear later.
- On the hunt for deals, parents plan to shop across 4.7 retail
formats on average, up from 3.9 in 2023.
- While 62% of parents surveyed respondents plan to shop within a
fixed budget, they may sacrifice loyalty to do so: 67% will shift
brands if the preferred brand is too expensive, 62% will shop at a
more affordable retailer, and 50% will shop for private labels over
name brands, underscoring the need for retailers to offer
incentives to keep shoppers engaged.
- Back-to-school shoppers overwhelmingly cite mass merchants
(77%) as their most preferred retail format, followed by online
retailers (65%) and off-price retailers (tied with department
stores at 39%). Overall, 7 in 10 surveyed seek convenience
(convenient locations, delivery options, and easy returns) — making
it the number one driver for where they plan to spend the
most.
- Multi-channel retailers account for 80% of the total
back-to-school intended spend, up from 73% last year, and 70% of
families plan to shop in-store and online, up from 66%.
- Circularity comes to the forefront as more families plan to
purchase used items to maximize value further: 4 in 10 (across
income groups) surveyed expect to buy a used or refurbished item
this season, up five percentage points among both middle- and
high-income families. Technology and apparel lead the charge among
pre-owned products (both at 28%).
Social commerce patterns emerge
Technology
continues to help families further economize by providing
opportunities for product reviews and promotions.
- Social commerce is on the rise among K-12 parents, with 1 in 3
surveyed planning to use social media sites to assist in their
back-to-school shopping, up eight percentage points year-over-year.
In addition, 1 in 8 plan to make a purchase on social media, up six
percentage points from last year.
- GenAI is nascent for back-to-school shopping, with 18% of
parents planning to use the technology when purchasing.
- Nearly one-quarter of parents (23%) say their children use
GenAI for schoolwork, up from 15% in 2023. However, parents are
divided on its benefits: 35% agree that GenAI is a positive tool
for academic performance and overall learning experiences, compared
to 33% who disagree.
Key quote
"Families are searching for deals and
prioritizing value and convenience to save wherever possible. This
dynamic creates an opportunity for retailers to take some of the
anxiety out of the season by extending loyalty programs and
incentives. In addition, building a seamless omnichannel approach
could better position retailers to see consumers coming back
throughout the season."
— Brian
McCarthy, principal, Retail Strategy, Deloitte Consulting
LLP
Deloitte's back-to-school survey was conducted online using an
independent research panel between May 22
and May 30, 2024, and surveyed 1,198 parents with at least
one child attending school in grades K-12 this fall.
Connect with us on X at @DeloitteUS or on LinkedIn
@StephenRogers and @BrianCMcCarthy.
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