NRF Chief Economist Jack Kleinhenz and Vice President of Industry and Consumer Insights Katherine Cullen hosted a recent webinar to discuss this year’s back-to-class shopping trends and key insights on the economy. Read more about this season’s findings below.
While concern and uncertainty about the economy are top of mind for consumers, the economic outlook fits what is to be expected by findings in NRF’s Monthly Economic Reviews. Kleinhenz said the expectation for retail sales this year remains 2.5% to 3.5%, with inflation easing throughout the year.
“Consumers are not feeling as financially healthy as maybe a year ago,” he said, “but their financial situation actually remains pretty solid.”
According to Federal Reserve Data, the economy is growing at a slower but steady pace than seen in previous years, with disposable personal income up 3.7% and personal consumption up 5.1% compared to last year.
The use of credit cards has risen — and while that can mean consumers are doing well, “credit is a two-sided coin,” Kleinhenz said. Some households must rely on credit to purchase everyday goods, and delinquency in relation to auto loans and credit cards is increasing, though it remains concentrated on the lower end of the income spectrum.
Back-to-school spending is expected to reach $39 billion this year and back-to-college is expected to hit $87 billion. On average, families are expecting to spend $875 per child in grades K-12 and $1,365 on a college student.
“Back-to-school and back-to-college is more of an essential spending time period for many families,” Cullen said.
These non-discretionary purchases are leading consumers to “make every dollar count,” she said. Shoppers are more likely to look for sales and engage in comparative shopping online. Deal shopping is reflected in location as well with more back-to-school shoppers preferring to purchase items online, at department stores and discount stores compared with previous years.
Electronics remain the biggest area of spending, but many consumers plan to reuse devices or pass them down to a younger child. Sustainability is an area of consumer focus this season —71% of back-to-school and 67% of back-to-college students say it’s important to purchase sustainable or environmentally friendly products for back-to-school or college. Both age groups would consider purchasing items secondhand including textbooks, clothing and school supplies.
This year’s data also shows that consumers are getting an early start on back-to-class shopping, with more than half of consumers starting in early July. Many people cite wanting to spread out their shopping budgets through multiple paychecks as a reason for early-bird shopping. Other consumers note not wanting to miss out on deals during the summer months.
With retailers making the most of early shopping behavior and trends, July has become a month consumers wait for when looking to shop deals. That said, back-to-class shopping is set to continue through the summer months; 49% of back-to-school shoppers start three weeks to a month before the first day of class, while 23% start one to two weeks before school starts and 5% shop the week classes start — or later.
For more insights into NRF’s back-to-class trends and a recording of the webinar, visit the Back-to-Class landing page or view the webinar slides here.