Retailers Revise Their Homework on Back-to-School

Weather, Hesitation Delay Shopping Plans

Consumer Facts from Cotton Incorporated Lifestyle Monitor™

Despite an early push at retail, it seems the back-to-school shopping season is slow to gain steam, forcing many retailers to revamp their strategies to adapt. Teen Vogue’s Back-to-School Saturday initiative on August 11 may have wooed some consumers with its discounts and retailer participation, but many trend-conscious teens have been anxious to wait until school actually starts before they commit to making purchases. As a result, some retailers like JC Penney have extended their promotions, scheduling merchandise to arrive at the end of September in hopes that more fall-like weather will entice consumers to buy.

The Robin Report - Back to School

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According to the National Retail Federation’s 2012 Back-to-School spending survey, conducted by BIGinsight, the average personwith children in grades K-12 will spend $688.62 on their children, up slightly from $603.63 last year. Total spending is expected to reach $30.3 billion, a 14% increase – the highest since 2003.

Back-to-school is the second largest selling season, trailing only the December holidays, but apparel spending may easily remain flat compared to last year. Apparel tops the list of consumers who have a need to go back-to-school shopping: 9 out of 10 plan to buy clothes, followed by supplies (84%) and shoes (78%), according to the Cotton Incorporated Lifestyle Monitor™ survey.

Rising prices of non-back-to-school items are also top-of-mind and will likely have an impact on consumer budgets for back-to-school spending. Specifically, of those consumers planning to do back-to-school shopping, nearly three-fourths (73%) are concerned about rising gasoline and food prices limiting their shopping budgets for the 2012-2013 school year, down only slightly from 78% last year, according to Monitor data.

“Concern about rising prices means many consumers may wait to see if prices will drop before they buy,” says Kim Kitchings, Vice President, Corporate Strategy and Program Metrics, Cotton Incorporated. “But incentivized discounts might further encourage consumers to plan ahead in order to reap the savings.”

The Robin Report - Back to School

Click to see Chart Full-Sized

The NRF agrees that promotions are expected to play a significant role this year, not least because of Teen Vogue’s promotion. Cost-conscious consumers are on the lookout for deals and discounts this season, eager to keep a tight rein on household spending.

“Families aren’t opposed to spending on what they need, but parents want their children to take a good look around at what they already have before deciding what to buy for back to school this year,” said NRF President and CEO Matthew Shay in a press release. “Retailers understand consumers are extremely focused on value and are taking this opportunity to offer substantial savings on merchandise.”

Promotions are one way to boost spending, especially given that apparel B-T-S spending is expected to remain flat this year, with consumers planning to spend about $227 on apparel per person.

“Essentially, retailers are competing for the same share of consumers’ wallets that they were last year, so they have to make it count,” Kitchings says.

There is a small bright spot, though, in the impulse category; among those planning to purchase clothing for their children this back-to-school season, 63% say they purchase clothing for themselves at least some of the time, according to Monitor data.

Retailers may capitalize on this with window displays that appeal to parents as well as children; while most consumers (65%) cite what they already own and like as a source of clothing ideas, a full 43% say they are influenced by window displays, Monitor data reveal.

The Robin Report - Back to School

Click to see Chart Full-Sized

Whether through window displays or deep discounts, though, retailers will have to bring the “wow” factor in this extended B-T-S season to encourage beleaguered consumers to make those purchases for themselves or their children.

“For many Americans, the economic situation probably hasn’t changed much in the last year, and that has affected their outlook going into the back-to-school shopping period,” says Kitchings. “Weather is always a factor here as well. With the hot summer we’ve had, many parents are delaying purchases because it is simply too hot to think about fall clothes.”Indeed, just 37% of consumers say they are very or somewhat optimistic about the U.S. economy, while 48% report feeling similarly about their own financial situation.

This may result in parents’ purchasing only the essentials for their children, whether in apparel or school supplies. Indeed, Monitor data reveal that among those planning to shop for back to school apparel, top items are expected to be shirts/tops (91%), followed by jeans (75%), socks (70%), and pants (60%).

“Socks and t-shirts are inexpensive and easily replaced, so it’s no surprise they’re both high on the list for planned purchases this fall,” Kitchings says.

While B-T-S shopping remains one holdout where brick & mortar trumps online, 23% of consumers say they plan to shop online for B-T-S clothing this year, according to Monitor data, and that percentage may only continue to grow.

“Parents typically shied away from relying on the Internet for B-T-S shopping, preferring to take their children in-store to try clothes on,” Kitchings says. “But it’s become a great tool for parents, who can now compare prices at home before heading to the mall. And as increasing numbers of e-tailers offer discounts – whether in price or added value, like free shipping – that may encourage some to take their shopping lists online.”

For now, though, online shopping remains a secondary channel, as most parents pile in the car to head to brick and mortar stores for B-T-S shopping, enabling their children to try on clothing for size.

But only time will tell if Teen Vogue’s Back-to-School Saturday initiative has set the tone for this year’s holiday shopping season – and whether it becomes part of the retail lexicon next year.

Emily Thompson About Emily Thompson

Emily Thompson is the Associate Director, Editorial at Cotton Incorporated, the research and marketing company representing upland cotton. For more information on the Lifestyle Monitor™ Survey, please contact her at ethompson@cottoninc.com. The data found in this article, as well as additional relevant information, can be found at CottonLifestyleMonitor.com.