Small business takeaway:
- Back-to-school shopping is a proving ground for broader retail strategy ahead of the holidays. This year’s strongest signals: budget pressure is reshaping how consumers pay, making value, promotions, and flexible options like buy now, pay later more important conversion tools; local stores can win as shoppers spread purchases across more destinations; and AI-fueled search and social media are becoming stronger engines of consumer demand by deepening engagement and lifting spending.
Back-to-school shopping, which begins as early as June for some parents, and stretches into mid-September for others, is the second-biggest spending event of the year for U.S. retailers and related industries. It’s also a bellwether event that signals what businesses can do to prepare for the crucial holiday selling season.
The National Retail Federation (NRF), which surveys parents every year about their back-to-school spending plans, is forecasting record spending of $146.8 billion on back-to-school and back-to-college expenses from June through September.
That record spending is happening at a time when more parents than ever are saying they are concerned about the economy and concerned about their personal finances.
Deloitte’s annual back-to-school survey found that 57% of U.S. parents expect the economy to worsen over the next six months — the highest level reported since 2020.
But parents are also telling researchers that making their kids happy as they head back to school is a top priority, and that they’ll do everything they can to stretch their budgets in order to buy what their children need and want.
Those contrasting sentiments — high intent to spend coupled with high concern about costs and budget — have created consumer trends unique to this year’s back-to-school season.
Consumers started their shopping earlier than ever, but are also planning to finish later than ever
Yes, both of those statements are true this year, Deloitte retail strategy leader Brian McCarthy told CO—. This year, retailers launched back-to-school sales events during the last week in June — the earliest ever. Cost-conscious consumers took advantage of those sales, driving up early purchases of essential items like backpacks, lunchboxes, apparel, and school supplies, according to data from Adobe.
But the NRF report also found that consumers are delaying their final purchases until close to the start of school in hopes of getting better deals. Shoppers aren’t procrastinating, they’re being intentional, Allison Zeller, NRF Vice President, Consumer and Industry Insights, said. “They are trying to figure out how their shopping list fits within their budget.”
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Parents are using strategies to stretch their back-to-school budgets, such as buy-now-pay-later platforms
Parents surveyed for the National Retail Federation report are using multiple strategies to save money. They are doing more comparison shopping (46%), using coupons and waiting for sales (38%), buying fewer items (38%), and switching to cheaper brands (30%).
They also are trying to boost the amount of money they have available for back-to-school by cutting back on other spending (37%), using buy now, pay later plans (20%) and working overtime (17%).
The Deloitte survey found higher-income households are planning to reduce their spending an average of 20% this back-to-school season. Deloitte interprets that as a sign that higher-income parents are cutting back on items they might have splurged on last year — a third pair of sneakers, for example, or a fancier backpack.
How parents are purchasing is shifting: Less one-stop-shop stocking up and more buying at local stores
Consumers are traveling to more stores for back-to-school shopping and are seeking out a wider range of online retailers. “They’re no longer doing the one-stop shop to stock up,” the NRF’s Zeller said. Two significant shifts this year are that parents expect to spend less online this year, and that a record number of parents are planning to shop at local stores.
“Today’s retail industry has diverse options, and it gives shoppers the ability to shop around to find exactly what they need or want, whether its online, offline, on their mobile, or in their small town,” Zeller said. The increased ability to research deals and products means they are shopping more destinations, she said.
Parents are budgeting less for traditional tech expenses but a new kind of (AI) tech cost is emerging
Another shift the NRF is tracking is parents of K-12 kids are budgeting less for tech purchases. The NRF survey found a growing number of parents this year are saying the schools don’t require electronics purchases, and one in five families said the school supplies any required electronics.
“A growing share of families overall are stepping back from needing a purchase of technology” for their student, Zeller said.
Parents are beginning to take on a new kind of tech expense for their children: AI tutoring and AI camps, the Deloitte survey found.
Parents planned to spend 22% more on clothes this year and 16% less on tech. However, they’re beginning to take on a new kind of tech expense — AI tutoring and AI camps for their children. The Deloitte survey found that 13% of parents are planning to pay for some extracurricular AI education.
[Read more: Actionable AI Insights for SMBs From Top Execs at Wayfair, YouTube, Google, and LinkedIn]
Parents who use digital search tools, social media, and AI plan to spend more
The 29% of parents who use search, social media, and Generative AI to seek out products and deals are expected to have the highest average back-to-school spending, at $737, according to the Deloitte survey.
Those digital tools drive a deeper engagement with consumers, and “the more engaged the shopper is, the more likely it is they’re going to buy something from you, or buy something additional from you,” Deloitte’s McCarthy said. “The more digitally savvy a shopper is, the more likelihood there is that they’re going to spend more.”
At the same time, McCarthy said, retailers and brands can also be digitally savvy and use those tools to drive sales. “If [retailers and brands] find that really cool item and they promote it the right way and they position it in the store in the right place, and they market it on their digital channel the right way, they may get consumers to buy the thing they didn’t even know they wanted until they saw it.”
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