Back-to-School and College Spending Expected to Reach $82.8 Billion

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Total back-to-school spending for children in K-12 and college combined is projected to reach $82.8 billion this year, down from $83.6 billion in 2017, according to the National Retail Federation’s annual survey. It was conducted along with research partner Prosper Insights & Analytics.

The survey found that department stores were the top destination for K-12 stock-ups, while ecommerce sellers were favored by college shoppers.

“With the economy thriving thanks to tax reform and growing consumer confidence, we expect to see a very strong season,” said NRF President and CEO Matthew Shay. “College spending is expected to be at its highest level ever, and back-to-school will be one of the three highest years on record.”

Families with K-12 students plan to spend an average of $685 each compared to $688 in 2017, for a total of $27.5 billion, according to NRF. This is the third-highest total in the history of the survey following a peak of $30.3 billion in 2012 and last year’s $29.5 billion.

Parents and college students laying out cash themselves are projected to spend an average of $942 each, down from last year’s $970, for a total of $55.3 billion. This is a new high for the survey, up from last year’s previous record of $54.1 billion.

Not surprisingly, clothing is the largest category for back-to-school shoppers, pegged by NRF at an average of $237 per household, followed by electronics ($187), shoes ($139) and school supplies ($122.13).

“The biggest change we are seeing in back-to-school spending this year is coming from electronics,” said Mark Mathews, Vice President of Research for NRF. “Items like laptops, tablets and smartphones are now an everyday part of household life and aren’t necessarily a purchase parents save for the start of the school year, resulting in a slight decrease in spending for this category.”

College shoppers will spend the most on electronics ($229), followed by clothing and accessories ($153), dorm and apartment furnishings ($109.29), shoes ($83) and supplies ($69).

“College shoppers are prioritizing and increasing their spending budgets in essential categories including clothing, furnishings and shoes,” said Matthews. “However, categories such as personal care items, gift cards and food saw a dip this year.”

Department stores are the top destinations for K-12 back-to-school spending, cited by 57% of survey respondents in that group, followed by online retailers (55%), discount stores (52%) and apparel stores (51%).

Online (49%) edged out department stores (40%) for back-to-college spending, followed by discount stores (35%), office suppliers (31%) and college bookstores (30%).

“Consumer brands are clearly poised to win big, but only if they incorporate data from the frontlines in stores into their retail execution strategies,” said Gina Ashe, CEO of ThirdChannel. “Millennial and Gen Z shoppers in particular are not forgiving when brands and retailers don’t get the basics right.”

Ashe said during seasons like back-to-school its imperative to increase the number of highly-trained enthusiastic brand ambassadors on store floors.

“Beyond interfacing with customers, brand ambassadors can also act as brands’ in-store eyes and ears, providing real-time data feeds to headquarters about what’s happening with inventory, merchandising, customer reactions and sales results,” said Ashe. “Through image capture, brand representatives can provide data on what competitors are doing in stores, allowing a brand to react instantly and pivot strategies as necessary to optimize sales during a fast-paced, high-stakes period such as back-to-school.”

The survey found that more consumers are starting to shop early. Over three-quarters (77%) of consumers plan to start at least three weeks before school begins, up from 74% in 2017 and 64% a decade ago. Two-thirds of college shoppers will start that early, up from 51% in 2008.

Nearly nine out of 10 of all back-to-school shoppers still have half or more of their purchases left to complete, NRF found. More than half of them are waiting on the best deals.

“The trends we continue to see during back-to-school is the strong influence children have on their parents’ spending decisions,” said Phil Rist, Executive Vice President of Strategy for Prosper Insights & Analytics. “This shouldn’t come as a surprise when social media tools such as Pinterest and Instagram have allowed Gen Z to be more selective in the items they want. However, the payback for being picky is that parents now expect their kids to contribute to their back-to-school lists.”

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