Back-to-school business in the USA looks upbeat
Deloitte the specialist consultancy firm has just released its latest report on the important Back-to-School business in the USA, usually a very rewarding situation for American retailers
Deloitte reports that its survey is revealing that American Consumers are giving the U.S. economy better grades this back-to-school season, but continue to hold tight to their purse strings and they will rely heavily on online and mobile channels while they shop. Nevertheless, shoppers are far more optimistic about the economy, nearly four in ten (37 %) are more confident in the economy’s prospects, compared with just one quarter (26 %) a year ago. Less than one third (31 %) believe the economy is in a recession, down from nearly half (48 %) in 2012.
Allison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader, names “steady improvements in housing and employment, the stock market and personal finances, adding to the consumers’ confidence”. He added: “however, after several back-to-school seasons of spending frugally and taking advantage of season long discounts, shoppers may need more encouragement and excitement to expand their child’s wardrobe or replenish additional items. Retailers will not only have to make offers very attractive this season, but they will have to score an “A+” on unique, exclusive merchandise and services that nobody else can offer”.
Households’ concerns about higher food and energy prices, and the job market continued to decline, however 54 % flagged concerns about higher medical costs, up 8 percentage points from 2012. Similarly, 53 % cited higher taxes as a concern that could affect their back-to-school spending.
In response to these concerns, consumers may stick to necessities. The number of parents with children in grades K-12 who said they would buy only what the family needs (57 %) increased five percentage points, and those who plan to reuse last year’s items jumped from 20 % in 2012 to 35 % in 2013.
Consumer spending more may be doing so out of necessity, rather than a desire to splurge this year. Among consumers who expect their spending to increase (34 %), the primary reasons are: prices are generally higher (57 %), children need more expensive items (42 %), and school budget cuts mean parents have to pay for more items (25 %). More than two thirds (68 %) of parents of children in grades K-12 even stated they would forego purchases for themselves to pay for back-to-school.
More than ever, shoppers surveyed are going online and turning to their smart phones to make the most of their back-to-school budgets. Parents and students alike will largely head online, seeking a combination of the best deals, selection and convenience. Nearly three quarters (75 %) of parents indicate they will buy more online this year to find the best product or price, and more than half (52 %) prefer to buy from retailers offering online shopping with in-store pick up.
Nearly twice as many (42 %) of households (1074) responding to the survey plan to sue social media during the shipping process, compared to parents of children in grades K-12 (21 %).They will primarily seek out reviews/recommendations (76 %), promotions (67 %) and browse products (61 %).
There is also a Back-to -College survey polled with a sample of 450 parents of college children. These details shows Table 1