Consumer Behavior
Consumer demand, tech needs driving big back-to-school spend
As schools re-open consumers are swarming retail stores and e-commerce sites, with big spend projections for the sales season. Retailers with a strong omnichannel strategy will benefit the most. That's just one insight from the 2021 Deloitte Back to School survey.
August 18, 2021 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
As classrooms re-open, and consumers scramble for everything from school supplies to clothing and college dorm necessities, the retail market is one of robust sales. In fact back-to-school spending will reach its highest levels in recent years, according to the 2021 Deloite Back to School Survey.
There will also be increased spending on technology for both K-12 and college students, and that trend reflects a shifting focus on how students learn given the COVID-19 pandemic.
The survey data indicates a new era of schooling and an era of retail in which consumers are now expecting certain conveniences and competitive prices, according to Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution leader.
Retail Customer Experience reached out to Sides for further insight on the survey's findings and what the report data means for the retail industry ahead.
Q. What is driving the big spend in back-to-school and is it a result of a year of homeschooling due to COVID-19 or pent up consumer retail therapy?
A. As clarity and confidence about the upcoming school year continues to rise, back-to-school spending will be at its highest level in recent years, reaching a collective $32.5 billion for K-12 students, or approximately $612 per student. We believe that this spend increase is largely coming as a result of pent up consumer demand and also from a surge in tech purchases — consumers say they plan to spend 37% more in that category versus last year. As the pandemic propelled the education system into the digital age, focus on traditional supplies has decreased, with spend relatively flat YoY.
Q. Is there any difference in consumer behavior when it comes to clothing versus supplies?
A. We don't have that granularity for categories; having said that, our research does show that customers have made it clear that they are sticking with channel preferences that were established during the pandemic.
Q. Is the back-to-school shopping increase in sales due to the decades of tradition of back-to-school activity by consumers trying to regain normalcy?
A. The last school year was riddled with uncertainty and anxiety. But as vaccine rollouts continue and COVID-19 cases diminish overall, parents and students are hopeful for a return to normalcy this fall. The overall outlook heading into the fall is bright, with 55% of K-12 parents and 46% of college parents more confident about the economy's prospects (up from 17% and 14% respectively, in 2020), and household financial situations holding steady with 78% of K-12 parents and 75% of college parents in similar or better shape than last year. As a result, parents are ready to spend more to ensure their children have what they need to be successful. Parents of college-age children are planning to spend more as well, with spending poised to reach record levels particularly among middle-income families and surpassing pre-pandemic levels.
Q. What is driving the increased technology spend and wearable technology? Is it the increased dependence gained during COVID-19 or emerging innovative technology itself?
A. We've entered a new era of schooling where demand for traditional back-to-school supplies is declining in favor of tech. The digital acceleration that occurred in the past year has created a new baseline for tech integration in the education system, altering not only the types of products needed for both virtual and in-person learners, but also how parents shop for them.
As parents adjust to the realities of a more digitally oriented education system, spending on technology products (personal computers, smartphones, tablets, wearables, etc.) is set to increase 37% over 2020 to $11.8 billion. Children will be using more digital technology in and out of the classroom, with 58% spending the same or more on online learning resources such as e-learning platform subscriptions, online courses, educational tool licenses and online tutors to supplement classroom learning. We can expect a 34% YoY gain in the purchase of cell phones/smartphones, but wearable technology will see the biggest gain with a 129% YoY increase in spending.
Q. What will set retailers apart this back-to-school season? Will it be a strong seamless omnichannel that meets consumer expectations or the ability to deliver fast and efficient?
A. Retailers that have strong omnichannel strategies will appeal to shoppers and be better positioned to capitalize on improving consumer sentiment. For example, in both the back-to-school and back-to-college findings online and in-store shopping preferences converged during the pandemic. Despite people feeling safer going into stores now, those channel preference trends have reached an equilibrium and are sticking. In addition, consumers will be looking for the omnichannel conveniences they adopted during the pandemic; 34% plan to use BOPIS or curbside pickup more frequently for back-to-school shopping.
At the same time, technology has become an integral part of the shopping journey. 44% of consumers plan to leverage tech-enabled shopping tools offered by retailers for their back-to-school purchases. Shopping using a voice assistant is the most preferred offering (20%) followed by digital wallets (17%); and "buy" buttons on social media, virtual reality and chatbots (each at 15%).
About Judy Mottl
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