Though many children and college-age students have already started school, there’s a few places around the country where the school bell has yet to ring. And, as we approach Labor Day, you can bet those teens and 20-somethings reveling in their last few days of freedom this summer are looking for the best way to make a splash with their wardrobes when they hit school hallways. This means mom and dad might still be on the hook for some last-minute shopping.
As we wrap up another back-to-school season, we wanted to look back and see what some of the big trends were, as well as take a look ahead. So, we asked Prosper Insights & Analytics Consumer Insights Director Pam Goodfellow to highlight key consumer trends, share her big takeaways from NRF’s latest back-to-school “update” survey and explain how the economy is impacting consumer spending right now.
Americans have pared back their spending this year after an historic 2012. What factors would you say drove consumers to spend less and shop smarter?
The aggressive spending plans we saw for back-to-school 2012 were a bit of an anomaly. A record number of children entered school last year, and for parents in general, they were really replenishing the items that they had to make last during the recession. Planned spending for the 2008-2011 back-to-school seasons were characterized by a “reuse and make do” mentality. To some degree, I think we’re seeing that again this year. The reduction in planned spending this year is a bit of a disappointment, but the silver lining is that they are still tracking ahead of those recession-riddled years. Consumers continue to be concerned with the economy, employment, gas prices, and their overall personal financial stability, so I think this year’s spending plans reflect this caution we’re seeing from consumers.
We can’t overlook the influence that mobile devices have on helping shoppers complete their purchasing. About 70 percent have smartphones this year, while nearly half own a tablet – both up substantially from last year. So we’re seeing an increase in the sheer volume of shoppers equipped with these smart shopping “tools.”
Further, research on mobile has played quite a role in school shopping as well. More than a third of shoppers with a smartphone and/or a tablet are using these devices to look up products and compare prices, and I expect this trend to continue into the upcoming holiday season.
Hard to believe, but it’s nearly the end of the back-to-school season. What are some of the big takeaways form NRF’s latest back-to-school “update” survey?
The superstar of the latest findings is most definitely the “back-to-school creep.” Consumers have responded to retailers’ extra-early promotions this year (with some ads even arriving prior to the Fourth of July). As of mid-August, shoppers had completed 52 percent of their purchases, a record high.
The newest findings also reveal that debit cards and cash increased in popularity as methods of payment used most often, while credits cards declined compared to a year ago. This again points to that cautious conservatism were seeing among consumers right now.
What are some of the larger trends you’re seeing concerning millennials and their shopping habits? Are there any consistencies you’ve noticed when it comes to where and how (online or in the store) this group chooses to shop?
As back-to-college shoppers, millennials may be procrastinators – or they might just be that group of shoppers waiting for those last-minute deals. The younger age groups are about 45 percent complete with their college shopping, compared to about 50 percent overall. Millennials are also being more conservative with how they spend their money. They are more likely to be relying on cash as the primary method of payment compared to the average shopper in this group – and less likely to charge purchases on a credit card.
Online channels will be key to reaching last-minute millennial college shoppers this year. Those in the 18-24 year old age group are 30 percent more likely to head online for their final purchases this year versus back-to-college shoppers overall. With 46 percent of these young shoppers planning to do their remaining shopping over the Internet, this channel is just as important to this group as discounters (45 percent) or department stores (44 percent).
When talking about the impact the economy is having on consumers’ spending plans, what do you expect to see as we move into fall? Do you think shoppers will flock toward sales and refrain from spending if more full-price merchandise is on the shelves?
If the recession taught consumers one thing, it was how to save a buck. Mobile devices are increasingly aiding shopping because of their ability to price compare and hunt down coupons and promotional codes. Discounting has become something of a vicious cycle for retailers, but not paying full price has become a regular part of consumers’ shopping habits.
Given consumers’ continued concerned with their macro and micro environment, I think we’ll see shoppers this fall – and into the holiday season – continue to keep an eye out for promotions and make thoughtful, targeted purchases that keep them in line with their budgets.