Although consumer confidence in the economy has increased, the back-to-school shopping season will see shoppers hold tight to their purse strings, according to the annual Deloitte "Back-to-School" study released today.
Shoppers are far more optimistic about the economy now than at this time last year, the survey found. Nearly four in 10 (37 percent) are more confident in the economy's prospects, compared with just one-quarter (26 percent) a year ago. Less than one-third (31 percent) believe the economy is in a recession, down from nearly half (48 percent) in 2012.
Households' concerns about higher food and energy prices and the job market continued to decline, however 54 percent of respondents flagged concerns about higher medical costs, up 8 percentage points from 2012. Similarly, 53 percent cited higher taxes as a concern that could affect their back-to-school spending.
In response to these concerns, consumers may stick to necessities. The number of parents with children in grades K–12 who said they would buy only what the family needs (57 percent) increased 5 percentage points, and those who plan to reuse last year's items jumped from 20 percent in 2012 to 35 percent in 2013.
Consumers spending more may be doing so out of necessity rather than a desire to splurge this year, according to the survey findings. Among consumers who expect their spending to increase (34 percent), the primary reasons are: Prices are generally higher (57 percent); Children need more expensive items (42 percent); and School budget cuts mean parents have to pay for more items (25 percent). More than two-thirds (68 percent) of parents of children in grades K-12 even said they would forego purchases for themselves to pay for back-to-school.
"Steady improvements in housing and employment, the stock market and personal finances give consumers reason to feel like they are back on solid ground," said Alison Paul, vice chairman at Deloitte LLP and retail and distribution sector leader. "However, after several back-to-school seasons of spending frugally and taking advantage of season-long discounts, shoppers may need more encouragement and excitement to expand their child's wardrobe or replenish additional items."
More than ever, shoppers surveyed are going online and turning to their smartphones to make the most of their back-to-school budgets, according to the survey.
Among top shopping destinations, 36 percent of consumers plan to shop online this year, making the Internet the No.3 destination — behind discount and office supply/technology stores — a significant jump from the No. 8 position last year.
The Internet also shot up on consumers' list of sources for information about back-to-school items, trumping all other sources and knocking television out of the No.1 spot. More than half (55 percent) of parents expect to head online, up 22 percentage points from last year, far outpacing the other top influencers including family (42 percent), friends (41 percent) and television (38 percent).
Smartphones' influence on back-to-school shopping also shot up dramatically in this year's survey. Nearly eight in 10 (78 percent) of smartphone owners plan to use their smartphones to assist with their back-to-school shopping, up from 65 percent last year.
"Online and mobile channels are the season-winning plays for retailers this year," Paul said. "If retailers get in front of the consumer who is checking prices, product details or product reviews, they become part of the experience rather than disappearing into the clutter of back-to-school advertising. We expect to see strategic retailers do more than offer promotions through digital channels, taking the extra step to tie their efforts to popular school activities or social issues, or serve as a shopping companion or stylist."
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