This year, parents’ back-to-college spending is expected to reach $25.5 billion, or $1,330 per household, essentially flat with 2017.
That’s according to Deloitte’s “2018 Back-to-College Survey” of parents. The survey, taken between May 1 and June 13, polled a sample of 1,025 parents with college-going children.
The survey’s results showed that mobile and online shopping are hitting a plateau among parents. Only 69 percent of parents surveyed plan to use a desktop or laptop this season, down from 80 percent of total shoppers in 2017. While approximately the same amount as last year — 45 percent — plan to use mobile devices, fewer parents — 13 percent — intend to use social media (18 percent). Of those who are planning to use these digital platforms, they will use them for looking up pricing information and discounts.
Parents aim to spend $1,330 versus $1,347 a year ago. The average spend for clothing and accessories is expected to be $279, down 4 percent from a year ago, according to the survey.
Of the $25.5 billion market, $8.2 billion is expected to be allocated to college supplies; $4.4 billion to computers and hardware; $4.2 billion to clothing and accessories; $3.5 billion to dorm/apartment furniture and supplies; $3 billion to household appliances and supplies, and $2.2 billion to electronic gadgets and digital subscriptions, according to the survey.
In-store sales are expected to generate more than half (54 percent) of back-to-college revenue with online to account for nearly one-quarter (24 percent) of sales, according to the survey. This means that 22 percent of spend share has yet to be designated to online or in-store, leaving $5.6 billion up for grabs for retailers.
“This decline in digital usage for back-to-college shoppers could be a sign that consumers desire innovation with their digital shopping interactions,” said Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution leader. “It provides an opportunity for retailers to define innovation at the intersection of technology, engagement and decision making in the coming years.”
He said that the preference for in-store shopping among college parents is consistent across both the back-to-school and back-to-college seasons. “Where shoppers were once undecided, they’ve now selected to shop in-store instead of online when faced with the choice,” he said. He noted that particularly for low-income household respondents, 31 percent of back-to-college spend is undecided between in-store and online as these shoppers are more apt to search for deals and extend their shopping season.
In fact, shoppers’ income levels tend to influence the purchasing and decision making. Low-income households are more likely to focus more of the deals, as three in four parents surveyed (75 percent) plan to shop at different points throughout the summer to take advantage of deals compared to high-income household shoppers (63 percent).
Income levels also came into play when parents were asked where they will shop and what they will buy. For example, mass merchant retailers are the top shopping destinations among all income levels, drawing in 75 percent of shoppers. Low-income shoppers prefer dollar stores (32 percent) and off-campus bookstores (27 percent), while high-income households prefer traditional department stores (27 percent) and warehouse membership clubs (26 percent).
More than four in five parents (82 percent) surveyed plan to collaborate with their college student for budgeting and shopping. This provides an opportunity for retailers to tailor promotional messages to both groups. Yet, household income levels are a driving factor in determining whether it is the college student or the parent who opens the wallet at the register. According to parents surveyed, high-income households expect their students to be twice as likely to use the family credit card (42 percent) as low-income households (19 percent). Thirty-nine percent of low-income households expect students to fund their own purchases compared to 37 percent of middle-income and 30 percent of high-income households.
Retailers can expect the back-to-college busy season to peak between the last two weeks of July and the first two weeks of August, as 80 percent of all back-to-college shoppers expect to be active shoppers during this period, spending $14 billion (50 percent of total spend), according to both the survey and the Census Bureau’s current population survey.
All product categories are likely to experience peak sales in early August, except for computers and hardware, which will peak in late July. In addition, all shopping destinations should expect peak back-to-college shopping in early August, except for home electronics stores, home furnishings stores and warehouse clubs.
Some categories may experience sizable growth, including dorm/apartment furniture, up 17 percent; and electronic gadgets, up 14 percent.
Lokesh Ohri, principal, Deloitte Consulting LLP and leader of consumer engagement, content and commerce offerings in the retail practice, said, “According to parents surveyed, 68 percent plan to start their back-to-college shopping before August. Even more pertinent to retailers, these early shoppers also plan to spend 35 percent more than shoppers who wait until August.”
Last week, Deloitte released another survey which said that household spending on clothing, supplies, computers and electronics for children in grades K-12 was expected to reach nearly $28 billion this year. Parents surveyed said they would spend an average of $510 between July and September, with most of that occurring in stores ($292), more than double the amount they plan to spend online ($115).
As reported, the National Retail Federation projects total spending on clothes, shoes, supplies and electronics such as calculators and computers for those attending grades kindergarten through college and graduate school will reach $82.8 billion. That’s nearly as high as last year’s $83.6 billion.