Even though the end of summer comes at the same time each year, the idea of back to school often catches consumers off guard. Some of us find ourselves asking: How did we get here so quickly? No matter the answer to this question, the excitement of back to school is upon us.
So, how can retailers and marketers put themselves in the best position to succeed? As the old saying goes, knowledge is power. Deloitte Consulting’s “2024 Back-to-School Retail Survey” breaks down consumers’ spending intent amid financial pressures, the effect of social media on spending plans and how leveraging generative AI can help attract tech-savvy shoppers.
SmartBrief spoke with Brian McCarthy, principal, Retail Strategy at Deloitte Consulting, about the survey and how retailers and marketers should prepare for back-to-school.
SmartBrief: What are the most interesting (or surprising) findings from this year’s 2024 Back-to-School Retail Survey?
McCarthy: Parents are juggling a cost-of-living squeeze. They are economizing back-to-school in order to put their incremental dollars toward other priorities like padding their savings, travel, and extracurricular activities for their children. As a result, we expect that spending will be relatively flat at $586 per child, on average, or down 8% if you factor in inflation, as the middle and low income pulls back 9% and 5% respectively.
In addition, retail and brand loyalty are at risk as parents place a priority on value and convenience in order to balance their budgets. Two-thirds of parents will shift brands if their preferred brand is too expensive, and half will shop for private labels over name brands.
However, parents are willing to splurge for the right reasons. Among surveyed parents, 85% said their child could influence them to splurge on a must-have item or brand, and half would buy something for themselves.
SmartBrief: With 67% of parents willing to switch brands for better prices and 62% opting for more affordable retailers, what strategies can businesses implement to enhance brand loyalty and offer compelling incentives to keep budget-conscious shoppers engaged?
McCarthy: Retailers should look to shore up loyalty programs and create consistent experiences in-store and online as building the trust around value and convenience now during the back-to-school season could pay off for holiday.
Our survey found that 3 in 4 customers are more loyal to retailers that provide uniform experiences, underscoring how a consistent omnichannel presence can further build loyalty. This is even more important as loyal back-to-school shoppers spend 35% more on average.
Retailers can also answer the demand for sustainable products as four in 10 parents (across income groups) expected to purchase a used or refurbished item this season, up 5 percentage points among both middle- and high-income families. Retailers that can expand circular assortments and messages around the benefits of buying through a trusted source may be able to hedge against the growing popularity of peer-to-peer marketplaces.
SmartBrief: Considering that 85% of parents are willing to splurge on must-have products for their children and 86% plan additional spending on extracurriculars, what opportunities exist for brands to create targeted promotions or bundles that appeal to these emotional and practical spending motivations
McCarthy: Back-to-school is an exciting time, and parents want to set their children up for success. While focusing on the necessities, parents say they can be influenced by their children to splurge on particular brands or products or to spend more in general. Retailers should consider engaging children in the shopping journey. By creating a fun and memorable shopping experience for children, retailers could increase their appeal to parents and encourage impulse purchases.
SmartBrief: What opportunities exist for retailers to integrate generative AI into their marketing efforts and enhance the shopping experience for both parents and students?
McCarthy: Parents are just beginning to leverage GenAI when it comes to back-to-school shopping. 18% of survey respondents said they plan to use GenAI for their shopping, most notably for product reviews (76%), to economize (62%), and to save time (35%).
Retailers who are able to leverage GenAI to reach shoppers with product information and deals can meet parents at this nascent stage and build loyalty as GenAI becomes more popular.
SmartBrief: How can brands enhance their social commerce strategies to better capture and engage this growing segment of shoppers?
McCarthy: Parents are using all the tools they have in their arsenal this back-to-school shopping season, and that includes social media. 1 in 3 shoppers are using social media with 1 in 8 planning on making a purchase using social.
They are using social tools for inspiration (78%) and to find deals (62%). Retailers and brands who provide a positive social media experience and offer incentives can capitalize on further success throughout the back-to-school season.
However, brands should continue to prioritize preferred shopping channels. Despite only 12.5% of shoppers planning to purchase via social media, a significant 77% intend to spend at mass merchants, and 65% plan to shop at online retailers. This indicates that while social media is influential, traditional and online retail channels remain dominant.