College students boost back-to-school spending to $83.6B
Back-to-school spending this year will be buoyed by college students and will help bring the season to its second-highest spending level on record, according to the National Retail Federation’s annual survey conducted by Prosper Insights and Analytics and released on Thursday.
Total spending for school and college combined is expected to rise more than 10% to reach $83.6 billion, from last year’s $75.8 billion, according to the report. Without the college-related spending, families plan to spend an average $687.72 each, for a total of $29.5 billion. That's an 8% increase from last year’s $27.3 billion, the second-highest in the history of the survey following a peak of $30.3 billion in 2012.
The season is starting early this year, with 27% starting two months before the beginning of school, up from 22% last year, the study found. A few (21%) will wait until the last week or two before school starts, about the same as last year’s 22%. Most early birds (60%) say they are trying to spread out their budgets, 48% don’t want to miss out on sales and 43% want to avoid crowds.
The NRF credits the strong level of consumer confidence for this year's healthy boost in back-to-school spending by families with children of all ages.
“Families are now in a state of mind where they feel a lot more confident about the economy,” NRF President and CEO Matthew Shay said in a statement. “With stronger employment levels and a continued increase in wages, consumers are spending more and we are optimistic that they will continue to do so throughout the rest of the year. As students head back to the classroom, retailers are prepared to meet their needs whether it’s for pencils and paper, shirts and pants or laptops and tablets.”
Overall spending spans several categories led by apparel and electronics while spending on shoes and school supplies will have the highest expected increase, the research showed. Almost all (95%) back-to-school shoppers plan to spend on clothing for an aggregate total of $10.2 billion, 93% will shop for shoes to the tune of $5.6 billion, and a majority (60%) will pony up for electronics like computers or calculators for a total of $8.8 billion. Most (97%) will also buy school supplies such as notebooks, folders, pencils, backpacks and lunchboxes, adding up to $4.9 billion. Parents say they will spend an average of $238.89 on clothing, $204.33 on electronics, $130.38 on shoes and $114.12 on school supplies, according to the study.
For the first time, the NRF asked shoppers which electronics they plan to buy: 45% said they'll get a laptop, more than a third (35%) plan to purchase a tablet or a calculator (35%), and a quarter plan to purchase accessories like a mouse, flash drive or charger. The increased emphasis on technology at school is leading parents, especially millennials, to plunk down more on electronics. And they're in search of deals on those products during the season, according to Prosper Principal Analyst Pam Goodfellow.
In addition to schools, kids are guiding their parents' choices to a great extent, the study found. Most (65%) families say that half or more of their purchases are a result of their children’s influence, up from 57% last year. But the kids are more willing to pitch in on purchases: Teenagers will contribute $37.64 to the average back-to-school bill, up from last year’s $32.90, and pre-teens will contribute $27.09, an increase from $20.08 last year.
Unlike research from Deloitte released earlier this week that found back-to-school shoppers drifting away from department stores and specialty retailers to mass merchants and off-price retailers, NRF and Prosper say that 57% will shop at department stores, 54% at discount stores, 46% each at clothing stores and online, and 36% at office supply stores. Like Deloitte, though, NRF says online shoppers are very interested in free shipping (91%) and 54% in picking up online orders at physical stores.
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